Madoff ‘Klole’ Dwarfs Palestinians’ Rockets for American Jews

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Madoff ‘Klole’ Dwarfs Palestinians’ Rockets for American Jews


By Peter S. Green and Janet Frankston Lorin

Jan. 15 (Bloomberg) -- Michael Steinhardt, the philanthropist who helped start Birthright Israel, says the leading topic of talk among New York Jews isn’t the invasion of Gaza. It is Bernard Madoff’s suspected $50 billion fraud.

“It dwarfs the war,” said Steinhardt, who is set to join a panel of Jewish intellectuals and investors today, near Union Square in Manhattan, to dissect the swindle. Steinhardt reported losing $2 million tied to Madoff. Some $110 million vanished from the ledger at Yeshiva University, while Nobel Peace Prize winner Elie Wiesel’s foundation invested $15.2 million it might not recover.

The Madoff affair has triggered an outpouring of Jewish anguish, frustration, embarrassment, outrage and trepidation, said Rabbi Eric Yoffie, the president of the Union for Reform Judaism, a New York-based group that supports congregations. Today’s roundtable may provide relief and change people’s behavior, said Rabbi David Ellenson.

“I would hope that it wouldn’t just be a kvetch-fest,” said Ellenson, the president of Hebrew Union College-Jewish Institute of Religion, the oldest institution of Jewish higher education in the U.S. “The real point is not to ask people just to engage in this catharsis, but the real test of the moral significance of an event like this is: How will we behave in similar situations in the future?”

The panel is scheduled to meet before an audience that may exceed 300 at the Yivo Institute for Jewish Research, beginning at 7 p.m. New York time. Tickets to the event cost $30 each and are sold out. The focus is on Madoff.

“This matter has paralyzed the Jews in some ways, and Jews are also a psychological people,” said the roundtable organizer, Martin Peretz, editor-in-chief of the New Republic magazine and co-founder of TheStreet.com. ‘Maybe if we talk about it together we’ll get some clarity. Pain needs talk.”

Schama, Walzer

Steinhardt is a former hedge-fund manager. The Birthright program he helped start sends young American Jews on 10-day visits to Israel.

He is to be joined on the panel by Columbia University historian Simon Schama; Michael Walzer, a professor emeritus in social science at the Institute for Advanced Study in Princeton, New Jersey; William Ackman, co-founder of Pershing Square Capital Management LP; and Mortimer Zuckerman, the chairman of Boston Properties Inc. and editor-in-chief of U.S. News & World Report magazine.

Jews feel betrayed by Madoff, said Yoffie, of the Union for Reform Judaism, which claims to represent 1.5 million Reform Jews in the U.S.

“He preyed upon the familial connections that Jews have for each other and seemed to focus in particular on charitable foundations, including those where he had assumed personal positions of leadership,” Yoffie said in an e-mail.

Madoff has declined to be interviewed since his arrest on Dec. 11.

Yeshiva Trustee

Madoff served as a trustee of Yeshiva University in New York, whose operations include the Albert Einstein College of Medicine and Benjamin N. Cardozo School of Law. Yeshiva, in a statement last month, said it invested $14.5 million in a fund run by fellow trustee J. Ezra Merkin, who fed money to Madoff.

The investment, once valued as high as $110 million because of profits later deemed “fictitious,” was lost, according to the school. Merkin and Madoff resigned from the board.

Hadassah, the Women’s Zionist Organization of America, invested about $90 million with Madoff, the organization said in a statement last month.

“No anti-Semite ever did this much damage to the American Jewish community,” said Jonathan Sarna, a professor of American Jewish history at Brandeis University in Waltham, Massachusetts, in an interview.

“My mother would have called this a ‘klole,’ which means a curse, that Madoff is a curse on the Jews,” said Peretz, the roundtable organizer and a director at Yivo.

In Ponzi schemes, some investors are paid with others’ money to give the appearance of profits. While Madoff is both Jewish and accused of running such a fraud, the schemes aren’t uniquely Jewish, Ellenson said in an interview. The focus on Madoff’s religion nettles Adrienne Asch, director of the Center for Ethics at Yeshiva University.

‘Very Offensive’

“I find the question, ‘How does this affect the Jews?’ a very offensive question,” Asch said in an interview. In explanation, she turned to Shakespeare’s “The Merchant of Venice” and its Jewish lender who demanded a pound of flesh from a borrower.

“Shylock’s speech is right: ‘If you prick us, do we not bleed?’” Asch said. “People are people and there are evil ones and good ones in every group.”

Jews have been taught for centuries that stealing money is no trivial matter, said Richard Kalmin, a professor of rabbinic literature at the Jewish Theological Seminary, an affiliate of Columbia. In an interview, he noted a passage from the Talmud, the collected writings on Jewish law:

“He who steals from his fellow even the smallest coin, it is as if he takes from him his life.”

Accused of taking far more than the smallest coin, Madoff aroused more than the smallest anger, said Howard Sirota, a New York securities lawyer who had clashed with Madoff.

Holocaust Allusion

In 1994, Sirota defended a broker-dealer in a National Association of Securities Dealers disciplinary proceeding led by Madoff, who interrupted him repeatedly, according to the lawyer. When Sirota alluded to the Holocaust to make a point, saying his client shouldn’t “be marched naked in the snow to the ovens,” Madoff accused Sirota of making light of Hitler’s genocide, the lawyer said.

“This sanctimonious hypocrite who lectured me about trivializing the Holocaust cheated numerous Jewish charities, including small ones that can’t survive,” Sirota said in an interview. “I’d love to put a hatchet in Bernie Madoff’s head, and I know there are other Jews who feel that way.”

To contact the reporter on this story: Janet Frankston Lorin in New York jlorin@bloomberg.net.

Last Updated: January 15, 2009 00:00 EST