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How did the Washington federation get roped into Madoff?

The Jewish Federation of Greater Washington was set to release two reports as to how it and its United Jewish Endowment Fund became entangled in the Madoff scheme, according to the Washington Jewish Week.

The documents have not yet been released to the public, but the federation did make them available to the paper:

In an e-mail written Tuesday to WJW, Butler said: "My understanding is that the IPC made its recommendations based upon a pure best practices analysis, and didn’t draft its report with an eye toward changing any particular things that were being done by our Investment Committee."

The investment policy committee had presented its 24-page "best practices" report to the UJEF trustees on Oct. 20; it was officially accepted by the trustees on Dec. 1.

The committee charged with examining the Madoff investments found that that they were "made in the ordinary course of business," and never raised red flags, according to the FAQ sheet.

In his letter intended for donors, Butler said the investment committee "believed that reliable returns of the kind Madoff Securities had demonstrated in the past would help fund important projects within the Jewish community."

That conclusion was based on several factors, Butler’s letter stated, including the Madoff fund’s "liquidity and consistent track record of steady returns."

In 2004, the UJEF invested $9.35 million in Madoff’s firm, and withdrew $4.5 million through Dec. 11, 2008, when the fund was frozen by federal authorities, according to the FAQ. UJEF also received a $500,000 disbursement from the Securities Investor Protection Corporation.

 

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