As international attention pivots to scandalous, junk-status Yeshiva University, UD wants to acknowledge those people – like Andrew Sole – whose concern for the institution as a university rather than a tit for hedgies on the board of trustees prompted them to act on behalf of YU. She wants to acknowledge the three faculty members who, in 2012, wrote an anonymous letter to the campus newspaper (anonymity being required in the corrupt setting of this rapidly dissolving university) voicing their despair at the baffling failure of the university’s endowment — baffling because the cronies on the board of trustees who were high-risk-betting all of the university’s money away were far too arrogant to tell anyone about it. Why weren’t there conflict rules? Why wasn’t someone supervising the trustees and the money managers? Does it bother anyone that, with the exception of storied Yeshiva trustees Bernard Madoff and Ezra Merkin, pretty much the same people whose staggering financial irresponsibility destroyed the school are still on the board?
There’s a pathos, two years later, to reading these faculty members trying to figure out what’s going on:
No one is speaking about what caused the terrible drain on the endowment and when it will stop. In short, there is no transparency… Yeshiva needs to figure out why the endowment is performing so much poorer than the endowment of every other comparable institution in the nation and fix that problem. We do not know what the problem is or how to fix it – but we see that no one else is discussing what really is the problem, in part because of the utter lack of transparency in YU’s finances.
Well, that’s over. Now the whole world is watching as the story of how a school destroys itself through greed, secrecy, and cronyism, plays out in the national and international press. As the Yeshiva University story escalates, this blog will continue to note the people who warned the school that it was killing itself.
UD is quoted in today’s Bloomberg News on the Yeshiva University disaster.
This just in.
As I’ve said repeatedly on this blog, Yeshiva University’s financial collapse was not the work of a day. (Go here for background.) It took a special mix of trustees Bernard Madoff and Ezra Merkin, decades of indifference to the sexual abuse of students, and, more recently, a useless, self-righteous, and highly compensated president, to kill the school. Yeshiva’s board of trustees remains dominated by outstanding moral specimens like Zygmunt Wilf (“the judge decided that the Wilfs showed ‘bad faith and evil motive’ in a case she said was unlike any she had ever seen in New Jersey.“). Wilf and his fellow trustees have been so riddled with conflict of interest that the board seems to have been little more than “an investment club.”
How much lower can Yeshiva go?
Yeshiva, UD feels confident, is capable of falling much farther. Indeed, she anticipates that the school will have to close.
… If UD can alter that song a bit… Not that it’s surprising, in a new news sort of way, that Yeshiva’s current president long knew and did nothing about sex abuse allegations at that university’s high school.
[I]nternal documents obtained by the [Jewish Daily] Forward indicate that, in fact, [Richard] Joel, who arrived at Y.U. in 2003, was told both before and after he became president about allegations against Rabbi George Finkelstein, the former principal of a Y.U. high school — and that he declined to intervene in the first instance or respond in the second… “I spoke with [a former student making a charge against the school’s principal] a bit,” Joel explained in a 2004 email to a colleague, describing a complaint … made to him years before he took up his post at Y.U. “[I] told him to get on with his life, that I didn’t see a case and that Finkelstein was out of the education business.”
Sensitive, huh?
Well, Yeshiva will also soon be out of the education business.
In his letter, President Joel wrote that the current fiscal crisis will force YU to “reframe the way we educate.” Joel noted, “conventional models crumble beneath the weight of fiscal hardship,” and discussed the need for a “new strategic vision” to increase revenue and efficiency in new graduate programs and online education.
This blog has followed, with disgust, Yeshiva University’s longtime irresponsibility in every imaginable institutional sense – hiring, trustee appointments, presidential compensation, intellectual freedom (put YESHIVA in my search engine for details). Now the Post-Bernard Madoff bill’s come due, and the only thing missing from the president’s statement is his acceptance of responsibility and his resignation.
“Yeshiva has suffered philanthropic walkouts,” writes the school paper, putting the matter diplomatically. Remember Andrew Sole’s letter, written all the way back in 2008, to Yeshiva? A letter the school blew off? Sole called for the resignation of the entire board of trustees.
… [H]arm has come to this distinguished University, both in financial loss and worse, in reputation. It is my view that the harm today is directly attributable to the failed performance of our trustees. As fiduciaries they lost sight of their primary mission, to safeguard the long-term interests of Yeshiva University. Whether their activities were merely negligent, or worse, that judgment is best left for others.
In my view it will take a generation to repair the damage inflicted upon Yeshiva. And that is very sad. But what would be even sadder, and which would also give grave concerns to Yeshiva’s many supporters, would be for the University to continue to allow the current Board of Trustees to serve as fiduciaries going forward.
The honorable course (and we have seen virtually no honorable behavior in American corporate boardrooms, nor in our public servants, in 2008) would be for the University’s President, and its legal counsel, Sullivan and Cromwell, to demand the immediate resignation of the entire Board of Trustees.
Fuck that! said Yeshiva. We like our boys (it’s almost all boys; they all seem to be in each others’ pockets; and one of them – Zygi Wilf – just got convicted of racketeering). We’ll just go our own way, and Sole can drop dead.
(This must have been one of the strategies featured in Leadership in the Non-Profit World, a class Yeshiva’s president gave just last January, with a guest lecture from the former president of George Washington University, a longtime defender of Yeshiva University’s way of doing things. Here’s President Trachtenberg. [You need to be a CHE subscriber to read the full contents of the article.])
But Yeshiva has dropped dead. Expect it to go almost entirely online, in the cheesiest, most desperate, way.
… for its typically disgraceful behavior in regard to the depravity of some of its rabbis. Marci Hamilton excoriates Yeshiva for issuing only the thinnest of reports about its decades-long sex scandal and cover-up. She rightly compares Yeshiva with the Catholic church and its shameful efforts to deny the depravity of some its priests.
YU reportedly spent millions paying [a law firm] to produce a “Report” that anyone with knowledge of child-protection policies could have written after receiving YU’s policies and reading [newspaper accounts of the abuse]. … I would not have permitted my name to be on such a deficient and embarrassing document. A document that was truly a “Report” would have included an actual report of the facts that prompted the need to review those policies.
As with Yeshiva trustees Bernard Madoff and Ezra Merkin, the point all along has been to ignore, delay, and then – to the extent possible – deny.
Hamilton’s response would be a significant blow to most universities. But this is Yeshiva, and she is a woman. That means she does not exist.
The report says the investigative team planned to make public its complete findings on sexual and physical abuse but was directed by a special committee of the Yeshiva board of trustees, “as a result of the pending litigation,” to describe the findings “in summary fashion.”
This direction, as the Yeshiva student newspaper points out, “[casts] doubt on the true independence of the investigation.”
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UD decided to pay a visit to those honchos, with their impressive legal delicacy. What manner of man (they’ve recently put some token females on the board), now that it’s lost Bernard Madoff and Ezra Merkin, sits on Yeshiva University’s board of trustees?
UD decided to choose one name on the list and find out all about him. She chose an unusual name because she wanted to be sure she was getting the right guy. She chose Zygmunt Wilf. How many Zygi Wilfs can there be out there?
Here’s the latest, as of August 5, 2013, on Zygi:
[New Jersey Judge Deanne] Wilson found that Zygmunt Wilf, along with his brother, Mark, and their cousin, Leonard, committed fraud, breach of contract and breach of fiduciary duty and also violated the state’s civil racketeering statute, or RICO…. Discussing the Wilfs’ misdeeds, Wilson said they failed to meet the “barest minimum” of their responsibilities as business partners. “I do not believe I have seen one single financial statement that is true and accurate…”
Zygi got an honorary doctorate – for “philanthropic values” – from Yeshiva.
Good to know that as Yeshiva University begins the process of dealing with its faculty’s misdeeds, it will have people like Zygi at the controls.
Yeshiva University’s Moody’s rating has just been downgraded to Baa1 from A2; Moody’s is currently reviewing the university for further downgrades.
How does a university get to such a disastrous place?
It was not the work of a day. Yeshiva had to make itself so notorious that students didn’t want to enroll, and alumni didn’t want to donate. This took about five years, starting with the brilliant idea of putting Bernard Madoff and Ezra Merkin – both YU trustees – in charge of Yeshiva’s money. Conflict of interest? Who cares.
The financial and reputational hit was a biggie. But Yeshiva was just getting started.
Instead of dealing forthrightly with its misbehavior, Yeshiva said nothing and simply erased Madoff’s name from all mentions on its website. (It couldn’t erase everything: “Madoff’s name was prominent in the program for Yeshiva’s annual Hanukkah dinner and convocation, a major fundraising event, held on Dec. 14 at New York’s Waldorf-Astoria Hotel, three days after he was arrested.”) It then went about characterizing itself as an innocent victim of this mean man and his friend Ezra.
With the Madoff/Merkin mess already destroying Yeshiva’s integrity, extensive sexual scandal now hit the newspapers. Decades of important Yeshiva University rabbis preying on children, or looking the other way while children were preyed upon, are the talk of the town. Yeshiva will probably have to settle hundreds of millions of dollars on the traumatized people suing it.
A third crucial component of Yeshiva University’s catastrophe is its inability clearly to admit wrongdoing, coupled with the continued prominence of people reportedly associated with wrongdoing. Take Hershel Schachter.
The power of the rabbinical school rabbis to intervene in student intellectual and extracurricular life could also undermine [Yeshiva University’s] efforts to compete with secular colleges. Rabbi [Hershel] Schachter, who objected to the study of the Christian Bible, also [said] he sees the work of Geoffrey Chaucer as expendable and that 50 percent of an art history course is probably ‘avodah zara and gilui arayot’ (idolatry and licentiousness).”
Okay, so far just a jerk, the sort of anti-intellectual endemic on fundamentalist university campuses. But there’s more.
Earlier this year a prominent scholar at Yeshiva University, Rabbi Hershel Schachter, was caught on audiotape at a conference in London telling Orthodox leaders that Jewish communities should set up their own review boards to evaluate any complaints of child sexual abuse and determine whether to bother with the police. This contradicts state laws on mandatory reporting for teachers, counselors, physicians and such.
Schachter further discouraged police involvement by warning that accused abusers could wind up “in a cell together with a shvartze, in a cell with a Muslim, a black Muslim who wants to kill all the Jews.” Shvartze is a harshly derogatory racial term. Yeshiva University condemned the remarks but seemingly didn’t discipline Schachter, who didn’t respond to my request Monday for comment.
No comment, of course; and Schachter retains a high rank at YU. So does Kenneth Brander.
Better recruiting is [YU President Richard] Joel’s answer to declining enrollment. Back in June, he tasked Rabbi Kenneth Brander, head of the Center for the Jewish Future, with a special assignment: to “re-invent recruitment strategies,” as Joel put it to the Stern College student newspaper, The Observer, in an October interview.
And here is Brander in the Jewish Daily Forward:
[T]wo men have told the Forward that they tried to warn … Kenneth Brander, about Andron. Brander led the Boca Raton congregation from 1991 until 2005, when he took a post as dean of Yeshiva University’s Center for the Jewish Future.
One man who said that he was molested by Andron for three years told the Forward that he called Brander during the early 1990s.
“I told [Brander], he’s definitely a pedophile,” the man said, referring to Andron. “[Brander said] he would look into it, and he never called me back.”
Another man said he tried to warn Brander about Andron a little more than a decade ago.
The man said he tried to call Brander “four or five times,” but Brander did not respond. So the man said he “had to leave a very uncomfortable message” with someone in the Boca Raton Synagogue office. Later, a “third party” from the synagogue contacted the man to say that the allegations against Andron were “rumors” and that “in any case, it’s behind him,” the man said.
Brander may well be innocent of these charges; but as far as YU’s future goes, it doesn’t matter. The school is in free fall.
University Diaries, I’ve had occasion to say, couldn’t exist without Yeshiva University. Yeshiva is part of a tiny American university elite, a group of schools so arrogant, so dishonest, so mismanaged, so inbred, so simply without a clue, that their unceasing scandals provide a good deal of this blog’s content.
Yeshiva, furthermore, is a religious institution, which makes its very bad behavior that much more astounding. To a man (there aren’t any women in positions of authority there), the Yeshiva representatives UD has experienced appear to her to be pious hypocrites.
Yeshiva’s latest catastrophe was totally expected. Let me quote in its entirety the short notice the Jewish Daily Forward just placed on its website.
Yeshiva University’s credit rating has been downgraded by a major ratings agency amid large and growing deficits, a falling endowment and fears of costly litigation stemming from recent allegations of sexual abuse at its high school.
Moody’s downgraded Y.U.’s debt from A2 to Baa1, putting it below the median credit rating for similar institutions.
The agency says that the litigation prospects of the alleged sexual abuse victims will largely determine if the debt is downgraded further.
Since its peak in 2007 Y.U.’s endowment has cratered, falling 45%, doing handily worse than the stock market. Y.U.’s reliance on hedge funds, in particular, has been extremely damaging. It was also slammed by the financial crisis and damaged by its entanglement with Bernie Madoff’s Ponzi scam.
Meanwhile, the federal lawsuit filed last week by former students at Y.U.’s affiliated high school, alleging administrative negligence in response to abuse they suffered there, is demanding over $380 million in damages. According to Moody’s the attendant publicity may have large consequences for Yeshiva’s fundraising efforts.
As a commenter on this notice writes, “the major damage to the YU bond ratings is not just because of the lawsuit, but because YU has probably lost the confidence of donors.” One Yeshiva donor, Andrew Sole, tried to warn Yeshiva as far back as five years ago. Read his letter calling for the resignation of the entire board of trustees here. The letter, it goes without saying, was ignored.
And note the word “entanglement” up there, relative to Bernard Madoff’s scheme. Madoff, you recall, was a high-ranking, much-venerated trustee of Yeshiva University up to the moment he was taken into custody. Ezra Merkin was also on the board of trustees at that time, working, in consort with Madoff, the sort of financial magic that has become the stuff of legend. Yeshiva tried to make itself out to be a victim of Madoff’s, but it was an enabler, it made plenty of money off of him while the making was good, and it looked the other way when anyone could see that Madoff’s returns were totally impossible.
“Moral bankruptcy,” Algemeiner newspaper said of Yeshiva University earlier this year. That moral bankruptcy has so disgusted donors that it threatens to become financial bankruptcy.
… is currently being sued for about three times what it lost by investing in its much-honored ex-trustee Bernard Madoff’s fund.
It’s not easy to keep up with the financial and sexual scandals at Yeshiva University, so don’t try. UD will do it for you.
This bizarre institution is one of the main locations keeping this blog in business. It specializes in trustees like Bernard Madoff and Ezra Merkin, infantilizing and sexist rules for its students, conflict of interest among its post-Madoff/Merkin leaders, and decades worth of hushed-up sex scandals. And it’s all presided over by a very highly paid president who responds to most things with denial or silence.
Yeshiva is the very model of a corrupt university, and it should surprise no one that today its chancellor has had to resign in disgrace, having ordered the hushing up of extensive sexual abuse of students.
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The larger context:
In recent years traditional law prohibiting cooperation with oppressive governments was invoked by ultra Orthodox groups to forbid reporting sexual abusers to the civil authorities (as required by American law). Modern Orthodoxy followed the haredim in denying the legitimacy of non-Orthodox movements. Even at Yeshiva University, a highly respected rosh yeshiva and decisor, Rav Hershel Schachter (seen as continuing Rabbi Joseph B. Soloveichik’s halachic teaching in the rabbinical seminary), said publicly that the prime minister of Israel should be assassinated if he dared to give up some section of Jerusalem for the sake of a peace treaty. (He later apologized for the comment.) Recently, Rabbi Schachter was recorded warning against reporting sexual abusers to the authorities (lest they be imprisoned and exposed to harm from anti-Semites).
You can’t make this shit up.
A top rabbinic dean of Yeshiva University has warned rabbis about the dangers of reporting child sex abuse allegations to the police because it could result in a Jew being jailed with a black inmate, or as he put it, “a schvartze,” who might want to kill him.
… Yeshiva University has been embroiled in a mounting scandal following a series of reports in the Forward since December about abuse allegations against two former staff members at Yeshiva University’s high school for boys in Manhattan.
“[The] warden in the prison can kill you. They can put you in a cell together with a shvartze,” [Hershel Schachter said].”
— is once again on the receiving end of a spanking delivered by a Jewish newspaper. “Moral bankruptcy… exists at the institution… [Yeshiva] must immediately undertake an independent investigation which examines moral issues at the institution.”
The author reviews some – not all – of the scandals emanating from Yeshiva just over the last few years. He wonders why Yeshiva covers them up, denies them… UD has asked why Yeshiva refuses to respond to angry public letters from alumni, fails to change its incestuous form of governance…
Far from being willing to examine its structural corruption – a corruption which will continue to generate scandals – Yeshiva shows every sign of believing itself to be morally superior.
How long can a large complex organization remain delusional?
UD gives it another five years before it will be put in some form of receivership.
… set the pace here** – and as for bohemoth endowment losses based on interest-rate swaps, no one will ever outpace Harvard’s Larry Summers .
But Dartmouth is certainly doing its bit, with “the investment of $550 million in interest-rate swaps with now-defunct Lehman Brothers that [a faculty and alumni group] says are now worth $250 million.”
A lot of people at Dartmouth are unhappy about university trustees who are also money managers, and they’ve written a letter about it to the governor and attorney general of New Hampshire.
The letter calls for an investigation into money managers who have invested the Hanover, N.H.-based college’s assets while members of the investment committee… The letter accuses the money managers of “enriching themselves” through private equity, venture capital and hedge fund investments made by the endowment.
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In an official letter distributed to alumni, students, faculty, and administration, Yeshiva University President Richard Joel stated that Merkin, who was Chairman of the University Investment Committee, managing its endowment of almost $1.8 billion (as of about 2 years ago), had invested about $112 million in his own hedge fund, Ascot Partners, which was almost solely invested with the [Bernard] Madoff fund. In actuality, it was an initial investment of $14 million that became falsely inflated to $112 million over time. As such, Merkin collected an initial fee of one percent and later 1.5 percent, standard for all of Yeshiva’s money managers on whose Board of Trustees he sat. He collected over $2 million in fees, almost $1 million for Ascot alone. In fourteen years, the fund grew 9 percent a year, even after subtracting losses for Madoff and expenses. He made at least $10 million from Yeshiva over his tenure. Although Joel implicitly acknowledged that the university’s charter lacked a conflict of interest restriction on the management of school funds, Merkin resigned from all of his positions at Yeshiva that day.