Just when we thought Orthodox scandals couldn’t get worse, we learn that millions of taxpayer dollars have been illegally diverted to Jewish institutions by unscrupulous and self-interested parties. Bnos Bais Yaakov, an ultra-Orthodox school in New York, was one of the city’s largest recipients of funding for disability services.
The Island Child Development Center billed New York State more than $27 million over the past 6 years, allegedly for individual instruction for approximately 200 disabled children ages 3 to 5 as part of a state-funded special education pre-kindergarten program. However, on March 18, the office of New York State Comptroller Thomas P. DiNapoli released the news that the Island Child Development Center, handled the largest misappropriation of funds to the tens of millions of dollars. There is no proof that any student had actually received individual instruction, and there is also an egregious connection in the disbursement of funds between Island Child and its management:
• Island Child gave $2 million to an Orthodox Jewish girls’ school, Bnos Bais Yaakov, which is owned and run by assistant executive director Rabbi Samuel Hiller
• Rabbi Hiller received $330,000 in non-payroll checks from Island Child
• Rabbi Hiller owns two of the summer camps that received part of $877,000 given from Island Child
• Island Child purchased $344,000 in food, much of it from a kosher supermarket owned by chairman of the board Laurence Garber, in direct violation of state rules that prohibit the use of these funds to purchase food
• Island Child paid out upwards of $200,000 to employees and vendors that were nonexistent or unaccounted for
Not only were government funds stolen but thousands of special needs children, who have no way to fight back, have had their services denied in a cynical, cruel manner.
There is another scheme currently going on that benefits a relative few in the Orthodox community while cheating Orthodox students as well as other students in low-income areas of their funding. This involves the government program E-rate, which provides funds (drawn from long-distance service fees) for schools and libraries serving low-income students to improve their Internet/telecommunications capabilities, from which Jewish schools received $30 million in 2011. Paradoxically, Yeshivat Avir Yakov, a haredi boys’ school in which there are no computers in the classrooms (and where the Internet is considered to be evil), has received $3.3 million in E-rate funds since 1998. Often, these funds have gone to small companies that serve the Orthodox community: Some Orthodox groups have listed themselves as libraries in order to be eligible for these funds. In the case of Yeshivat Avir Yakov, their 2012 application proposal included wiring 25 classrooms and more than 40 computers and other devices with Internet access, along with more than 260 cell phones, all for a school whose community opposes the Internet. Bais Ruchel D’Satmar, an all-girls’ Satmar school in the Williamsburg section of Brooklyn, had its principal plead guilty to fraud in 1999 and even today has no internet, yet it received $1.5 million in E-rate funds in 2011. As for the above-mentioned Bnos Bais Yaakov, it has received $100,000 through the E-rate program since 1998 and has requested over one million dollars this year. (Funding for 2013 has not yet been determined.)
Where is the funding going, if the schools have no computers in the classroom, and because of religious ideology it is not likely to introduce internet into the curriculum? The answer is that much of this corruption is hidden, but at times these activities come to light, as in the recent case of Rabbi Milton Balkany, a member of the Rubashkin family, known as the “Brooklyn Bundler” for his ability to raise and combine large sums of cash for maximum political clout usually steered toward conservative politicians or his yeshiva. He has had several brushes with the law and for a time seemed invulnerable. In 2000, it was reported that Rabbi Balkany was taking money from Orthodox families in exchange for his help in expediting child day care vouchers intended for low-income families. Even though the vouchers going to his particular neighborhood were several times greater than all the vouchers issued in the Bronx and Manhattan, he was never charged with a crime. In 2003, he was accused of misusing a HUD grant to his yeshiva (intended to pay for a mortgage on a building that would house a school for disabled preschool children), in part by siphoning $78,000 for his personal use. Rabbi Balkany acknowledged wrongdoing and agreed to pay the money back and to travel restrictions in exchange for a government promise not to prosecute him. However, in November 2010 his luck ran out when he was convicted of trying to extort hedge fund manager Steven A. Cohen. Rabbi Balkany had threatened to arrange for an inmate to testify that Cohen’s hedge fund had engaged in insider trading unless Cohen gave him $4 million for two yeshivas he led or was affiliated with. The scheme backfired when his conversations with a hedge fund officer were secretly taped. He is now serving a 4-year prison sentence.
Many in the American ultra-Orthodox community believe they do not have to be loyal to American law. If they believe they are furthering the interests of their religious community, then it is justifiable to cheat on taxes or rob the government. Others still think that we should keep quiet about these scandals coming out of our community and stop “airing out our dirty laundry.” This approach is not only an immoral but strategically flawed, and it will only cause more pain for all. We need ultra-Orthodox leadership that is ready to stand up and openly declare that there is a crisis. Instead, the opposite message emerges from the community, claiming that everything is under control. If we look at the issues of child abuse, domestic violence, and financial malfeasance, among others, we would see that the situation is anything but fine.
In his magnum opus, the Ramchal taught:
Most people are not outright thieves, taking their neighbors’ property and putting it in their own premises. However, in their business dealings most of them get a taste of stealing whenever they permit themselves to make an unfair profit at the expense of someone else, claiming that such a profit has nothing to do with stealing. It is not merely the obvious and explicit theft with which we have to concern ourselves, but any unlawful transfer of wealth from one individual to another that may occur in everyday economic activities (Mesillat Yesharim, chapter 21).
We are experiencing over and over again the tragedy of a flawed Jewish ideology which rejects modern society and the laws and orders that come along with it. A Torah education that comes out of a school that is run by thieves has no value, as the Rambam taught:
One may not buy from a thief the goods he has stolen, and to do so is a great transgression because it strengthens the hands of those who violate the law and causes the thief to continue to steal, for if the thief would find no buyer he would not steal, as [Proverbs 2:24] says, “He who shares with a thief is his own enemy” (Hilchot Geneiva 5:1).
We must consider the values that we impart to our students, and remember that we are required to take care of the most vulnerable in society. Can anyone say that the examples cited above are consistent with a true Torah existence? We must take responsibility for our community. The first step is for us to ensure the entire frum community owns up that there is a real problem.
Rabbi Shmuly Yanklowitz is the Founder and President of Uri L'Tzedek, the Senior Rabbi at Kehilath Israel, the Founder and C.E.O. of The Shamayim V’Aretz Institute and is the author of "Jewish Ethics & Social Justice: A Guide for the 21st Century.” In 2012 and 2013, Newsweek named Rav Shmuly one of the top 50 rabbis in America."