Madoff scandal ripples among Palm Beach County foundations

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Madoff scandal ripples among Palm Beach County foundations

By CHRISTINE STAPLETON

Palm Beach Post Staff Writer

Sunday, February 08, 2009

Having trouble mustering pity for the rich who invested with Bernard Madoff?

Then pity the hungry, homeless, neglected kids, abused women, homebound elderly, the museums, musicians, actors, artists and disabled. Those with arthritis, birth defects, Alzheimer's, HIV/AIDS, cancer, autism, diabetes, mental illness, muscular dystrophy, cystic fibrosis, Tourette's syndrome, unplanned pregnancies, kidney, liver and heart disease. Public radio. Scholarships. Hospice. The planet.


All will be affected, as foundations left penniless quietly shut down and the wounded others halt or cut their giving.

"I think initial reaction has been schadenfreude - a German word for gloating at someone else's bad luck," accountant Richard Rampell said. "The more the connection is made between these charities and the ultimate recipients, there will be less schadenfreude."

In Palm Beach County, by far the largest foundation to fail was the Picower Foundation with nearly $1 billion in assets, almost all invested with Madoff. It announced in December that it would close its doors.

At the end of January, the Carl and Ruth Shapiro Foundation - which lost $145 million, about half its assets - announced it would not give any more money this year, except to fulfill prior commitments.

Last week lawyers released the names of 13,500 accounts with Madoff's firms.

Among them, an additional 22 Palm Beach County-based foundations with more than $621 million in combined assets invested with Madoff, according to a New York Times-sponsored analysis. The data were gleaned from public tax returns, most from 2007.

Although some of the foundations may have cashed out since then, the data provide a rough estimate of losses.


The Levin Family Foundation, with $6 million in assets, headed by Martin Levin, was wiped out.


The Werner Foundation, with $1.4 million in assets, headed by Violet Werner, was devastated.


The J. Gurwin and Gurwin Family foundations lost all their assets - $36 million.

Joseph Gurwin, 88, last week vowed to keep giving even if he has to "sell apples on the corner."

"I will have to replenish them," said Gurwin, who built a fortune manufacturing military products such as bulletproof vests and parachute drop equipment for the government. "I believe we were put on this earth not just to take but to give."

Prominent Palm Beacher Sydelle Meyer said the coffers of her foundations are empty. In the past five years Meyer and her late husband, Arthur, have given more than $1 million to the Norton Museum of Art and the Jewish Federation of Palm Beach County.

"I just feel like my arm was cut off," Meyer said. "It is so very unfortunate for the people who need it the most."

Possible losses to the Miles and Shirley Fiterman Foundation - about $60 million - would virtually wipe out the foundation's assets.

While much of money donated by these local foundations remains in Palm Beach County, other causes span the globe and spectrum of interests.

Local charities are holding their breath. Most have not yet felt the fallout from the Madoff scandal. But they are bracing for the worst as the economy worsens and accountants finish tallying foundation losses.

The Jewish Federation of Palm Beach County, a recipient of major foundation contributions, won't know where it stands until its annual fund-raising cycle ends in April, spokesman Bill Orlove said.

Nearly all of the Palm Beach foundations hit in the Madoff scandals were established by Jewish philanthropists. In Judaism the act of charity is much more than a tax-efficient way to give money. It is a religious obligation and it is essential to living a spiritual life. Jewish legal and ethical writings provide guidelines, and everyone is obligated to give, regardless of financial standing.

"It is a very important part of Jewish culture," Rampell said. "It's like a duty, like a tax almost."

Losing the ability to perform charity is not only an economic nightmare but also a spiritual tragedy.

"What bothers me is that this money was set aside for those who should be getting it," Gurwin said. "That opportunity has been stolen from me."