Madoff's Chosen People -- What Can and Can't Be Said Out Loud

Is there any non-Jew in America who was thinking about marrying or doing business with a Jew that is now reconsidering that decision because Bernie Madoff was Jewish?
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Since Bernie Madoff admitted that he had swindled hundreds of his friends and several charities out of $50 billion, we have learned very little regarding the details of his operation. We still don't know exactly how he did it, how many people were in on the scam, and where the money went. Eventually we will.

But there continues to be no shortage of emails, blogs, news reports, and commentaries -- most of them from inside the Jewish community -- and that is the part of this drama that continues to be most fascinating. Fascinating for what is being said and written, but far more for what seems most people feel they can't say out loud

The low-hanging fruit here is Madoff himself. He has become the lightning rod not just for his victims but for all of the frustration, anger, and fear that millions of Americans feel over the money they have lost during the last year. Make no mistake about it. Madoff is a crook who cheated a lot of people out of billions of dollars. He should and will spend the rest of his life in jail.

But let's get real here. Does it really make sense for the entire country to be sitting glued to its TVs watching continuous coverage of Madoff leaving his apartment, driving to the courthouse, walking in and out of a building, and then driving back home. I mean this is a guy who did some very bad things, but he didn't kill anyone or physically abuse his family. He cheated a lot of people and stole a lot of money. Period. Do we really need to be on "Madoff Watch" 24-7 with reporters and cameras camped outside his apartment building?

My fellow Jews love to write and talk about how horrible Madoff is and how much damage he has done to the Jewish people. Some have even compared him to Hitler which is scary because it means that money has become so important today that someone who steals money and swindles people is comparable to a person who engineered the murder of six million people.

My friend and teacher Rabbi Brad Hirschfield of CLAL wrote a blog for entitled "Madoff and Hitler -- Bernie, Adolf, and the Death of Proportionality" that laments what is says about us that such a comparison can even be made.

Most Madoff-bashers stop short of the Hitler comparison. But I have received dozens of emails from Jewish friends who want to make sure everyone knows what a horrible person Madoff is, how he has devastated the Jewish people, and how he has provided anti-Semites with new ammunition.

The most widely disseminated email is an article written by Rabbi Marc Gellman (no relation, although we have met) who wrote a piece for Newsweek entitled "A Letter to Madoff."

Rabbi Gellman's main point (I like the way that name sounds) is that Madoff should be ashamed of himself (he should) because his actions have devastated his best friends (they have), wiped out several charities and foundations (also true), and helped promote anti-Semitism (it hasn't). Is there any non-Jew in America who was thinking about marrying or doing business with a Jew that is now reconsidering that decision because Madoff was Jewish?

But, with credit to Sherlock Holmes, what I find most fascinating is the dog that isn't barking -- the questions that are not being asked of and about people who clearly shared blame for much of what has happened.

For example, there has been little said out loud about how a multi-millionaire, much less an entire charity, could put himself in a position where he could be totally wiped out as a result of having money invested with a single crook.

I have been an investment professional for almost 30 years and investor for even longer. On balance I have done well but there have been at least a dozen times that I have made an investment where I lost all my money. In most of those cases, I came to know for sure that I was cheated or lied to by one or more people who were involved.

On a few occasions I have been tricked, swindled, and/or robbed by people I knew and trusted. Everyone has. That's why no responsible person puts all their eggs in one basket--particularly if the basket is being held by a man whose honesty and integrity has been publicly questioned by a number of experts in national publications (Barron's in 2001) and before the Securities Exchange Commission (2005).

This is analogous to person taking all his money and/or all of a charity's money and betting it on a "sure thing" in a horse race. Then, against all odds and logic, the favorite horse loses the race and the entire bet is lost. Later it is learned that his jockey deliberately threw the race.

The jockey is clearly a crook and should go to jail. But how much of the blame for the financial disaster should go to the jockey and how much is on the head of the person who decided to bet all that money on a horse race in the first place?

For all of the obsession with the evil of Madoff, where is the discussion of the breakdown in oversight and governance of the trustees of those charities, universities, and non-profits who chose to invest all that money with a mysterious character who employed an investment strategy that no one understood?

I have chaired and served on many non-profit and school boards of directors. In each case, the first thing one is required to do upon becoming a trustee is to sign a Conflict of Interest document agreeing to never do business with or profit from their relationship with the organization they are helping to direct and oversee.

In most of the charities that were hurt the worst, it appears that Madoff or one of his asset gatherers served on their boards or were in positions of great influence. Why were the Conflict of Interest prohibitions waived by the others trustees in those cases? Where were the governance and the widely accepted standards of conduct in those organizations? With all the focus on Madoff's crimes, where are the conversations about the "victims" who behaved so irresponsibly?

The Jerusalem Post came the closest to raising this issue in a recent article which took an very gentle shot at the private foundations and charities which seemed to allow the ego and chutzpah of key players to take the place of sound institutional process. In this article, a spokesperson for the Jewish Federation movement--which has seen millions in assets and many key donors move away from the umbrella organization to start and run their own private foundations -- points out that having process and burocracy isn't always a bad thing.

But by far, the most interesting and telling piece I had read so far is author Joseph Epstein's recent column in Newsweek entitled "Uncle Bernie and The Jews."

Epstein concludes (as I did last month in my post "Bernie Madoff and his Chosen People") that one reason why Madoff has been so vilified by so many Jews -- even those who were not his victims -- is that many of us continue to view ourselves as part of The Tribe. So Madoff's actions were not just embezzlement and theivery -- they rose to the level of treason.

He notes that "Jews are still tribal enough to think of their co-religionists vaguely as family and that Madoff bilked his own family..."

But Epstein then goes off the track and comes to exact wrong conclusion about that tribalism.

He says the Madoff affair has highlighted the extent to which American Jews have gone astray. He views it as highly symbolic that Madoff solicited most of his victims at Jewish country clubs ("there is something deeply trivial about golf that is unseemly for Jews") which he considers part of the general "Episcopalization" of American Jews.

"A younger generation has now taken to giving their children WASPy first names, so that today one runs into such comic nomenclatural pairings as Tyler Ginsberg, Mackenzie Rosenthal, Hunter Fefferman, Kelly Rabinowicz, and other such preposterosities," Epstein concludes.

He says this assimilation has drained the energy from American Jews that made us so great in the past and finally states that the "silver lining" of the Madoff affair is that he "performed the valuable--if very expensive--service of demonstrating to his coreligionists, among others, that the waters of life are not as pacific as they seem."

I couldn't disagree with Epstein more.

What he and others lament as the "goyification" of American Jews is actually the reward we are enjoying from a battle that our parents and grandparents fought for decades and finally won. For many years, there was real anti-Semitism and discrimination against Jews in most of America. People changed their names, altered their physical appearance, watched what they said, and took great care not to seem "too Jewish" because there was a real price to be paid by Jews.

Today, there is no school, no profession, no neighborhood, and no potential spouse that is off-limits to Jews. That's how complete and total victory our people have won.

But, as with all victories, there are challenges that comes with success as well. Jewish institutions and organizations which for many years had a captive audience are now being forced to fight for business in an open marketplace and some have done a better than others at competing on a level playing field.

It is a hallmark of failing enterprises to blame the customers rather than focus on ways in which they need to change their own strategies to compete better. But any efforts to blame Jews for taking full advantage of the choices we now have is doomed to failure. No one with choices ever goes back to a more restrictive environment.

Today, most American Jews choose to become or remain Jewish because of the value that Jewish wisdom, values, and traditions bring to their lives. Being Jewish today is an active choice. People will not choose to stay on board because the rest our non-Jewish neighbors hate us so much and isolate us so badly that we have no choice but to stick together. Some of my Jewish friends haven't gotten that message yet.

It is true that the Madoff affair has pointed out the need for Jews to move beyond tribalism, or at least redefine what it really means to be a Member of the Tribe. But longing for a return to the good old days -- the days that weren't considered so good by the people who worked tirelessly to change them -- is not the answer as Epstein suggests. Our parents and grandparents would say "good riddance" and look with pride -- not apology -- at their great victories which helped create the new Jewish reality in our country.

So I will let everyone else obsess over Madoff himself. How did he do it? How much money did he really steal? How many other people were in on it? Where did the money go? Should he be imprisoned in his apartment or in jail while he's awaiting trial?

At the end of the day, what difference does it make? What's done is done. Madoff was a crook. He stole a lot of money and he'll die in jail and no one will get their money back.

It's the drama, soul-searching, and thoughts of my fellow Jews that continues to be most fascinating to me. It's all about what is said and what isn't. And the lessons that some people claim be learning from this episode say a lot more about themselves and their own world view than they do about Madoff.

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