Special Report

$50 Billion Meltdown from page All

areas, announced that it would close.
President and CEO Oran Hesterman said
the foundation's major benefactors were
affected by the Madoff collapse.
At least one nonprofit is asking for help
in the wake of the scandal. The Gift of
Life Foundation, a Jewish bone marrow
registry that relied heavily on Madoff as a
benefactor, announced on its Web site that
it would immediately need to raise $1.8
million to make up for recent losses.
The American Jewish Congress was
severely hurt by the collapse. A bequest
from major benefactors was invested with
Madoff and the AJC still does not know
the extent of that exposure.

Yeshiva U's $100 Million
Sources close to Yeshiva University, where
Madoff served as treasurer of the board of
trustees and board chairman of the uni-
versity's Sy Syms School of Business until
he resigned two weeks ago, said the school
has lost at least $100 million. Y.U. officials
declined to offer specifics.
Just as the reverberations of the sub-
prime mortgage collapse are still seen as
contributing to the nation's wider econom-
ic meltdown, philanthropic insiders say
the fallout from Madoff's scheme could be
even greater. The insiders note that Madoff
and others heavily invested in his fraudu-
lent fund were major supporters of a
plethora of nonprofit organizations, served
on their boards or advised those organiza-
tions on how to invest their money — in
some cases placing large sums of the
groups' capital in Madoff's hands.
Reflecting this sense that the full extent
of the damage is still unclear, the execu-

tive vice president and CEO of the UJA-
Federation of New York said that even
though its endowments were not exposed,
the organization still could be hurt if
donors lost money in the scheme.
New York Mets owner Fred Wilpon,
GMAC Financial Services chairman J. Ezra
Merkin and former Philadelphia Eagles
owner Norman Braman all were reported
to have taken sig-
nificant hits due to
their dealings with
Madoff.
Reports have
•tutut:
.446i.1?ramt em
- s
;"
surfaced also
that media mag-
nate Mortimer
Zuckerman was
significantly hurt
by investing with
Madoff.
In Los Angeles,
the Jewish
Community
Foundation's $238 Bernard Madoff
million Common
Investment Pool lost $18 million it had
invested with Madoff.
Among other Jewish institutions and
foundations believed to be hit by the
Madoff scandal: the American Jewish
Congress, the Technion-Israel Institute
of Technology ($6 million), American
Technion Society ($72 million), Steven
Spielberg's Wunderkinder Foundation, Elie
Wiesel's Foundation for Humanity and
Carl Shapiro's charitable foundation.
Ezra Merkin, who told investors in
his hedge fund, Ascot Partners, that all
of their money had been defrauded by

Madoff, is of particular interest to the
Jewish community. He has philanthropic
ties to a number of Jewish organizations
and institutions, serving as a volunteer
investment adviser for many of them,
including Yeshiva University.
Among other New York causes with
which Merkin is said to be connected are
the SAR Academy, a Jewish day school
in the Bronx, as
well as State of
Israel Bonds, The
Jewish Campus
Life Fund, Elaine
Kaufman Cultural
Center, the
Ramaz School,
Congregation
Kehilath
Jeshurun and
the Fifth Avenue
Synagogue.
Sources say
that several of
these entities had
money in Ascot,
which they now stand to lose because of
Merkin's decision to invest so heavily in
Madoff's fund. According to Orthodox
communal insiders, Ramaz and SAR lost
millions between them.

Merkin's Role
Some leaders in the Jewish community;
particularly within Modern Orthodox
institutions, are expressing shock and
anger at the role played by Merkin, who
appears to have misled at least some
investors.
Merkin stepped down Dec. 12 as a Yeshiva

trustee. He played a primary role in manag-
ing the university's endowment funds.
According to several sources close to
the institution, about $100 million was
invested through Merkin, which ended
up in Madoff's fund without the board's
knowledge and is presumed gone.
Yeshiva's endowment is now about $1.3
billion, down from $1.8 billion last year,
due largely to the general collapse of the
economy.
"What really emerges out of this;'
said Jeffrey Solomon, the president
of the Andrea and Charles Bronfman
Philanthropies, is that "people sometimes
forget to conduct the due diligence when
dealing with others with social promi-
nence — and especially in the hedge-fund
area where people think you have to be
really smart to be in hedge funds.
"In many ways, for all investments
something like this is tragic, but for non-
profits, where boards have the fiduciary
responsibility of acting with great pru-
dence, it is even more tragic!"
U.S. Sen. Frank Lautenberg, D-N.J.,
says his foundation has about $15 million
invested with Madoff.
Yeshiva University issued a statement
saying, "We are shocked at this revelation.
Bernard Madoff has tendered his resigna-
tion from all positions affiliated with the
university and involvement with the uni-
versity. Our lawyers and accountants are
investigating all aspects of his relationship
to Yeshiva University. We reserve our com-
ments until we complete our investigation."
News reports said many major inves-
tors were friends of Madoff from the Palm
Beach (Fla.) Country Club.

To Save Cash, Yoffie Proposes Merging Reform, Conservative Shuls

Ben Harris
Jewish Telegraphic Agency

New York

R

eacting to an increasingly
perilous economic outlook,
the leader of the Reform
movement proposed that some of the
movement's synagogues could consider
merging with Conservative congrega-
tions as a cost-saving measure. Rabbi
Eric Yoffie, in a speech to the Union for
Reform Judaism's board of trustees, said
that while he generally views American
Jewish pluralism as a source of strength,
communities in the current crisis may
no longer be able to afford multiple
synagogues.
"In a small town, it may be that a

struggling Reform and a struggling
Conservative synagogue will have to
overcome their differences and join in
cooperative programming, and even
formal mergers," Yoffie said Dec. 12 in
Tampa, Fla. "And in a large city, with two
or five or 10 Reform congregations, it may
be that the time has come to share social
services, buildings and staff"
Barriers have been falling for some
time between denominations, particu-
larly the more liberal ones, with leaders
of the various movements demonstrating
greater willingness to participate in joint
initiatives and share resources. This sum-
mer, the leading Reform and Conservative
seminaries announced that they would
be establishing a program, funded by the
Charles and Lynn Schusterman Family
Foundation, to jointly train clergy in vari-
ous areas of so-called practical rabbin-

ics: communal trends, management and
outreach.
But formal mergers between
Conservative and Reform synagogues,
movements that retain notable distinc-
tions in theological outlook and liturgy,
remain rare. Some eight American
synagogues are members of both move-
ments.
Rabbi Jerome Epstein, who heads the
Conservative movement's congregational
arm, the United Synagogue, said that
while he strongly favors sharing resourc-
es, only in rare cases have formal mergers
been successful.
"Our experience has been that it's
fraught with peril;' Epstein said. "What
you end up doing is making the ideol-
ogy and the values insignificant, and for
many people in congregations they are
significant:'

While Epstein declined to express a
firm opinion on Yoffie's suggestion, he
said the issue is mostly a practical one:
Can a merger advance without requir-
ing congregants to compromise their
religious values? Even within the same
movement, he said, synagogue mergers
often raise sensitive issues regarding the
new congregation's character.
Jerry Somers, the Reform board's hon-
orary chairman, said Yoffie's suggestion
was well received.
"I think difficult times call for new and
innovative ways to accomplish common
goals;' Somers said. And Rabbi Yoffie's
suggestion and urging that these things
be considered I think was very well
received and demonstrated that certainly
the movements can work more coopera-
tively and even together on certain types
of initiatives."

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Al2

December 25 g 2008

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