Another casualty of Bernard Madoff: The definition of “Jew”

[Jack's Gaza Update 7.5 is here.]

This is a dated topic, but the column I submitted to the Allentown Morning Call on the topic just ran today. Below is the text:

As a child, I didn’t know that the word “jew” could be used as a verb, that millions of people the world over believed that my family and I were, by dint of our ancestry, avaricious, unethical scoundrels. Instead, I was always taught that Judaism was a religion of ethics and honesty.

In school and synagogue and home, rabbis and parents inculcated in my peers and in me the biblical lesson (Deuteronomy 16:20), “Justice, justice shall you pursue.” The Talmud (Shabbat 31a) warned us that the first question a Jew will be asked in the afterworld is, “Did you engage in commerce honestly.” Jewish law (Tosefta, Chullin 2:24) demanded of us, “Distance yourself from ugly behavior, and from anything that might resemble ugly behavior.” Ethical behavior was inseparable from the laws of kosher, Shabbat and family purity.

As I entered adolescence, though, I saw people throw pennies at Jews to insult their supposed greed. I studied the Merchant of Venice and heard the Christian tale of the betrayal of Jesus, read the Protocols of the Elders of Zion and saw copies of vicious Nazi and Muslim propaganda cartoons. I was accosted by a group of teens in a Long Island Rail Road car; they informed me that “Jews buy Sprite because it’s cheap.” Even some Jews displayed this malignant view of their own ethnicity and religion; seven years ago, then-Pennsylvania gubernatorial candidate Ed Rendell, a Jew, quoted his father’s observation that “the guys who spend the longest time in synagogues on Saturdays are the biggest crooks Monday through Friday.” And so I learned that, indeed, much of the world didn’t translate “Jew” as I did.

Many Jews fight this malicious rendering of “Jew” by promoting the Torah’s ethical instructions. From The Business Ethics Center of Jerusalem to the Center for Ethics at Yeshiva University in New York to Bais haVaad l’Inyonei Mishpat in Lakewood, New Jersey, to many similar efforts, Jews devote significant time, effort and, yes, money, to sustaining righteous behavior among Jews. Particular Jewish individuals stand out for their achievements in this area as well; from philanthropists to political leaders to jurists to unheralded businessmen, there are many positive ethical role models within in the Jewish community.

But despite these efforts, every new Jew-related scandal reinforces the negative stereotype and negates the positive work of all of those institutions and individuals. Whether a Michael Milken or an Ivan Boesky, a Sholom Rubashkin or a Bernard Madoff, it seems that, every year, one or two Jews gain notoriety for their criminality and thereby reinforce in the mind of many the old message that the Jew is unethical, the Jew is self-serving, the Jew is greedy. Never mind that the behavior of one man or even a handful of people cannot possibly be brought as proof of the character of millions. Never mind that Madoff has single-handedly destroyed many, many charities which served Jewish causes. The image that remains in the eyes of the world is that this Jew bilked people out of billions of dollars.

This wound is, to me, Bernard Madoff’s deepest crime and most lasting legacy. I fear that years after the people who lost their money are gone, generations after the charitable foundations and the people they served are gone, this scandalous rendering of “Jew” will remain in the popular lexicon - and Bernard Madoff will be cited as proof.

By nature and training, I try to look for some positive result even in the midst of devastation. It’s hard to find any upbeat note in this cacophany of destruction.. but, perhaps, there will be one, small, positive result: I and others will feel all the more compelled to preach to our communities, and to teach to our children, that most basic of Jewish lessons (Leviticus 20:7): “You shall sanctify yourselves, and you shall be sanctified, for I am the Lord your God.”

You can see the column itself here; the anti-Jewish comments on it are remarkable, and underscore the damage done by Madoff.

The making of a Bernard Madoff: One possible scenario

I visit Jewish inmates at local prisons; I’m glad to say there aren’t too many, but there are some.

(Side note: I’ll never forget a lawyer who walked up to me in the meeting area, while I was waiting for my inmate to be brought down, and said, “I didn’t know Jews go to jail.” He’s lucky I was too surprised to slug him.)

I was once visiting an embezzler who had been a salesman, and had stolen his customers’ fees to support his gambling habit. He explained to me how he had fallen into doing it: In the beginning, he had been able to sign up enough new business, and win enough at the tables, to pay back the company before anything was noticed. Other salesmen and even managers knew about it, but they let it go because he was such a good salesman.

And every month that he made it through reinforced the idea that he could get away with it - in fact, that nothing was wrong.

Things started to go bad because his gambling debt climbed past his customers’ fees, but by the time he realized he couldn’t catch up, it was too late - he was in for too much, and so he needed to come up with successively more criminal strategies to cover up the theft. (Yes, this is what we call aveirah goreret aveirah - one sin drags in another.)

He could never bring himself to stop believing that the next day would bring salvation, that the next gamble would win back everything he had lost, and so he never came clean - until he was arrested.

I wouldn’t know Bernard Madoff from anyone, and every person has his own motivations and complexities, but I can easily envision his scheme starting in much the same way, even without a gambling habit: Investments one quarter don’t meet the expected returns, and he worries about his record and his appeal for new clients - so he takes some of the new money coming in, and uses it to inflate the portfolios of existing clients. It's more about reputation than building wealth.

Madoff develops a great reputation for successful investment, everyone wants in, so he needs to keep the reputation up, needs to provide great returns. It’s easy, just take the incoming money and spread it among other portfolios, all the while pretending that the new portfolios are also doing well. Works like a charm, so long as more new money is coming in than you need to spread around the old accounts.

And every quarter that he makes it through reinforces the idea that he can get away with it - in fact, that nothing is wrong.

Once things turn, though, you’re toast, and it doesn’t take long - maybe one quarter, maybe two - before you’re in too deep to ever climb out. Until, like my inmate friend, you are arrested.

I don’t see a “moral of the story” from the investors’ loss - they all invested in a fund with a great reputation, which had been entirely okayed by the SEC. You can't say, "They should have known it was too good to be true" - that's nonsense, they could not have known.

But I do see a moral in Madoff’s story: Don’t start down an unethical path, because, sooner, or later, you end up on the front page for all the wrong reasons, and you’ll bring down a whole lot of innocent people with you.