Bernard Madoff has taken many charities for a ride, including the Jewish Federation in Los Angeles.
Cathy Siegel Weiss and Marvin I. Schotland write Dec. 13 to their Jewish Community Foundation [Los Angeles] board of trustees:
It has come to our attention that the Jewish Community Foundation [Los Angeles] is included among a number of major institutions as well as individuals who may have been victimized by an alleged fraud. We felt that it was important to share with you what we know at this point.
As you may have heard, on Thursday Bernard Madoff, a prominent member of the Wall Street investment community, and his investment firm were charged by the Securities and Exchange Commission with securities fraud for a multi-billion dollar “Ponzi scheme” that he allegedly perpetrated on clients of his firm. Regretfully, the Foundation was one of those clients. Mr. Madoff was highly regarded and his firm has been one of the most prominent firms on Wall Street for decades. We were shocked to learn of this alleged fraud.
Thankfully, none of the Foundation’s Donor Advised Funds were invested with Mr. Madoff’s firm and thus suffered no loss. However, the Foundation’s Common Investment Pool, which primarily consists of the Foundation’s permanent endowment funds and agency custodial funds, including the United Jewish Fund endowment, invested funds with Mr. Madoff’s firm in an amount aggregating $18 million. At the end of October, the investment was valued at approximately $25.5 million out of a total of approximately $238.6 million, representing approximately eleven percent of the assets in the Common Investment Pool.
The Foundation has engaged counsel and we are in the process of determining and assembling the relevant facts. We intend to thoroughly investigate and evaluate all of the facts surrounding this situation and to review the relevant policies, and we will make appropriate modifications in the event they are warranted. We are not in a position to comment further until we complete our factual investigation. As we acquire additional new and material information, we will keep you informed. Our intention is to be totally transparent as we work through this matter together. Notwithstanding any loss that the Common Investment Pool may experience as a result of Mr. Madoff’s conduct, we are proud of the Foundation’s long term record.
Given the delicacy of this situation and the lack of clarity surrounding the situation at this time, we must ask you, as members of the Foundation’s Board of Trustees, to refrain from discussing the Foundation’s relationship with Mr. Madoff beyond the facts stated in this letter.
Please feel free to contact either of us if you have any questions.
Cathy Siegel Weiss Marvin Schotland Board Chair President and CEO