|Hadassah: Madoff Scam May Cost Us $90M|
Hadassah: Madoff scam may
cost us $90m
HOFFMAN, JTA AND AP
December 18, 2008
Hadassah, the Women's Zionist Organization of America, announced Wednesday
that it had invested $90 million with Bernard Madoff, who has been charged
with securities fraud.
"We are currently in the
process of investigating the exact amounts and their impact, but it
appears that at the time of his arrest, Hadassah had approximately $90m.
invested with his firm," the organization said Wednesday in a statement.
"Falling victim to this
unprecedented fraud will require us to make necessary adjustments, but
it has not in the slightest affected our commitment to our core Zionist
mission. These are indeed turbulent times, but the key pillars of Hadassah
remain as strong as ever."
Hadassah was already facing
tough times because of the current economic downfall, adopting cuts
in its operating budget and expecting additional reductions in the coming
months. The details of the yet-to-be-determined cuts are likely to become
more clear following a board meeting in January.
"Now the Madoff situation
compounds and accelerates the matter," said a source close to the
A Hadassah spokesman said it
was not clear whether the losses connected to Madoff would affect the
construction of a new tower at its main campus in Ein-Kerem.
Meanwhile, the US Congress
will investigate the alleged pyramid scam run by Madoff, a leading House
lawmaker said Wednesday.
Madoff, who has been charged
with securities fraud, remains free at his Park Avenue apartment, after
the judge overseeing his case agreed to renew his bail.
The 70-year-old financier had
been free on $10 million bond but now must wear an ankle-monitoring
bracelet and observe a 7 p.m.-to-9 a.m. curfew.
Madoff did not appear in court
after Judge Gabriel Gorenstein canceled a scheduled bail hearing and
issued the changes in a written order.
Madoff agreed to surrender
his vacation houses in Montauk, New York, and Palm Beach, Florida, if
he flees. The change was submitted after Madoff said he was unable to
find two cosigners (in addition to his wife and brother) to vouch for
Madoff's attorneys have until
Monday to submit additional paperwork.
The scandal has "further
weakened already-battered investor confidence in securities markets
and has raised more troubling questions about the effectiveness of the
regulatory system," said Rep. Paul Kanjorski (D.-Pennsylvania),
chairman of the House Financial
on capital markets.
Kanjorski said he'll convene
a congressional inquiry early next month to examine the alleged fraud
and to determine why the Securities and Exchange Commission and other
regulators "failed to detect these substantial evasions."
The planned congressional inquiry
follows a stunning rebuke that Securities and Exchange Commission Chairman
Christopher Cox leveled against his agency's career regulators, blaming
them for a decade of failure to investigate Madoff and for failing to
detect the largest pyramid scam ever.
At the Justice Department,
a spokesman said that Attorney-General Michael Mukasey had recused himself
from the investigation into Madoff. Mukasey's son Marc is representing
Frank DiPascali, a top financial officer at Madoff's investment firm.
DiPascali was the Madoff employee
with the most day-to-day contact with his investors. Several described
him as the man they got on the phone when they had questions about the
firm's investment strategy, or wanted to add to or withdraw money from their accounts.
Authorities have not said publicly
whether DiPascali is suspected of any wrongdoing.
"We are trying to learn
the facts like everybody else," Marc Mukasey said, in a phone interview
with The Associated Press on Tuesday.
A former SEC attorney, Eric
Swanson, married Madoff's niece Shana last year, The Wall Street
The SEC's compliance office
issued a statement on Wednesday saying Swanson was part of a team that
looked into Madoff's securities brokerage operation in 1999 and 2004.
The SEC cited its "strict rules" prohibiting employees from
participating in cases involving firms where they have a personal interest.
The SEC's inspector general,
David Kotz, said on Wednesday that as part of his investigation, he
intends to examine the relationship between Madoff's niece and Swanson.
"There are a lot of different
issues" as outlined in Cox's statement, Kotz said. "We obviously
will move as soon as possible." Date: 12/18/2008