Greed is not something the Jews invented, although many bigots think so. Greed is something indigenous to human beings, and some lesser animals. CNN ran a report on its website about a 640 lb man who traveled to N. China in order to attend a weight-loss clinic. By the time the cameras showed up he only weighed 400 lbs. His goal was 280.
He was so fat, he told the interviewer, that he was fired from his job, mainly because he couldn’t move to do anything at work. So he spent the next twelve years on the couch just getting fatter and fatter. He was so fat at one point that he needed a tracheotomy because the fat around his neck was so heavy it was choking him.
What was the bottom line, eat less do more exercise. But mainly, change the way you eat.
In our society greed is frowned upon in public and relished in private. How often do we hear ‘you never have enough.’ You never hear, ‘that’s enough.’ Given the recent financial meltdown many people found that enough was no longer viable, and compromises needed to be reached. Those who had large fortunes and lost half, still had the remaining half for consolation.
But then there’s the morality of it all. Rabbi Shmuel Boteach, writing in the Jerusalem Post, questioned the values of a society where success was judged by how large a gold watch, or diamond necklace or Mercedes a person had, not if there was any value to the person’s life other than material greed.
One of the precepts of Judaism is charity. Tzdeka. None of us give enough, either money or time, to worthwhile causes. A few people give more than they can afford of both, and are considered ‘friars’ ‘fools’ or worse.
Medoff recruited many investors from the posh Palm Beach Country Club, where he was a member. One of the clubs by-laws requires each member to give hefty charitable donations with a minimum in the six-figure category. The club believes in enforcing "Tzedeka" charity, a lynch pin of Jewish life.
The scale of the Medoff Ponzi scheme was so enormous that one pundit said, ‘Yeah, I remember when I was a kid they taught us, if you’re gonna steal, steal big.’ Medoff took big to mean enormous. The $50 Billion that he claims he stole from his investors could be used to bail out GM, Ford, and Chrysler combined.
The Jewish world is buzzing with the Medoff scandal. An estimated $1.5 Billion has evaporated from Jewish coffers. The victims' list still grows, but already includes foundations that invested their money with Medoff. Steven Spielberg, Jeffrey Katzenberg, Eli Weisel, Senator Lautenberg, the Technion, The Jewish Federation of Los Angeles, The Jewish Federation of Washington, The American Friends of Yad Sarah, Ramaz, Israeli insurance companies like Phoenix and Harel, Clal, the Chais Family Foundation, and others, were hit hard, some wiped out.
Many of these investors didn't even know they were investing with Medoff. It was their own financial advisers and investment houses that put the money with Medoff's well-known firm. "I don't know anyone who knew Medoff," said John Fischel, CEO of the LA Federation.
Chais lost over $150 million, and that meant no more $12.5 million a year in charity. While the UJC claims it wasn’t exposed to Medoff’s scam, the fear is that many of the UJC’s contributors were hit.
“This will be something that we won’t get over for a long time,” said Avraham Infeld, who as CEO of the Chais Foundation, closed the doors when Medoff made his statement.
An 86-year old steel magnate from the Midwest saw his entire life’s work evaporate. He had his entire portfolio with Medoff.
At one point, according to reports, having money with Medoff was a status symbol. He so consistently returned money on the investments that giving him your hard-earned cash was a sure thing. Not many people questioned the sure thing. They were happy to receive their money. Until of course, they didn’t.
These are shocking times. One wakes up thinking the sun is shining only to discover the light if from the burning curtains, and a fire that’s already spread to the carpet. Who could have known that the regulators made such serious blunders with the ‘derivities’ and the ‘sub-prime’ loans? Who could have figured that the esteemed Alan Greenspan would have made such huge miscalculations of the character of those in charge of finance. But he did.
Now the news is filled with stories of how the regulators started noticing Medoff’s practices as far back as 1999, but nothing was done about it. When underlings pointed out to their bosses at the SEC that something stunk with Medoff, they were shushed, or fired.
A few investors steered clear of Medoff. One said that trusting all that money to a company that didn’t have a proper audit wasn’t smart. Medoff used one small accounting firm in Manhattan for his audits. However, even the SEC, who looked over his operation a few years ago, found nothing untoward. A French bank reported today that it had looked into Medoff's operation and found it so suspicious that Medoff's firm was blacklisted in that bank. But the blacklist was never shared with other banks, as is the rule in the world of private banking.
One investor who lost millions said Medoff was scrupulous in sending statements and reports, sometimes listing as many as forty trades in a month. Trades which were all fictitious.
Yet the man could live on Park Avenue, chum with the jet-set in Palm Beach, and have a three-story office complex in mid-town Manhattan. Those who raised an eyebrow were battered down.
One of the people working on his 17th floor office, where the hedge fund’s trades were made, was certain that another office had to be handling the volume of transactions, since they weren’t that busy on the 17th floor. According to a report in the International Herald Tribune, even people within the inner sanctum assumed the trades were made in Europe. At least that's what Medoff told them. Or that he had another office. That other office hasn’t been found, yet. Neither has the money. Medoff claims he made off with $50 Billion, but investigators only came up with losses, so far, of $20 Billion. That leaves a lot of money unaccounted for. Nor is it clear, yet, exactly how he operated his scheme, or what’s left in the till.
Medoff grew up poor in Queens, worked his way through law school, according to the legend, and started an investment firm using $5,000 he’d saved working as a lifeguard. He went on to become an adviser on economics to the US government, head of the Business School at Yeshiva University, and their treasurer. Along the way he started NASDQ. One has to wonder, in view of the stock market meltdown, if NASDQ isn’t part of the Ponzi scheme as well.
While the goal of American life seems to be how much money one can accumulate as quickly as possible, the blatant materialism has created problems for the US society. Following the lax attention regulators paid to the sub-prime derivatives, and now to Medoff, one British financier told the BBC that he was certain that the European investors would now shy away from putting their money in the US.
How deep will this problem go? In the Jewish world the problems are enormous. Birthright, the Jewish Agency, the UJC, the various Federations, hospitals, day schools, and other noble causes, will all suffer.
The Jewish community is beginning to flutter with anxiety over a rise in anti-Semitism. How long, asked one columnist, before the world begins to connect the dots, and sees all the Jewish people involved in the meltdown. Medoff only draws this picture in sharp relief.
The confusing part, of course, is the Jewish people who are behind the meltdown and the swindles, are also the same Jewish people who are losing their fortunes, their jobs, and businesses. It reminded one observer of the quandary the anti-Semites had during the Chicago 7 conspiracy trials back in 1969 when the Jewish radical Abby Hoffman sat chained and gagged in the defense chair while Judge Julius Hoffman, a seventy-four-year-old former law partner of then Chicago Mayor Richard J. Daley, ruled from the bench. Two Jews, two Hoffmans, opposite side of the bench.
Where are the good guys these days, asked Rabbi Boteach. Where are the folks who want to be teachers, social workers, Rabbis. To that one could add, Doctors, and other health-care professionals, people who do ‘tikun olam’ rather than try to see how fat they can become.
Of course in today’s trendy world, the swindlers like Medoff aren’t obvious. He wouldn’t think of putting on 640 lbs. He probably worked out in the gym, stayed trim, had his hair styled, drove the right car, lived in the right condo, ate in the right restaurants, and belonged to the right clubs.
All of this, the gold watches, the diamonds, the prestigious address, all a blind for the scam he’d been pulling apparently for decades. Medoff was the very symbol of success in America, but at the same time, a symbol for what was wrong with America, except no one realized it.
The light in this dark tunnel came from Medoff’s own family. According to press reports, Medoff confessed his Ponzi scheme to his sons. One of them called an attorney, who called the Securities and Exchange Commission, who sent out investigators, and the FBI. So in the end it was Medoff's own son, who reportedly lost a huge sum of money in the scam, who turned him in. Let the bigots try to figure that one out.
What seems obvious from both Medoff and the 'Meltdown' is that a reevaluation is necessary in the way business is done in the USA. The form of capitalism that has developed seems to have ignored some of the fundamental principals of compassion, humility, and guilt. Medoff seems to have been a mongoose, dodging around as the lazy king cobra, in the form of federal regulators and regulations.
No revolution is needed to correct the ills of America. Just some more stringent application, and perhaps revisions, in the laws. Everything seems to be on the books, its just that the glitter of all that gold and diamonds blinded the vision of the regulators. As others have said, most people can’t be trusted to regulate themselves. Some of these people seem too enamored with their own abilities, their own success, their own accomplishments to look too deeply into the source of their income.
A crook can easily convince himself he’s not stealing, just redistributing wealth. Like Robin Hood. But he’s still a crook. And the USA is, thank the Lord, not a vicious cruel kingdom ruled by villains suppressing the poor.
Greed was all it was. Pure and simple. And a confused moral compass. Has the push for wealth at nearly any cost obfuscated the truth? Has the manifest destiny so long part of America’s dream been lost?
Without holding people like the regulators, the ruthless tycoons, and the unscrupulous Medoff to task, it may well be.
From all accounts even if Medoff considered himself to be Robin Hood, in the end he only wound up hurting a lot of people, taking away from the very charities and worthy causes he supported, and worse, screwing so many people along the way that now Jewish charities are going to be hard put to stay afloat.
One commentator called it a triple whammy, the meltdown, Medoff, and now the recession.
Luckily for Medoff he can only be blamed for $50 Billion worth. But for the Jewish community, that may have a devastating impact that could well last far longer than the meltdown or the recession.
In this case the king cobra actually got the mongoose while the little critter was pinned down by his own brood.
