Madoff Enabler Resigns From Synagogue Board Moments Before He Would Have Become Chairman

J. Ezra Merkin bows out, somewhat gracefully.

Financier in Madoff Case Quits Synagogue Position
By PAUL VITELLO, NY Times

J. Ezra Merkin, the financier who entrusted sizable portions of his friends’ and investors’ money to what turned out to be Bernard L. Madoff’s Ponzi scheme, stepped down Wednesday night as an officer of the Fifth Avenue Synagogue, a wealthy congregation founded 50 years ago by his father, and whose members included some of Mr. Merkin’s largest individual investment-losers.

Mr. Merkin disclosed his unexpected decision in a speech at the synagogue’s annual membership meeting, in which he declined the nomination to become chairman of the synagogue’s board of trustees. Ordinarily he would have assumed the chairmanship by custom, as the outgoing synagogue president.

“He said he had decided that he needed to focus on a number of events in his life, and that to best serve the community and his family, he would decline the nomination,” said Rabbi Yaakov Kermaier, the congregation’s chief rabbi. The approximately 100 members present, from a total membership of about 300 families, “warmly applauded” Mr. Merkin’s speech, the rabbi said.

Leaving the meeting Wednesday night, one member who declined to give his name said “there was a lot of relief” about Mr. Merkin’s decision. He said that in the weeks preceding the annual meeting, the general expectation that Mr. Merkin would take the largely honorific post of chairman had made for “a stressful period” for many members of the synagogue. By some accounts, the congregation as a group lost more than $1 billion in the collapse of Mr. Madoff’s scheme.

Jonathan D. Sarna, a professor of Jewish history at Brandeis University who is acquainted with several members of the Fifth Avenue Synagogue, on the Upper East Side of Manhattan, described the synagogue as “probably the wealthiest Orthodox congregation in the world.”

Among its well-known billionaire members, not all of whom invested with Mr. Madoff through Mr. Merkin, are Ronald O. Perelman, the financier and corporate raider; Ira Rennert, who made a fortune in junk bonds and the Hummer; and Mort Zuckerman, the real estate magnate who owns The New York Daily News.

Mr. Merkin acted as the intermediary to Mr. Madoff for another temple member, Elie Wiesel, the Nobel Peace Prize winner, who lost much of his personal wealth and the endowment of the Elie Wiesel Foundation for Humanity as a result.

Mr. Merkin also lost large sums in Mr. Madoff’s scheme, and Mr. Sarna said there was a deep ambivalence toward him, “a feeling that he had done a lot of good for the temple over the years,” mixed with resentment over the Madoff disaster.

New York Attorney General Andrew M. Cuomo has charged Mr. Merkin in a civil suit with misleading investors by taking $470 million in management fees while turning their money over to Mr. Madoff.

Rabbi Kermaier would not say if there were investors among the members who attended Wednesday night’s meeting. But he said that most “have not been interested in castigating or criticizing.”

He acknowledged that there were some who were angry.

As for his own remarks to the group, Rabbi Kermaier said, “I tried to convey the view that hopefully we will all be able to take a few steps back and see this through the lens of a long history of communal service” by Mr. Merkin and his family.

Comments

[Dr. dave]

Mr. Merkin, however, remains on the board of Anshei Bnei Ponzi and may join the Young Israel of Riker's Island.

[Hometown Postville]

Dr. Dave-"Mr. Merkin, however, remains on the board of Anshei Bnei Ponzi and may join the Young Israel of Riker's Island." Shades of SMR! Not directly involved, but still lurking around the corner.

[Nachum]

I think they applauded because they were happy he was going.

[Mort Goodrich]

New York Attorney General Andrew M. Cuomo has charged Mr. Merkin in a civil suit with misleading investors by taking $470 million in management fees while turning their money over to Mr. Madoff.
Investors having entrusted their fortunes with money men, investment gurus such as Merkin with access to Madoff had no idea how,where their money was being placed being only too happy to cash the profitable stream of checks it produced, of which Merkin charged upwards of 20% in consultant fees for.

What is most troubling,ironic, galling to those who had so belatedly discovered where Merkin had invested their money was that Madoff did not in fact charge anyone with consultant fees, Merkin as investor did not pay a penny to Madoff for the monies provided, the understanding of which Madoff would make money only on the trading transaction charges generated from the companies he owned.

Can you imagine how you'd feel having invested all your considerable money, discovering to your horror you were part of that Ponzi-scheming swindler you've heard about on TV and finally learning Madoff not having not charged Merkin a penny for what you were paying 20% for? The pressure on the Attorney General to take action must have been inmmense.