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Madoff Scandal Hits Philanthropies and Institutions

The arrest of financier Bernard Madoff on 11 December on investment fraud charges
has sent waves crashing into scientific institutions and philanthropies
that invested in Madoff-backed schemes. Madoff contributed widely to
and served on boards of various Jewish and Israeli charities and
institutions, many of which invested in his hedge fund. Prosecutors say
Madoff’s fund was a $50 billion scam.

Yeshiva University in New
York, home to the Albert Einstein School of Medicine, has apparently
taken a significant hit. The Albert Einstein school is a major research
facility, as well as a medical training institution. Sources at Yeshiva
told the JTA news service
that the school has lost at least $100 million from its endowment
because of Madoff investments. Madoff served as treasurer of Yeshiva’s
board of trustees.

Technion-Israel Institute of Technology, in Haifa, Israel, invested in Madoff’s securities, according to the Israeli daily Ha’aretz, which estimates its losses at about NIS 25 million ($6.5 million).

Victims
of Madoff’s apparent fraud include foundations headed by household
names such as Nobel laureate Elie Weisel, Senator Frank Lautenberg, and
film director Steven Spielberg, as well as many smaller family
foundations and institutions that serve Jewish communities in North
America, Europe, and Israel. Madoff managed most of the investment
income of Spielberg’s Wunderkinder Foundation, which donated some $3.3 million for medical research to Cedars-Sinai Medical Center in Los Angeles.

Charities with larger exposure to Madoff’s schemes were less
fortunate. The Robert I. Lappin Charitable Foundation of Salem, Mass.,
which supports exchanges of teachers and students between Israel and
the
United States, invested all of its $8 million in Madoff’s fund and has shut down.

The
Madoff scandal has further shaken an already nervous environment for
philanthropies. John Ruskay, executive vice president and CEO of the
UJA-Federation of New York told JTA, "Already in the context of a very
challenging economic environment this
will present another significant difficulty. We don’t know yet the
extent of the wreckage."

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