Analysis: It affects us, too

The more the news filters through from America as to the extent of the alleged Madoff swindle, the louder the sighs of unashamed relief from this side of the pond.

Phew, goes the thinking; thank heavens we're not affected. Thank goodness we haven’t entrusted our family foundation funds to the wily Mr Madoff, a man of such moral rectitude that even his own sons, poor dupes, refused to counter-sign his conditions of bail.

It puts one in mind of the late and largely unlamented Robert Maxwell, another personable arm-twister who robbed his newspaper pension funds blind, juggled his finances near to collapse and, yes, kept his own two sons in the dark.

But the scale and reach of the alleged Madoff fraud puts Maxwell in the shade. The anger with Madoff, and the impact of the already disastrous economic situation in the United States, has, say commentators, panicked people who have been reliable donors in the past.

At least one Jewish organisation — not, itself, directly affected by investments with Madoff — is said to have been told by regular donors that the cupboard is bare.

Marginal Jewish organisations are being warned to watch out: they will inevitably go to the wall. Only tightly run and focused
organisations will survive.

And lumbering, elephantine bodies such as the Jewish Agency, riddled by years of mismanagement and corruption, may well collapse because the local Jewish federations in America — many of which have been directly affected by Madoff — will have no spare cash and will devote what little money they have to domestic charities.

If the choice is between feeding people who can’t afford to eat and propping up the Agency...that is the sound of rats, deserting the sinking Agency before it finally flounders.

One thing is clear. It will be at least a year before the extent of Madoff's Ponzi scheme is fully disentangled, and in the meantime the only real beneficiaries will be the lawyers, many of whom, even now, are considering the previously unthinkable — taking legal action against the Securities and Exchange Commission for gross negligence.
In the meantime, anyone on this side of the pond still heaving sighs of relief is deluding himself. The Madoff scandal represents a seismic shift in the Jewish world. Whole funding avenues have been wiped out overnight and if the debt-ridden and poverty-stricken Jewish communities of the eastern bloc can no longer call on wealthy American Jews, their attention, and their begging bowls, will naturally turn to Europe.

This is a challenge which will not go away.

    Last updated: 2:27pm, November 8 2010