One Jewish charity CEO hid allegedly stolen cash in his
apartment closet. Another had an affair with his assistant while the
assistant’s son-in-law stole from the CEO’s organization. A third covered up
sex abuse charges for decades.
Scandal after scandal has hit New York’s top Jewish
charities this year. Experts blame lax oversight, saying that the multi-decade
leadership tenures common among Jewish charity CEOs have corroded governance at
some of the Jewish community’s largest not-for-profits.
The four major Jewish charity scandals over the past 10
months come just five years after some of the same organizations lost a fortune
in Bernard Madoff’s Ponzi scheme.
“It has definitely shaken a lot of people’s confidence,”
said Rabbi David Teutsch, who heads the Center for Jewish Ethics at the
Reconstructionist Rabbinical College, referring to the repeated blasts of bad
news. “The response clearly needs to be greater controls and better training.”
Two-decade terms are common for the men who run the nation’s
largest Jewish organizations. Wealthy families hold seats on multiple boards of
trustees. Several professionals who specialize in Jewish charity management
told the Forward that fixes exist for the governance problems facing the Jewish
not-for-profit sector, but they require structural changes. Executive suites
need to turn over faster, the experts said. Trustees need to be better trained,
and to be selected with an eye toward oversight skills, not just deep pockets.
Those interviewed were careful to state that most Jewish
charities are well managed. But they said that governance improvements are
important even without an apparent problem.
The worst year for Jewish charities since the Madoff debacle
in 2008 started in late December 2012, when the Forward reported that Yeshiva
University’s longtime former president Rabbi Norman Lamm had admitted to
covering up allegations of sex abuse of high school students from the 1970s
through the ’90s. Alleged victims soon filed a $380 million lawsuit against the
school.
Then, in May, the Forward reported that top officials at the
Conference of Jewish Material Claims Against Germany, which distributes aid to
Holocaust victims, had been warned of fraud being perpetrated by employees
eight years before a full investigation uncovered a multi-million dollar scam.
Things got even darker over the summer. In July, the 92nd
Street Y fired its executive director, Sol Adler, after learning of Adler’s
affair with his assistant, Catherine Marto. His affair, though embarrassing,
wasn’t the worst of it. Marto’s son-in-law was the Y’s head of facilities, and
was accused of taking kickbacks from vendors on construction projects. The Y
shouldn’t have been surprised: He had pleaded guilty in 1999 in a Mafia-backed
Wall Street fraud.
All those scandals were just a warm-up for the firing in
August of William Rapfogel, CEO of the Metropolitan Council on Jewish Poverty
and one of the largest figures on the New York Jewish not-for-profit scene.
Rapfogel was charged in September with stealing $5 million from Met Council in
a two-decade kickback scheme. His predecessor at Met Council, Rabbi Dovid Cohen,
resigned in September from his current job running the Jewish ambulance service
Hatzolah.
These weren’t the first embarrassing scandals in recent
memory for Y.U. or for Met Council, both of which lost donor money in the 2008
Madoff fraud. Madoff was chairman of the board of Y.U.’s business school and a
former treasurer of the university; J. Ezra Merkin, who managed funds that
secretly fed millions into Madoff’s Ponzi scheme, was on Y.U.’s investment
committee.
That Merkin was on the board committee charged with overseeing the
university’s investments didn’t keep Y.U. from investing in his fund, a
conflict that received heavy criticism after the Madoff fraud was revealed.
Y.U. lost $105 million invested with Madoff through Merkin.
Met Council lost an account invested with Madoff through
Merkin with a purported value of $1.4 million.
By Josh Nathan-Kazis - Read moreat:
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