I Special Report
$50 Billion Meltdown
Photo courtesy Ro bert I. Lappin C harita b le Foundation
Madoff scandal rocks Jewish philanthropic world.
The children's program in Massachusetts of the Robert I. Lappin Charitable Foundation was forced to shut down in the wake of the Bernard Madoff scandal.
Jacob Berkman
Jewish Telegraphic Agency
New York
T
he securities fraud perpetrated
by Bernard Madoff has rocked
the Jewish nonprofit world
— and the worst may be yet to come.
Madoff, the founder of Bernard L.
Madoff Investment Securities LLC, was
arrested Dec. 11 in New York after admit-
ting to his sons that a hedge fund he ran
was essentially a $50 billion Ponzi scheme.
In a Ponzi scheme, money from new
investors is used to pay dividends to old
investors.
Two Jewish federations were listed in
press reports among major organization
who invested with Madoff. The Jewish
Federation of Greater Washington (D.C.)
has $10 million invested and Greater Los
Angeles has $6.4 million invested with
Madoff.
The JCC of Greater Washington, located
in Rockville, Md., had its entire $5.5 mil-
lion endowment invested.
The four Jewish federations in Michigan
— Detroit, Ann Arbor, Flint and Grand
Rapids — and the Jewish Community
Federation of Windsor, Ontario, told the
Detroit Jewish News last week that they
have no funds invested with Madoff.
At least two Jewish foundations have
beenforced to close because of the Madoff
collapse. The Robert I. Lappin Foundation
in Salem, Mass., announced Dec. 12 that
it would shut down after losing $8 million
— all of its money. And the Chais Family
Foundation, which gives out $12.5 million
each year to Jewish causes in Israel, the
former Soviet Union and Eastern Europe,
announced its closing Dec. 14.
Hadassah – the Women's Zionist
Organization announced that it had $90
million invested with Madoff. The orga-
nization said construction of the $75 mil-
lion Davidson Wing at Hadassah Hospital
in Jerusalem would not be affected by
the scandal. Detroit philanthropist Bill
Davison funded the new wing.
A new Ann Arbor charity, the Fair Food
Foundation, which promoted urban agri-
culture in the Detroit and San Francisco
$50 Billion Meltdown on page Al2
December 25 * 2008
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