Across Los Angeles' sprawling Jewish community, rabbis and lay leaders are asking themselves a disturbing question about Bernard L. Madoff: How could one of our own take money from us, especially money that we intended for the poor?
"It's a desecration of God's name and the Jewish people who worship God," said Rabbi Elliot Dorff, a philosophy professor at American Jewish University in Los Angeles who sits on the boards of two Jewish agencies that lost money.
For The Record
Los Angeles Times Friday, December 26, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 66 words Type of Material: Correction
Madoff investment: An article in Wednesday's Section A about the financial scandal involving Bernard L. Madoff said that Beit T'Shuvah, a rehabilitation center based in Culver City that serves drug addicts and others, lost $3.6 million in endowment money through Madoff-related investments. Beit T'Shuvah had $3.6 million invested with the Jewish Community Foundation. Of that amount, $200,000 was lost because of the foundation's investments with Madoff.
"It's the exact opposite of what the Talmud says, which is that all Jews are responsible for each other," he said.
The list of Jewish organizations and philanthropies harmed in Madoff's alleged investment fraud features revered names on both coasts: Jewish Family Service of Los Angeles, Yeshiva University in New York, the Manhattan-based women's organization Hadassah.
If Madoff acted as charged, he violated the basic Jewish tenet of probity, all interviewed agree, and perverted the very concept of tzedakah, the Hebrew word for righteousness that is commonly translated as charity.
They said his involvement in charitable causes gave him a leadership position and simultaneously allowed him to use that position to undermine charities. In the process, he trampled codes of right and wrong in the Torah that, at least in theory, bound him to the fellow Jews who allegedly suffered at his hands.
The Madoff scandal has hit many Jews particularly hard because it connects to two deeply felt emotions: reverence for Jewish charity and anxiety about what the rest of the world thinks of Jews. Charitable giving is one of the major ties that binds together the diverse parts of the Jewish community and serves as a source of status within it.
"Madoff does not represent the Jewish people, not even remotely," said Rabbi Jonathan Klein of the Progressive Jewish Alliance, a group devoted to social justice causes. "Internally, we have to hold ourselves to the highest standard possible because we know our tradition demands justice and decency."
Madoff is not the only Wall Street financier to face accusations of fraud. Jews and non-Jews alike have been accused of similar misdeeds.
But the scam he is accused of, which is believed to have cost investors $50 billion, stands out for its sheer magnitude, victims say.
His alleged Ponzi scheme ensnared banks, schools, individual investors and a wide variety of nonprofit organizations.
Among the victims were well-known Jewish philanthropists and organizations -- including the Elie Wiesel Foundation for Humanity and Yeshiva University. Madoff had served as a trustee of the university, which lost an estimated $110 million.
"The irony here is that the biggest losers were the Jews," said Jay Sanderson, chief executive of Jewish Television Network Productions, which is suffering losses because two of its key charitable supporters have gone belly up. "I'm speechless."
Sanderson and others worry about the Madoff allegations providing fodder for extremist rants about Jews being greedy. In fact, the Anti-Defamation League has reported an uptick in anti-Semitic material on the Internet since the Madoff story broke last week.
"When people grab onto a story like this, and in the age of Internet it happens with lightning speed, the haters and extremists among us [are] quick to use it as a headline for outreach," said Amanda Susskind, the ADL's regional director in Los Angeles. "You have the potential for this to be the basis of fostering more hatred toward Jews and minorities and others who are different from the white supremacists."
Rabbi Yitzchok Adlerstein tackled some of the moral dilemmas raised by the Madoff scandal in his Jewish law class last week at Yeshiva of Los Angeles Girls High School. He turned the episode into a lesson about character development and the ethical components of the Torah.
Adlerstein wanted his students to understand the range of human motivation -- from Madoff's apparent frailties to the dedication displayed by two other Jews, Rabbi Gavriel Noach Holtzberg and his wife, Rivkah, the young Chabad couple killed last month by terrorists in Mumbai, India.
"Part of the Torah's teaching is awareness of self-interest," Adlerstein said. "So much of our behavior is in the small areas of life, not the big ones about cheating people out of $50 billion. To most of us, the important issues are the many decisions we make every day."
A few miles south of the Robertson Boulevard high school, Harriet Rossetto tried to derive her own meaning from the Madoff scandal.
Rossetto has devoted her life to rebuilding the lives of con men, addicts and others at Beit T'Shuvah, a Culver City rehabilitation center whose Hebrew name means "house of return and repentance."
Along with many other nonprofit agencies, Beit T'Shuvah lost endowment money -- $3.6 million worth -- in Madoff's alleged scheme. The loss will translate to a $200,000 drop in endowment income for the center.
Rossetto isn't sure yet how the Madoff fiasco will affect her 120-bed treatment facility.