William E. Rapfogel stole at least $9 million from poor and homeless Jews, and destroyed the New York City Jewish Community's anti-poverty arm in the process. But did New York State Attorney General Eric Schneiderman give Rapfogel a much better plea deal than he deserved? And Why wasn't the Met Council's board summarily forced out by Schneiderman – a step he has taken with other nonprofits which did far less wrong than the Met Council? An expert on nonprofits says Schneiderman was wrong and explains what that unwarranted kid glove treatment will likely mean for other nonprofits.
Above: William E. Rapfogel's perp walk
Rick Cohen writes in the Nonprofit Quarterly about the questionable plea deal given to former Metropolitan Council on Jewish Poverty CEO William E. Rapfogel.
The Modern Orthodox Rapfogel joined with a haredi fellow Met Council employee and the Met Council's Breslov hasidic insurance agent (among others) to loot the New York City Jewish community's anti-poverty nonprofit of at least $9 million.
That's right, slick Willie Rapfogel stole $9 million from poor and homeless Jews.
But as City and State New York reported earlier this week, that didn't stop dozens of top Jewish community leaders, including 19 rabbis, from asking New York State Attorney General Eric Schneiderman to easy on Rapfogel.
Rapfogel's wife was at the time the chief of staff of the New York State Assembly's speaker, the Modern Orthodox Sheldon Silver – a close pal of Willie Rapfogel. Silver has since been forced to step down from his role as speaker after the US Department of Justice indicted him for an unrelated fraud scheme.
His relationship with Silver and his wife's job in Silver's office made Willie Rapfogel among the most politically well-connected people in New York State.
And now the Nonprofit Quarterly explains what this all means for nonprofits in the state, and points out some key facts about Schneiderman's kid glove treatment of Willie Rapfogel:
… [New York State Attorney General Eric] Schneiderman didn’t agree to an interview with [City and State New York's investigative reporter Wayne] Barrett and prevented the attorney on the Rapfogel case from doing so as well. His office responded to some written questions, but didn’t respond to additional questions Barrett sent after reading the first set of answers. Despite the contention of Rapfogel’s attorneys that the nonprofit miscreant had been sentenced harshly even with the plea deal, it doesn’t come across that way in Barrett’s analysis.
In addition, one part of the plea deal required a payment of $3 million from Rapfogel to the Met Council as restitution. Instead, Rapfogel’s supporters put money into a fund, paying a substantial portion of the amount and in the process protecting his personal assets, which included a valuable Grand Street co-op and a home in upstate Monticello, or other properties, including the home that Rapfogel’s son purchased with stolen Met Council resources. Schneiderman’s office seemed unable to explain to Barrett how much of the restitution came from Rapfogel personally and how much from the fund, and it may be that the attorney general’s office doesn’t even know who contributed or how much. Even though one Schneiderman press aide told Barrett that Rapfogel, even after being caught red-handed, refused to cooperate with the AG’s investigation, Rapfogel still got a plea deal that allowed him and his family to retain much if not most of the booty.
What does Barrett’s article about the Rapfogel sentence teach us about this unfortunate episode of nonprofit corruption?
First, Rapfogel’s connections to powerful political actors like Sheldon Silver, even if just as corrupt with the public purse as Rapfogel was with the nonprofit’s resources, are a difficult shield to pierce.
Second, if over two decades Rapfogel was plundering his anti-poverty nonprofit, some members of the board had to have been culpable, either through sleeping at the switch or turning a blind eye to Rapfogel’s actions. Schneiderman has dismissed entire boards for nonprofit misbehavior that doesn’t measure up to that of Rapfogel and the Met Council. The big-name Met Council board should have been tossed out on its collective ear but wasn’t, perhaps because they, too, are connected to the politically powerful.
Third, the shocking defenses and apologies for Rapfogel came with nary a word about what his actions meant for the poor New Yorkers the Met Council was supposed to serve. In toto, the letters add up to the writers’ much higher concern for poor Rapfogel than for poor New York Jews.
And fourth, for the letter writers who so blindly overlooked or minimized the extent and damage of Rapfogel’s thievery, their participation in the Rapfogel letter-writing festival has to lead the public to cast a wary eye about the nonprofits and foundations they themselves run. What kind of due diligence are they doing on the organizations their charities fund or partner with? Or is it that they are more concerned with social and religious connections and political power, without giving two shakes about the probity of the nonprofits?
Dozens Of Jewish Leaders, Including At least 19 Rabbis, Pleaded To Get William E. Rapfogel A Sweetheart Deal In $9 Million Theft From Jewish Poor.
The Complete List Of Jewish Communal Leaders Who Asked AG For Leniency For Man Who Stole Millions From Poor Jews.