NewsBits: The Hadassah / Madoff Relationship – What’s Still to Come?
from The New York Times:
Hadassah, the Jewish volunteer organization, knew it had invested $40 million with Bernard L. Madoff by the late 1990s. It also knew it had taken more than $130 million from its Madoff accounts and still had millions on the books when the vast Ponzi scheme was revealed in December.
What the charity says it did not know, however, was that Sheryl Weinstein, its chief financial officer when it made those investments, was having an affair with Mr. Madoff…
Indeed, the Madoff scandal raised questions in the nonprofit community about how well charities managed their investments and monitored their conflicts of interest, with some watchdog organizations saying that some groups left those decisions to small, clubby boards or influential insiders.
Hadassah has declined to identify the members of its investment advisory committee…
Ms. Weinstein’s headlines are not Hadassah’s biggest worry these days. Because it withdrew far more cash from its Madoff accounts than it contributed, it may be vulnerable to a lawsuit by the Madoff bankruptcy trustee, who is trying to recover money for those victims who put in more than they took out.
When Weinstein left Hadassah in 1997, she was paid $133,000 in salary for 10 months, $112,700 for 195 days of accrued vacation, and $300,000 in severance pay for two years, the Chronicle of Philanthropy reported in 1998. The severance came after “reaching an agreement” to leave, the paper reported, citing Laurence Seigel, Hadassah’s chief financial officer at the time.
[Hadassah’s president Nancy] Falchuk didn’t return a call seeking comment yesterday.
When Hadassah invested with Madoff, Weinstein was one of about a dozen people who sat on an investment committee, according to the person familiar with the matter. The committee included outside investment volunteers that Hadassah doesn’t disclose, the person said.