Thanks Dick, "Licking Wounds, Post-Madoff"
LIBERATOR
Gary Weinrib use Charities as front for stealing. The perfect mask for
swindling and extortion is to use charities. Not all are bad, but most
were. Space monsters from Neptune, Mars, Saturn & Europa have
established charities, I do believe they were not involved in any
crime.
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http://online.wsj.com/article/SB10001424052748704193004574588193590367178.html
DECEMBER 11, 2009 Licking Wounds, Post-Madoff
Charities Recover and Revamp a Year After Ponzi Scheme Rocked
Finances
By SHELLY BANJO
North Shore-Long Island Jewish Health System
Days before news of the Bernard Madoff investing scandal broke, ground
is broken for a children's center at North Shore-Long Island Jewish
Health System last December. The organization had $5.7 million
invested with Madoff's firm. A donor later reimbursed the losses.
Charities still are scrambling to fill the holes left by Madoff
losses, and they are trying to make sure they don't get scammed again.
While several nonprofits were forced to close their doors because of
the collapse of Bernard Madoff's Ponzi scheme, others have rebuilt and
moved on with their missions.
"By personally calling our donors and articulating the power of what
we can do, donations are starting to come back," says Frank Donaghue,
chief executive of Physicians for Human Rights, a Cambridge, Mass.-
based advocacy organization. Still, the group cut its $6 million
budget by 30%, laid off a third of its staff and pared back some of
its advocacy programs.
The total hit to charities and major donors is in the billions. The
lingering economic downturn, state budget cuts and a steep decline in
donations have drawn the pain out longer, says Terry Lynam, a
spokesman for the North Shore-Long Island Jewish Health System, which
had $5.7 million, or less than 1% of its investments, in Bernard L.
Madoff Investment Securities at the request of an undisclosed donor.
Madoff Time Line
News of the Ponzi scheme that cost investors billions broke one year
ago today. Some key dates:
Dec. 11, 2008: Bernard Madoff is arrested by federal agents for what
he reportedly called 'a giant Ponzi scheme.' He is released on $10
million bond.
Dec. 15: A judge orders liquidation of Madoff's U.S. operations.
Dec. 18: The Wall Street Journal reports the SEC discovered in 2006
that Madoff had misled the agency.
March 12: Madoff pleads guilty to fraud. Bail is revoked and he is
jailed.
June 29: Madoff is sentenced to 150 years in prison for crimes the
presiding judge calls 'extraordinarily evil.'
July 14: Madoff begins serving his sentence in a North Carolina
prison.
The donor reimbursed the health system for losses. But it remains to
be seen if other strong supporters who were hit by their own Madoff
losses will resume their contributions. "Madoff's legacy continues to
inflict enormous tragedies," says a spokesman for real-estate
developer Edward Blumenfeld, a friend and investor of Mr. Madoff, who
had donated money for a new hospital pavilion. "Beyond that, we can't
comment."
The construction of the pavilion, which was to contain a new pediatric
emergency room and intensive-care unit, hasn't resumed because of a
lack of funding. Meanwhile, the organization expanded its fund-raising
efforts to include online solicitations and is asking donors to
bequeath money to the charity in their wills. They also have focused
on specific causes such as women's health to reach new donors.
Some of the hardest-hit charities are the ones where the principal
donors or foundations are entangled in the efforts to recover money
from the Ponzi scheme. Jeffry Picower, a financier known for the
millions he and his wife, Barbara, donated to medical research, was
accused in a civil lawsuit by court-appointed trustee Irving Picard of
reaping $7.2 billion in supposed profits from his Madoff investments.
Mr. Picower drowned after suffering a heart attack in his swimming
pool in October, leaving most of his estate to charity.
Other high-profile Madoff investors who supported Jewish
organizations, such as Carl Shapiro, founder and chairman of apparel
company Kay Windsor Inc., and Beverley Hills money manager Stanley
Chais, were investigated by prosecutors seeking to determine whether
they engaged in wrongdoing connected to the fraud, according to court
filings and people familiar with the matter. They haven't been
charged. Mr. Shapiro and Mr. Chais declined to comment.
Brandeis University, which had received $42.5 million for a new
science center, admissions center and social-policy forum from Mr.
Shapiro's foundation, switched fund-raising from construction to
financial aid. The school solicited donors nine months earlier than in
prior years and produced four live lectures online with prominent
faculty to remind donors "of the great education they got and the
financial needs of current students," says a university spokesman.
More on Madoff
Complete Coverage: News, analysis, graphics, more
Real-estate developer George Krupp, and his wife, Liz, sponsored a $1
million matching grant to spur $3 million for student aid. Fourteen
gifts of more than $1 million came in to close the year's expected
funding gap. Other charities are tightening their financial controls
and conflict-of-interest policies to ensure they don't get scammed
again.
Yeshiva University of New York hired law firm Sullivan & Cromwell LLP
and consulting firm Cambridge Associates LLC to devise new board-
governance policies. The university didn't invest directly with Mr.
Madoff, who served as chairman of its business school, but lost
millions through a feeder fund run by J. Ezra Merkin, an investment
committee member. In August, Yeshiva's board adopted a policy that
bars board members from doing business with the university. The school
also hired its first chief investment officer to manage its $1.4
billion endowment. A university spokesman said the loss, not including
fictitious gains, came to about $14.5 million.
Hadassah, the Jewish women's organization that booked a paper loss of
$90 million with Mr. Madoff, hired consultants from McKinsey & Co. and
outside counsel to investigate board-governance practices. Sheryl
Weinstein, the group's former chief investment officer, in August
published a book in which she alleged having an affair with Mr. Madoff
at a time she managed the group's investments.
"We wanted to understand what we could have done differently," says
Hadassah's president, Nancy Falchuk, who conducted damage control with
monthly podcasts, letters and town-hall meetings. "Nothing is more
important than our accountability to donors."
With 2008 revenue down 50% from a year earlier to $85.6 million,
Hadassah accelerated a previous restructuring plan to cut $35 million
in costs, laid off 25% of its staff and cut as much as 15% of funding
for all programs. The group also expanded fund-raising to other
countries, including Mexico, Russia and Germany. Ms. Falchuk says the
organization is back to pre-Madoff levels, raising about $7.5 million
a month.
—Amir Efrati contributed to this article.