One Madoff charity goes unscathed
Several charities will be forced to shut down because of their investments with Madoff. But at least one with close ties to the family reports no unethical behavior.
NEW YORK (Fortune) -- The list of charities devastated by Bernard Madoff's alleged fraud keeps growing, but one philanthropic organization with strong ties to the Madoff family has so far emerged unscathed.
The Lymphoma Research Foundation, which funds scientific research and patient programs, did not have any money invested at Bernard Madoff Investment Securities, according to the foundation's president Suzanne Bliss. Andy Madoff, Madoff's son and a director of proprietary trading at Madoff Securities, began serving as LRF's Chairman and CEO in January 2008.
"We never were invested in anything at Madoff Securities -- never," said Bliss. "It was never even suggested."
Andy Madoff, who began working at the family firm after graduating from Wharton, was not named in the Dec. 11 complaint that alleges his father conducted a Ponzi scheme through the family investment firm and defrauded investors out of $50 billion.
The younger Madoff first became involved with the Lymphoma Research Foundation after being diagnosed with lymphoma, a form of blood cancer, in March 2003. He began serving on the Board of Directors, and the Madoff family became major donors.
Bliss declined to discuss the Madoffs' contributions, but according to the foundation's most recent annual report, the Madoff Family Foundation contributed more than $1 million in 2007 alone.
"Everything the Madoff family did over the years was done exactly the way they said they were going to do it. There were never any questions," said Bliss.
The Lymphoma Research Foundation, which gave out more than $6 million in grants in 2007, has funded research at the Dana-Farber Cancer Institute and Stanford University. According to the 2007 annual report, as of last December the organization had just over $18 million in investments, with $13.8 million in certificates of deposit, $3 million in equity mutual funds, and $1.6 million in corporate bonds.
That's the good news. Other charities that were invested with Bernard Madoff have fared much worse.
The Shapiro Family Foundation, a $345 million Boston-based charity run by longtime Madoff family friend Carl Shapiro, estimates that 40% to 45% of its assets were invested with Madoff.
Several smaller charities whose funding depended on money invested with Madoff, including the Robert I. Lappin Charitable Foundation, the JEHT Foundation, and the Chais Family Foundation, have announced that they will cease operations due to loss of funds.