Hadassah’s bigger worry


The New York Times makes up for being a day late with the Sheryl Weinstein story with a lengthy top-of-the-front-page-of-the-business-section article.

Perhaps the most important point made in the article is that this tabloid talk is a distraction from what is possibly the biggest Madoff-related issue hanging over the organization’s head:

Ms. Weinstein’s headlines are not Hadassah’s biggest worry these days. Because it withdrew far more cash from its Madoff accounts than it contributed, it may be vulnerable to a lawsuit by the Madoff bankruptcy trustee, who is trying to recover money for those victims who put in more than they took out.

The trustee, Irving H. Picard, has said publicly that he is unlikely to go after small or thinly financed charities that already have used their Madoff profits for grants and operations. But Mr. Picard has not yet addressed the issues posed by large, wealthy charities that reaped profits from their Madoff investments. He declined to comment on Thursday about Hadassah’s specific situation.

Hadassah says that for nearly a decade starting in 1988 it invested $40 million with Madoff. At the time the scheme was exposed last year, the organization thought its account with him was worth $90 million, leading to much initial talk about the losses suffered by the organization. But what emerged later was that over the years Hadassah had withdrawn $130 million from its Madoff account. The New York Jewish Week took a deeper look at the issue earlier this year.

A few other tidbits from the story in The Times…

* Ruth Madoff’s lawyer is making the "if he didn’t tell wife when he cheated on her, what makes you think he let her know that he was cheating other people out of their money" argument:

Ruth Madoff, who has been married to Mr. Madoff for almost 50 years, knew nothing about the “alleged affair,” said Peter Chavkin, her lawyer. While that, unfortunately, will not ease the pain of the people destroyed by the Madoff fraud, he continued, the allegation “stands as a powerful reminder, to those who say Ruth must have known of her husband’s criminal scheme, that there are some things that some spouses — however close they are — do not share with each other.”

* According to The Times, Hadassah has declined identify the members of its investment committee, of which Weinstein was once a member during his stint as CFO.

Indeed, the Madoff scandal raised questions in the nonprofit community about how well charities managed their investments and monitored their conflicts of interest, with some watchdog organizations saying that some groups left those decisions to small, clubby boards or influential insiders.

Hadassah has declined to identify the members of its investment advisory committee, other than to say they are “prominent and experienced financial and investment individuals” who serve without pay and are not members of its large governing board, whose membership rotates frequently.

But the organization did confirm that one member of that committee was Ms. Weinstein, who was on Hadassah’s staff for more than a dozen years.

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