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Community funds, post-Madoff

July 1, 2009 – 9:18 pm7 Comments

By The Hasid

Bernie Madoff has been sentenced, symbolically, to 150 years in prison for his fraudulent crimes. As someone who is not terribly financially literate (and who gets clammy-palmed telling even the whitest of lies), it continues to astound me that it was possible for one individual to single-handedly (well, perhaps) lose fifty billion dollars. And yet the extent of Madoff’s crimes are still unknown. Certainly, it’s impossible to measure the losses dealt to the numerous individuals, charities and non-profits who trusted Madoff with their money. But enough with the platitudes, there’s nothing new there. I have a question.

My question is not about Madoff’s Jewishness, and whether it is somehow made him more likely to do bad things with other people’s money. Don’t get all het-up, now. Any suggestion that Jews are more likely to screw you and your money around is just dangerous, old-fashioned anti-Semitism. (Although Madoff’s Jewishness did perhaps facilitate his access to various influential Jewish people and organisations.) Unfortunately, bad people of all religions and ethnic extractions do bad things to other people all the time.

My question is about the transparency of the communal organisations of that entrusted their funds and endowments to Madoff: quite simply, was there any?

What sort of responsibility did the Jewish Community Centre (JCC) of, say, a mid-size American city have to report their financial investments and policies to their community members, or an external auditing body?  I’m not suggesting any wrong-doing or complicity on the part of said communal organisations. Obviously, they are in no way to blame for Madoff’s transgressions. But how open were their financial policies to debate, even scrutiny?

And – this is a question that might be un-PC to ask, but anyway – to what extend did the JCCs et al of America trust Madoff because he was Jewish? Madoff’s reputation was stratospheric. It’s hard to argue – or indeed, even have doubts – when everyone else is telling you someone is trustworthy, one of the tribe, and apparently a worker of financial miracles. So did people just assume that because Madoff was Jewish, he was less likely to engage in any morally dubious activity? And, if so, isn’t that just as dangerous as assuming someone’s going to do something morally dubious because they’re Jewish?

Lastly, what do we in Australia have to learn from the experiences of our American counterparts? Could something similar happen here? Or are we, more (ahem), Sensible?

Lots of questions.

Answers?

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