NEW YORK – The stunning array of charges against William Rapfogel, the disgraced former head of the Metropolitan Council on Jewish Poverty, should prompt Jewish organizations to engage in soul-searching and make governance changes to avoid similar misfortunes, say experts in non-profit management and ethics. But that, they say, isn’t happening.
Charming and savvy, Rapfogel was arrested September 24 and charged with grand larceny, conspiracy, money laundering and tax fraud for having allegedly stolen $5 million over his two-decade-long tenure as chief executive officer at Met Council, the premier anti-poverty organization working among New York's Jewish community.
According to the indictment, in August investigators found some $420,000 in cash stashed in Rapfogel's apartment and upstate New York vacation home. He is out on $100,000 bail (paid in cash) pending his first court date in January 2014, said Andrew Friedman, a spokesman for the state's attorney general.
Rapfogel’s arrest – and the extensive charges against him – left the local Jewish community, where he was widely viewed as an exemplar of effective leadership, stunned. “I don’t know of another case in the non-Jewish or Jewish community where people were so adoring of someone and then so disillusioned,” said Naomi Levine, executive director of the Heyman Center for Philanthropy and Fundraising at New York University.
Moses Pava is a professor of business ethics and dean at Yeshiva University’s Sy Syms School of Business, and author of the book “Jewish Ethics in a Post-Madoff World: A Case for Optimism.” He compared Rapfogel to Bernie Madoff, whom he had met several times before the investment tycoon pleaded guilty to the largest financial fraud in U.S. history, in 2009. Madoff “came across as a very trustworthy kind of person, someone you wanted to trust and believe. It was the same kind of shock when we heard about this,” said Pava.
“I’d like to believe this will be a wakeup call to the veteran organizations to think more clearly and to put in place more diverse leadership,” said Shifra Bronznick, a strategy consultant to non-profit organizations and founding president of the advocacy group Women Professionals and the Jewish Community. “But my experience is that it hasn’t been.”
She and other experts say that what allowed Rapfogel to get away with the alleged scheme over such a long period of time was not only his persona, but the fact that the Met Council’s power, as in many Jewish non-profits, was concentrated in the hands of few people.
The alleged deception and pilfering “should prompt institutional thinking about leadership and responsibility,” said Yehuda Kurtzer, president of the Shalom Hartman Institute of North America. “Concentrating power in these organizations becomes a setup for someone to perpetrate a fraud without a lot of people knowing about it. It’s still baffling that an agency of this size could have this happen.”
Levine, from NYU, called for increased government oversight of non-profit organizations that raise more than $300 billion across the U.S each year. Others, however, said the non-profits themselves must choose leaders and set governance policies that would prevent what happened at Met Council.
'Parallel universes' for Jewish groups
Bronznick, meanwhile, said that American Jewish organizations can be split into two groups: There are veteran organizations, like Met Council, the ADL and other groups that have been in existence for decades and are not learning needed lessons from the Rapfogel affair. Then there are upstarts in the innovation sector and among some foundations and fairly young spiritual communities, which are employing new models of shared executive leadership – or often women – at the top.
“We have parallel universes,” said Bronznick. “In a lot of these organizations where we’re seeing some of these scandals, it’s not just that it’s only men leading the organizations, but the same man who’s been in place for many years.” Their leadership, she said, “is calcified” and “a lot of these organizations are declining in power and influence.” Yet there is “a lot of resistance to change when we’ve brought up the notion that we need to see more shared leadership.”
Currently, due to retirements, there is a spate of CEO-level job openings at some of the most important organizations in the Jewish community, including at UJA-Federation of New York and the Reform movement’s Hebrew Union College-Jewish Institute of Religion due. There is also a search underway for a new executive director at the 92nd Street Y, a major cultural center on New York's Upper East Side, because leader Sol Adler was fired in July after his longtime extramarital affair with his assistant came to light.
At a time when the task leading organizations is more complex, “we keep seeing unrealistic job descriptions coming out, and it’s perfectly clear to me that nobody can really say they can take on all these responsibilities,” Bronznick said. "Yet we haven’t really explored a model of more shared leadership."
John Ruskay, CEO of the New York Jewish Federation, whose impending retirement has prompted a search for his successor, took issue with Bronznick’s assertions that the leadership of legacy organizations is in any way stagnant. Examining “issues of governance and accountability are ongoing at UJA-Federation,” he said. These issues are not new, he said, and “these discussions continue in light of the allegations” against Rapfogel.
The federation's strict governance policies helped it largely avoid taking as big a hit as other groups after the Madoff scandal, he said. “We’ve had among the highest levels of ethical avoidance of conflicts of any non-profit. We’ve been working for many, many years to strengthen board oversight.” Emphasizing that the agencies in the N.Y. federation’s network are all “independent agencies,” Ruskay said, “we’ve been working [with them] to strengthen fiscal governance.” He declined to elaborate further.
The Anti-Defamation League, headed by Abe Foxman, did not respond to multiple requests for a response.