Wednesday, December 21, 2016

On Platinum Partners and Orthodox White Collar Crime

The Modern Orthodox World is once again aghast at the news of a major financial fraud, allegedly involving graduates of YU and Gush Etzion. Social media are burning up with understandable angst and outrage. These are my initial thoughts:

There are (it seems to me), two separate issues: the punitive and the educational. As the commenters note, in a decentralized Jewish Community, punitive actions are very difficult. Deny someone Maftir Yonah here, he'll pay for it there. That doesn't mean that convicted criminals and their actions should not be excoriated. It doesn't mean one should honor them. [Yet, given the financial crunch of every school, yeshiva and shul I'm less than sanguine that this will happen. Will honest people make up for the donations of the wealthy corrupt?] The situation is extremely frustrating. 

More promising,I think, is the educational piece. This horrific phenomenon of widespread 'Orthodox' White Collar Crime is a function of a number of factors. 

1) We've assimilated the regnant culture of 'No Shame.' We have no shame morally, sexually, religiously--you name it. Compare the reactions today to the total abashment of the Orthodox Community when Bernard Bergman was exposed for abuse in his nursing homes. He was effectively driven out of the communal structure. 

2) This is the downside of the first time, that I can recall, in history that Orthodox Jews have massive amounts of money, and their education has totally failed to prepare us ethically for that circumstance. There were always wealthy Jews, but I have the impression that the amount of fraud that they might commit (and it did happen, as attested in responsa) was tempered by the awareness that if caught, all Jews would suffer expulsion or death. Also, sectors of the MO community have apparently become charter members of the Universal Church of the Golden Calf. While observing mitzvot (and giving Tzedakah), it puts its vacations, homes, cars, jewelry, posh Restaurants, the size and opulence of its weddings aand other smachot etc at the top of its agenda (never mind that it's destroyed Pesach along the way). There is nothing inherently wrong with these, but the prioritizing is a structural flaw. It preaches the centrality of money and that can spill over into evil. 

3) Aiding and abetting the distortion of values engendered by having money is the wholesale abandonment of Hoshen Mishpat. We don't teach it in schools or Yeshivot. We don't hear it from the pulpit. Nada. We are obsessed with ritual minutia (much of it unnecessary), while ignoring basic ethics. The Rav זצ"ל once told me that ritual that is not grounded intellectually AND morally is nothing less than ceremonialism. And, he added, ceremonialism is fundamentally pagan. 

4) This all, of course, is related to the phenomenon of Tax evasion, the inability to distinguish between taxes paid to the US Treasury and those paid to Phillip IV of France (who expelled the Jews anyway). 

5) So what's to be done? Educate in Hoshen Mishpat (in school curricula, sermons, parsha sheets etc.) Take the hit and refuse donations (and honors) from convicted criminals (and let the other wealthy and less wealthy share the burden). Impose serious sumptuary practices on the community. (Think of what the $100,000 a family pays for Pesach in the Alps could do for a Day School.) Every participant in a Dinner or Even should be asked to write two checks, for the dinner and the donation. (The message will be obvious. Doing less is really לפני עיוור). Anyway, that's my two cents. Here in Israel, the present challenge is dealing with Men harassing women and how to deal with them in a communal setting. Similar problem, slightly different set of considerations.


Lawrence Dressler said...

I don't believe there is a "horrific phenomenon of widespread Orthodox white collar crime." I am a lawyer who was locked up for almost two years in the Federal white collar prison of choice for Jews, in Otisville, NY. I was locked up with many ponzi schemers as well as hedge fund guys. These guys start off with legitimate business operations. The problem is that the investment world is not highly regulated, especially when it comes to hedge funds. I knew a guy who wired ten million bucks out of his hedge fund and two independent audits didn't catch it. These are guys who operate in an industry where fraud is rampant. Fraud is pervasive in most of the American and international business world. Open your eyes. Big banks and large financial institutions are constantly subjected to regulatory fines and sanctions for fraudulent activities, whether it is hospitals over billing the government, or banks money laundering for drug cartels, ie., HSBC. Jews working in the business world do not commit more financial crime than non-Jews. Many guys who commit financial crimes are gambling addicts, or are addicted to the rush of accumulating money. These are industries where money is the measuring rod of human worth. I don't think classes in ethics will prevent Jews from succumbing to peer pressure, human weakness, stress and psychological issues.

Jeffrey R. Woolf said...

Dear Lawrence,
Thank you for your comment. I am sorry that you went through a difficult time, and I learned a lot from your remarks. It will help me modulate my thinking.

Anonymous said...

Lawrence, Thank you for the insight. I have to agree with many of Jeffrey's points. I have been close to this world both professionally, working at a boutique white collar criminal defense firm in Manhattan, and, unfortunately, personally.

There is most definitely an issue in the Jewish community with white collar crime. When I was working at the law firm, it was almost embarrassing how many Jewish clients came through our doors as compared to non-Jewish clients. Being asked to interpret some Hebrew writing on a chassidic client's sentencing letters did not make me proud. Or sitting in a Yeshiva right before Neilah listening to a speech about honesty and integrity when the very school we were sitting in is named after a bunch of crooks. Or seeing an entire community fall over themselves to honor a known criminal simply because he gives large amounts of tzedakah.

We do have a major issue in our community. Although I do agree with you that money is a powerful thing and can lead otherwise good people to do stupid things. It is the way that our community reacts after the fact. There is no shame, in fact in many instances these people are put up pedestals because of the good they do for their communities with other people's money.

Hypocrisy at its finest.

Jonathan B. Horen said...

I happened to read this recent article in the New York Sun, and remembered your post on the subject. Here's a link to the newspaper story:

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These are guys who operate in an industry where fraud is rampant. Fraud is pervasive in most of the American and international business world. Open your eyes.
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