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What ethical lessons can be learned from the Bernie Madoff scandal?


Scandal? What scandal? I have been trying so hard to be non-judgmental, tolerant of people's opinions when they differ from mine. Bernie allegedly made off with $50 billion, and everyone is morally outraged and shamelessly calls it a scandal (I remember when being 24 and single was a scandal), and Bernie is called a goniff.

So what are the rules? We must be tolerant of sin but not crime? We should tolerate cheating in marriage but not in hedge funds?

Let's assume there are real scandals and unacceptable behavior that we must condemn or lose our moral soul. Yet, what should we think of the person who commits these acts?

First, enlarge the problem from person to people to the human condition. My grandfather would say, in Yiddish, "A mensch is a foolish creature." Humans are flawed, weak and corruptible, not just this one guy. Second, find the same failing in yourself; I may never lie to a grand jury, but lying is lying.

In short, we must remember to be more intolerant of our own faults than of the failings of others.

Rabbi Manis Friedman

Bais Chana Institute of Jewish Studies

St. Paul, MN

Modern Orthodox

For the most part, the tempest of breast beating in the Jewish community over the Bernie Madoff swindle is not called for.

The investors were neither reckless nor greedy. Madoff exploited friendship networks and country club connections, presenting himself as a conservative investor and involved Jewish philanthropist living a respectable family life. What Madoff did was dastardly and ruinous; thousands will be deprived of needed help. If guilty, he should go to jail and be disgraced. But his victims should not be blamed, nor should they blame themselves. He exploited the best values of the Jewish people to get away with a swindle. But what is the lesson? Not to trust Jewish philanthropists? Not to admire people who are involved in charity work lest they be crooks?

Historically, Jews were taught that any action by any Jew reflects on all Jews--and on God. Marginalized anti-Semites have blamed Madoff on the Jews; mainstream America has not. The Jewish community has traditionally sought to be responsible for its needy and to condemn wrong behavior by Jews to protect themselves from backlash.

Jews should continue to practice their best values--and condemn the Bernie Madoffs of this world. In this case the Jewish community should not feel guilt!

Rabbi Yitz Greenberg

New York, NY


When innocent people are harmed as a result of the selfish ambition of those whom they trust, the outcome is always scandalous and tragic. However, when such abuse of good faith involves intentionally placing the assets of nascent charitable institutions in serious jeopardy, it seems no exaggeration to label it reprehensible.

In this regard it is irrelevant whether the perpetrators of corruption were Jewish or non-Jewish. Although as Jews we are indeed expected to hold ourselves to a higher moral standard than the rest of the world, the fact remains that trespasses against justice are offenses directed against the very fabric of civilization. Their significance transcends divisions of religion, race or ethnicity. The sanctity of society is desecrated whenever anyone--Jew or Gentile--exploits his or her fellows for personal gain; and the more egregious the transgression, the more vulnerable the unsuspecting victims, the more painful and destructive the consequences, the more profound is the damage thus inflicted upon the moral fiber of our communities.

Rabbi Joseph Maroof

Magen David Sephardic Congregation

Rockville, MD


The Madoff case is particularly painful to the Jewish community because Madoff allegedly used networks of friendship, landsmanschaft and communal service, and the trust those relationships foster, to recruit victims for his scheme. That Judaism eschews falsehood in financial dealings is a foundation of our tradition, grounded in the aspiration toward sanctifying the mundane. The Talmud and Midrash equate the Torah's injunction against "placing a stumbling block before the blind" with providing bad advice to unsuspecting individuals in business affairs.

Rather than take the attitude of caveat emptor, let the buyer beware, Jewish tradition reinforces the ethical obligations of parties to a business transaction. Yet, beware we must.

There is a Jewish principle that those in a position of public trust must take extra precautions to remain above suspicion. For example, one who collects tzedekah should not make change for himself from the collection lest someone think he is stealing. Although we can never fully inoculate ourselves against thieves or those who merely fail to live up to their duties, by taking that extra level of caution, we can help build and maintain the trust that our community places in us.

Rabbi Julie Schonfeld

Director of Rabbinic Development

The Rabbinical Assembly

New York, NY


Remember the cold mornings of January '09? Remember the grating of hope and enthusiasm for renewal and change against the disturbingly familiar: war in Gaza, economic meltdown and, as if things were not bad enough, those Jewish names that riddled the news: old names, like Marc Rich; newer names, like Bernard Madoff? Remember slurs involving "Jewish bankers" and "Jewish control" of financial systems that mushroomed in the blogosphere and news sites?

Greed and deceit are not Jewish issues. They are human failings and civic-political challenges that demand civic attention. Yet, the emphasis on the Jewish identities and affiliations of alleged and convicted fraudsters invite an association between the wrongdoer and other Jews. It feeds the insinuation that Jews play by different, hidden rules. It undermines both the credibility of Jews as citizens and of the polity they are believed to exploit.

Guilt by association is not just embarrassing--it's unfair. The Talmudic discussion of the phrase "kol yisrael arevim zeh ba-zeh" ("all Israel are liable for each other") highlights the injustice inherent in collective punishment. Why should innocent Jews suffer for another's offense if they could not prevent it? Our conscience tells us we should not and that guilt by association and collective punishment are not just unfair to Jews. They are unfair to everybody.

Jonathan Cohen

Director, Hebrew Union College--University of Cincinnati Ethics Center

Cincinnati, OH


Memo for a new economic paradigm, rooted in Jewish values, to be called "against excess:"

1. Say goodbye to jingoism. Too many Jews trusted blindly in one of us. Stop assuming that Members of Our Tribe don't bilk or cheat (or drink, abuse or do stupid, mean things); stop assuming that others do. We're all in it together.

2. Face it: We're all chumps in one big Ponzi scheme called our economy. Markets won't really grow indefinitely; today's upper-class standard of living is not sustainable across the board. Think l'dor v'dor, from generation to generation, not from quarterly earnings report to earnings report.

3. Refocus on what really matters: connection, not convenience; menschlekheit, not mastery; prophets, not profits; the whole, not the part. Idolatry can be defined as worshipping partial truths, like "get ahead." Madoff's worst sins, and ours, start here.

4. Long ago, fresh from a month's retreat at an idyllic institute, my first stop in civilization was a throbbing mega-mall in Los Angeles; it felt like the end of the world. Less is more.

So: Bummed investors, or folks who just want to live more lightly on this good earth, remember two great Jewish teachings: dayeinu--what we already have is enough for us. And Ben Zoma's redefinition in the Mishnah (Avot 4:1) of "Who is rich? Whoever is content with their lot."

Rabbi Fred Sherlinder Dodd

Adat Shalom Reconstructionist


Bethesda, MD


Hasidic teachings instruct that before an aliyah (ascent) there is a yeridah (descent) in behavior and in consciousness. Ascending requires a tikkun (repair or restoration). Who would argue that the financial scandals have taken us to the bottom? The Talmud states that when we are judged in the next world the first question will be: "Nasata v'natata b'emunah (Were you faithful and honest in business?)" Using that which is entrusted to you for harm is nezik (damage), and restitution and a guilt offering are required.

If the damage is so large that restitution is impossible, the Talmudic principle of liability tells us that the offender must do t'shuvah and turn the offense into good deeds. We must have an open mind for this principle to work. In the '60s, when I saw no moral gray, I challenged a distinguished rabbi who had accepted a large donation to build a Jewish education institution from a former colleague of Al Capone. I argued that it was dirty money. The rabbi asked, "How do you know that this isn't a part of his t'shuvah?"

Rabbi Victor Gross

Co-rabbi of Pardes Levavot

Boulder, CO


Because of the high intimacy in the Jewish world, it takes far less than "six degrees of separation" to establish links to people or organizations that were directly affected by Bernard Madoff's alleged Ponzi scheme.

But let's make something very clear. We don't own this scandal. This was not a Jew-on-Jew crime. Although many of Madoff's victims are Jewish, their being Jewish and his being Jewish are beside the point. This was, it seems, purely a devious and malevolent financial fraud that violated laws, ethics and an assumption of trust. It does not merit a special condemnation or apology from the Jewish community. It does require swift prosecution and assessment of what kinds of oversight were lacking and are needed to prevent this crime from re-occurring.

I find it distasteful that so many Jews customarily breathe a sigh of relief when a convicted criminal turns out not to be Jewish. We anxiously unleash a destructive form of ethnic typing on ourselves.

Instead, let us focus on our ability to reach out to those who have become impoverished. We can draw a valuable lesson from how we have faced adversity in the past with remarkable resilience and renewal of optimism.

Rabbi Peter Schweitzer

The City Congregation

for Humanistic Judaism

New York, NY


Business ethics has been a consistent theme in our people's lives. Deuteronomy emphasizes the need for "just weights," and the Talmud devotes an entire tractate to just business practices. Unfortunately these visions are either unknown or blatantly ignored by unscrupulous individuals who identify themselves as part of our Jewish heritage. Some offer atonement by making large gifts to Jewish philanthropic institutions, such as Ivan Boesky's generous donation to the Jewish Theological Seminary of America. I was troubled by the acceptance of the gift because it appeared to violate Deuteronomy, which forbids us to use "the wages of a prostitute or the hiring of a dog for the Temple service." The opposite occurred with Bernard Madoff inasmuch as he purportedly bankrupted numerous Jewish philanthropic institutions. Atonement offerings have always prescribed an admission of guilt as a prerequisite for the gift to be accepted. A sociopath invariably is incapable of admitting guilt with any degree of sincerity.

The Jewish community should be shocked and indignant if justice is not attained in relation to such individuals. Incarceration is not punitive but rather preventative. There is no alternative way of ensuring that the sociopathic character disorder does not increase the number of victims targeted. How ironic that Madoff's injustice should have devastated so many institutions that exist to perform acts of tzedaka, i.e., justice.

Rabbi Harold White

Senior Jewish Chaplain

Georgetown University, Washington, DC
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Title Annotation:ASK THE RABBIS
Date:Mar 1, 2009
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