Madoff Charities: The Continuing Lack of Website Transparency of American Jewish Congress – Installment 43December 16, 2010 – Articles White Collar Defense & Compliance Blog
This is the forty-third in a series of Installments on this blog that discuss issues that arose in the aftermath of the Bernard L. Madoff (“Madoff”) scandal, especially for the charities that invested with him. In particular, Installment 33 and Installment 31 of this series provided analysis of American Jewish Congress, Inc. (“AJCongress”) and the consequences of its reported huge losses from investing with Madoff.
Installment 31 stated that, on July 22, 2010, AJCongress President Richard S. Gordon (“Mr. Gordon”) reported on the AJCongress Website that the organization was suspending operations after, among other things, “Bernie Madoff stole approximately $21 million from our organization. . . .” [Emphasis supplied]
An article on December 13, 2010 by Jacob Berkman in “The Fundermentalist” quotes Mr. Gordon as having said the following, in response to an earlier media report that AJCongress was subject to “clawback” by Irving Picard, Trustee for the Madoff bankruptcy (“Mr. Picard”):
There is no talk of a clawback from us with the trustee . . . . Madoff stole approximately $23 million from us. There has been no discussion about [the American Jewish Congress] paying back money. . . . Hadassah signed for a completely different reason. . . . I can in all honestly [sic] say [a clawback] never seriously crossed my mind once.... We are operating and working on a number of different projects. Obviously we are in a period of evaluating how to move forward.... the nature of how we go forward has not been determined yet.
Perplexingly, however, on December 9, 2010, four days earlier, AJCongress, like Hadassah (as reported in Installment 42 of this series) entered into a stipulation with Mr. Picard in the Madoff bankruptcy case (the “Stipulation”) to toll the statute of limitations on potential claims against AJCongress (Case Number: 08-01789-brl Document Number: 3328 in the United States Bankruptcy Court for the Southern District of New York). Presumably, Mr. Picard deemed the Stipulation to be necessary to reserve potential rights to file suit against AJCongress in the future.
While AJCongress does not appear to be continuing its mission as usual, it is certainly continuing business on its website in soliciting memberships and donations. As reported in Installment 33, on August 5, 2010, I became an individual member in AJCongress online with a credit card payment. On December 15, 2010, I made a donation online with a credit card payment. An unknowing visitor to the AJCongress website could easily become a member or make a donation without any alert on those solicitation pages as to the current limbo status of the AJCongress mission.
The only obvious change in disclosure since July 22, 2010 on the AJCongress website was the deletion of its 2009 Annual Report, which, as reported in Installment 31, conflicted in its narrative with other statements of Mr. Gordon as to the current state of AJCongress affairs.
The AJCongress website ends its “About Us” page with the words: “We are an effective voice defending Jewish interests and advancing Jewish hopes, values, and aspirations.” In my view, its voice would be more effective and credible if the disclosure deficiencies on the AJCongress website were addressed and rectified promptly.
[To be continued in Installment 44]