Monday, December 29, 2008

A Few Observations on Madoff

1. Everyone knew something was fishy with his fund, including the people who got burned. After all, his amazing results were totally unreproducible by anyone else who tried to implement his so-called investment strategy. Investors assumed that he was making his profits by ripping off the non-Jews (e.g., drugs, prostitution), never dreaming that he was ripping off other members of the Tribe. As my father of blessed memory used to say, "Never do business with dishonest people."

2. I asked the head of a well-known Jerusalem institution of Jewish learning whether his organization had invested money with Madoff. "No way," he responded in shock. "Our bylaws would never allow us to invest in such a fund." So, before you mail out your Yom Kippur charitable contributions this year, ask what sorts of regulations the institution has to control where the money is invested.

3. A friend asked me, "Is this Madoff guy frum (loose translation: an Orthodox Jew)?" I responded, "Unless they've removed 'Thou shalt not steal' from the Ten Commandments, obviously not ." When defining whether someone is part of the Torah-observant community, we all too often look at the external trappings (e.g., Sabbath observance, eating kosher), and give people a free pass on moral or interpersonal transgressions. We're amazed that an observant, kosher-eating, Sabbath-keeping Jew could steal, but we never for a moment consider stripping him of the title "observant". This too is an aberration that provides fertile ground for Madoffs to flourish.

4. I want to conclude with something nice about Madoff, based on the Talmud. "Rabbi Abahu said in the name of Rabbi Lazar: We must be grateful to the cheaters among those who collect charity. Were it not for those cheaters, then each time a beggar asked a man for a donation, and the man refused to give, then that man would immediately be liable to punishment." (Jerusalem Talmud, Pe'ah 8:9).
אמר רבי אבהו אמר רבי לעזר: צריכין אנו להחזיק טובה לרמאין שבהן, שאילולא הרמאין שבהן היה אחד מהן תובע צדקה מן האדם ולא נותן לו מיד היה נענש. (ירושלמי פאה, פרק ח, הלכה ט)
I'd say that Madoff has given a free pass for years to come to anyone who refuses to donate to Jewish charities.


  1. My father the CPA was very angry when I announced I was becoming religious:
    "My daughter's not going to be a ganiff!"

    He explained that when he worked for NYS checking businesses, there were crooked things in the frum Jews' businesses. So I promised that keeping kashrut and Shabbat wouldn't stop me from being honest.