Madoff scam wipes out assets of Minnesota family foundations

Bernard Madoff
REUTERS/Brendan McDermid
Bernard Madoff exits the Manhattan federal courthouse in New York on Jan. 14.

A number of Minnesota-based private foundations that have given generously to Jewish institutions apparently have lost most or all of their assets in the Bernard Madoff investment scam.

Nicholas D. Kristof, Pulitzer Prize-winning columnist for the New York Times, published a list of private foundations (PDF) with exposure to what prosecutors describe as Madoff’s massive Ponzi scheme. The list, which was compiled by Daniel E. Smith, of Benefit Technology Inc., and published Jan. 29 on Kristof’s blog, includes five Twin Cities-based Jewish-oriented family foundations that appear to largely have been wiped out.

Four of the foundations gave their largest single donations in 2007 to the Minneapolis Jewish Federation. These contributions totaled $572,000 in the 2007 fiscal year; it is not known how much the foundations contributed or pledged in 2008 and 2009.

The following losses in the Madoff scam are based on Kristof’s figures, from IRS Form 990-PF (“Return of Private Foundation”) filings:

• Phileona Foundation — possible loss of entire $54.5 million in assets; contributed $350,000 to Minneapolis Jewish Federation in 2007; also contributed $103,000 to Temple Israel, Minneapolis, and $50,000 to Sholom Community Alliance;

• Broms Family Foundation — possible loss of $1,678,427, out of $2,005, 612 in total assets; contributed $125,000 to the Federation;

• Charles and Candice Nadler Foundation — possible loss of nearly all of $540,000 in total assets; contributions to a variety of Jewish agencies and synagogues;

• Moscoe Family Foundation — possible loss of about $700,000 in total assets; contributed $58,000 to Federation; and

• Steven C. and Susan L. Fiterman Foundation — possible loss of entire $2 million in assets; contributions to a variety of Jewish organizations and synagogues.

The Kristof list also includes the Miles and Shirley Fiterman Foundation of Palm Beach, Fla., which appears to have lost all of its $60 million in assets to Madoff’s firm. In 2007, the foundation contributed $166,726 to B’nai Israel Synagogue in Rochester, Minn., and $32,812 to Temple Israel in Minneapolis.

In his blog, Kristof points out that “a few private foundations have owned up to the money they’ve lost with Mr. Madoff, but most haven’t. … I’ve obtained a list of nearly all the private foundations that invested money directly with Mr. Madoff, at least at the time of their most recent tax filings. Even in the unlikely event that they cashed out since then, they may still have to repay the money to others.”

Kristof adds: “What is staggering is how many of these 147 foundations had all their assets invested with Mr. Madoff and may have been wiped out as a result.”

That seems to be the case with nearly all of the Jewish Minnesota-based family foundations.

The Jewish World reported previously that Ruth and Harold Roitenberg, among the most generous philanthropists in the local Jewish community, lost millions in the Madoff scam (12.19.08 AJW). Harold Roitenberg told the newspaper that his family’s charitable lead trust also was invested with Madoff. In addition to their large lead donations for Sholom Community Alliance building projects, the Roitenbergs also are major contributors to the Federation, listed high on the organization’s “Honor Roll of Giving.”

The AJW contacted the Minneapolis Jewish Federation about the imminent loss of contributions from the local family foundations obliterated by Madoff.

“The Madoff scandal has affected many people around the country, and Minneapolis is not immune,” the Federation responded in an e-mailed statement. “Generous philanthropists who have given so much to the Minneapolis Jewish community can no longer sustain the same level of support. This scandal — along with the impact of the economic downturn — will affect the 2009 Federation Annual Campaign. We are in constant communication with our partner agencies, working collaboratively with them to ensure, to the best of our ability, that we are able to continue meeting the needs of our community. We take comfort in knowing that there are still thousands of donors providing support to help us keep vital programs and services alive. With nearly $10 million raised to date, we will continue our efforts and know that together, we will weather this storm and emerge a stronger, more resilient and more caring community than ever before.”

Representatives of the local family foundations contacted by the American Jewish World declined to comment for this story. Some requested that their names not appear at all, although private foundation tax filings, which list the names of directors, are public information.

A director of one foundation simply said, “Our foundation was wiped out.”

Mordecai Specktor is editor and publisher of the American Jewish World. This article is reprinted with permission.

 

Comments (2)

  1. Submitted by Tim McGuire on 02/05/2009 - 03:19 pm.

    And this guy is running around free with ankle bracelets? We all need to scream louder about this. Madoff’s freedom on bail mocks all of us and all of the people who have suffered at his hands. O have to believe public outcry can fix this.

  2. Submitted by Lauren Stephens on 02/07/2009 - 08:35 am.

    this madoff thing amazes me. no one is talking about where all this money is. did it go south when the economy crashed? did he take it and spend it? is it still there somewhere? and why isnt he in jail? has anyone checked his political contributions to see who is involved here? and why is it if someone steals a candy bar, they get treated a lot worse than this….

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