Charities Collapse Under Ponzi Scheme

Wednesday, December 17, 2008

Dennis Berman, deputy editor of the Money & Investing section of the Wall Street Journal, explains why the fallout of the Madoff Ponzi scheme will hit Jewish charities especially hard.


Dennis Berman

Comments [24]


God knows you would not want me in charge of managing anyone's pension fund.
I'm not dissing the mba so much, I'm just amazed how many young kids are going for it. I don't necessarily know that they're wrong in doing this, but it just seems strange. If the incentive is to make the big bucks to pay back their college loans, well, doesn't it make more sense to go into something more stable? Dentistry may pay off in a more suitable, longterm fashion. But then, I've always undervalued the mba. I said that in 2001 and look what happened.

Dec. 17 2008 10:02 PM
Joe from NJ

Eva (22):
It wasn't the knowledge of business and finance (MBA ownership) per se that led to this crisis. Much of this was caused by greed and poor or non-existant application of business fundementals by people who were responsible for managing others' money. I can understand you cynicism; however, what's the point of an MBA? For one thing, without one an ethical person such as yourself would never be placed in charge of managing, for instance, a teacher's union pension fund, a company that underwrites municipal bonds (funding the work of all those civil engineering grads), venture capital firm investing in alternative energy, a group of investors that helps keep the New York Times from going bankrupt. Go for it! Get that MBA and change the world!!

Dec. 17 2008 06:37 PM

#20, Joe from NJ,
Given how many people who led us into this crisis had MBA's.... what is the point of an MBA?
I've met so many recent college grads who are now prepping for the GMAT. When I ask them what kind of grad school they're planning on, they say b-school. For an MBA.
Does no one want to do something useful for the world? What's so wrong with being a dentist or a bone-setter? Or a civil engineer? Or, God forbid, a plumber?
People say history majors and English majors are useless. Well, they may be useless, but it seems to me they do a hell of a lot less harm than the MBA's have done.
#21, same guy, yes, the silence from Schumer is deafening. Ditto the editorial board of The New York Times. As for WNYC, they're undoubtedly going to be impacted by Madoff's schemes, if not directly then indirectly, and they may not be sure how to handle this.

Dec. 17 2008 05:42 PM
Joe from NJ

And another thing....
Am I the only democrat who was truly depressed by Sunday’s NY Times piece on Chuck Schumer? The Madoff episode aside, am I the only NYC area resident stunned by the deafening silence from Senator Schumer or for that matter, WNYC or the editorial page of the NYT over the past 3 days? Where is the outrage today? Am I just totally naïve? This guy was completely dependent on the financial industry that he was in charge of regulating for all of the policies that he championed. Where was the “push back” from taxpaying skeptics, academic economists, the “Warren Buffets” of the world? They can’t all be off playing golf with Bernie Madoff, Charles Prince and Henry Kravis. Sure…stick up for the local “industry”, but guess what…it’s now in ruins and may never recover in NYC. I guess you don’t have to be a Republican from Texas to act like Bush. If he was GOP from the energy patch whose poor oversight helped lead to industry collapses requiring 800 billion dollar bailouts there would be blood on the streets. Just compare this to the public’s response to that of NYT’s piece on McCain and Vicki Iseman. I guess we’ll have to rely on Caroline Kennedy to straighten things out. Don’t hold your breath.

Dec. 17 2008 05:21 PM
Joe from NJ

Two months ago some people were saying that the secretive hedge funds were where the “smart money” was and that they were (mostly) invulnerable to the current economic crisis. Two years ago people were saying that taking the time to attend business school and obtain an MBA was a waste when the really smart folks were going straight into hedge funds. How the mighty have fallen!! The fallout from Madoff will be bloody and felt for years. I’m sure Madoff is not the only Ponzi on the block. The aura of trust in secretive investment geniuses is over. Unfortunately they were helped by the false aura of diligence that our paper lion government regulatory infrastructure projected. Obviously New Orleans was not the only city in the US with leaky levees.

Dec. 17 2008 05:19 PM

from wiki: "The Innocence Project refers to a number of non-profit legal clinics in the United States and Canada. It directly serves defendants who can conclusively be proven innocent by DNA testing of evidence done after their convictions.[1]"

If you look at their cases listed alphabetically, the very first person on the list is named Abdul, a black man who converted to Islam.

Sorry, but Madoff isn't just hurting "rich Jews", and Jewish charity isn't restricted to Jews.

Jewish people have been integral to the struggle for civil rights in this country. They shouldn't all be characterized as Palm Beach Country Club types. If you're going to do that, then every goy is a Nixon, or a Rockefeller.

Dec. 17 2008 12:57 PM

The Innocence Project, which was invested with Madoff, surely wasn't focused on assisting Jewish people?

Enough with the baiting. Tami is right. (And I salute anyone trying to raise a family of five(!) in NY on a such a modest budget.)

This reminds me of Lewis Black, pointing out that we should not be providing obscene tax breaks to the super-rich so they can give to charity. That is backwards. Our government should be allocating resources that provide some basic minimum standard for all - and we should start with education.

Dec. 17 2008 12:32 PM

Ralph are you a Jew baiter or are you serious?

Dec. 17 2008 11:38 AM
Voter from Brooklyn

Susan from Kingston, you are so very right. This story isn’t really about the plight of the Jews, it’s about people (these people) whom, like most all Americans, want easy money with no risk. Ignorance is their blanket, so no one really pulled the wool over their eyes. Yes, it is sad… and even though it’s only a slither of their fortunes, charities rely on these donations.

Tami from NJ, Maybe post meant “these people” in the way I used it above… people wanting a quick and easy buck, or maybe they did mean Jews. It does play into popular stereotypes. That said, the story does have an air of Jewish victimhood (the story could have been a policy and regulation one without this angle) . Another popular stereotype.

Dec. 17 2008 11:37 AM

I hope the Brooklyn Orthodox community invested with this guy. Those guys are cheats and crooks and very few lenders lend to businesses run by them.

Also Israeli companies are notorious in their financial dealings.

I hope they all invested with Madoff and got wiped out.

Dec. 17 2008 11:34 AM
Happy Goy from brooklyn

I never thought I would consider myself fortunate to be excluded from Jewish philanthropic circles.

Dec. 17 2008 11:30 AM
david from NYC

I am sure the middle men involved in this scheme, new madoff was up to no good and still put their trust in him and this insider scheme, and it blew up in their faces and he scammed all of them. Just the thought of only way of being brought in is by someone you should have raised a red flag that it was corrupt they all knw what was going on.

Dec. 17 2008 11:29 AM
Tami from New Jersey

There are a few comments posted referring to "these people". May I ask who "these people" are exactly? Am I one of them just because I'm Jewish even though I'm trying to support a family of 5 on 50K/year with absolutely no money left over to save or invest at all?

Dec. 17 2008 11:29 AM

Brain Tumor Behavior.

Dec. 17 2008 11:28 AM
Susan from Kingston, New York

This story really reflects America's obsession with making money with money, especially somebody else's money and then acting like they are generous people when they give a faction of it to charity! Disgusting!

Dec. 17 2008 11:26 AM
Kitty from Brooklyn, NY

What I want to know is Where has all the money gone? He took it, distributed some but where is the rest? I have to account for pennies in my life but where are BILLIONS?????

Dec. 17 2008 11:26 AM
James from Brooklyn

What about the smaller retirement investor? We take for granted that when we buy an S&P 500 index fund, that money will be invested in those equities. How do we verify that our funds are actually being invested where they claim? Or do we just have to rely on the good name of our retirement account managers? What recourse would we have if they were putting our money with a theoretical Bernie Madoff, instead of where we had allocated it?

Dec. 17 2008 11:25 AM

So they did it to themselves. Now they know what it's like to get a taste of their own medicine.

Dec. 17 2008 11:25 AM

I don't have a problem with Speilberg and Mort Zuckerman getting hosed. They are filthy neo-cons. And, I don't mind superrich Jews getting hurt.

But I feel bad for those that lost their entire savings in this scheme.

Dec. 17 2008 11:22 AM
just like robert

yes can you have a whole segment on these people?

Dec. 17 2008 11:22 AM
hjs from 11211

you would have more fun if you went to atlantic city

Dec. 17 2008 11:20 AM
Scott Smith

A correction on some of Madoff's victims. Mort Zuckerman was on the News Hour last night and claimed that he was not invested directly in Madoff, but was invested in a fund that was 100% invested in Madoff despite claims of diversity.

Dec. 17 2008 11:19 AM
Elizabeth from Monmouth County NJ

Surely this man must have considerable personal assets to have been part of this intensely rich crowd -- can't these be confiscated sold and the monies distributed to those who were bilked? Once the money trail is revealed, can't it be repossessed and redistributed? Fifty billion can't just "disappear" ... as they said in Watergate, follow the money.

Dec. 17 2008 11:17 AM
Robert from NYC

i really don't care about any of these people, frankly. Let them feel it too.

Dec. 17 2008 11:08 AM

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