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January 15, 2009

Hadassah reveals it withdrew $130 million from Madoff account *

http://www.jewishjournal.com/blog/item/hadassah_reveals_it_withdrew_130_million_from_madoff_account_20090115/

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Last month, Hadassah announced that it had lost $90 million from investments made with Bernard Madoff. Whether Hadassah was a winner or loser, though, is up for debate. The Jewish Week is reporting that during the past 20 years the Women’s Zionist Organization of America had withdrawn $130 million from its Madoff account:

“We had no idea how much we had pulled out until a few days ago,” said a source close to the organization.

The source said Hadassah “went back through its books, year by year, to check all the records” to learn how much was withdrawn after receiving many calls from members upset with the $90 million loss.

“There are a lot of angry people out there,” the source said. “When we checked, we found that we did quite well — $130 million was withdrawn” since 1987.

Nancy Falchuk, the president of Hadassah, confirmed the $130 million figure in a phone interview late Wednesday morning as the paper was going to press. She stressed that the organization was still in need of money because over the past five years it has sent $91 million in cash each year to Hadassah’s projects in Israel. She said the organization is obligated to send another $91 million this year to pay, among other things, salaries at Hadassah Hospital in Jerusalem.

“Yes, we have money in the bank but a lot of it is restricted,” Falchuk said, adding that Hadassah is now erecting a new tower at Hadassah Hospital and is still housing children in its youth aliyah village in Israel. “We’re looking for an opportunity to recover [from the Madoff and stock market losses]. ... Three hundred thousand women own this organization and we will come through this.”

*Update: In very related news, Hadassah began massive layoffs yesterday. A quarter of its national staff is looking at pink slips:

The layoffs, however, were not solely caused by the Madoff losses. The organization had been discussing streamlining for nearly two years. The downturn in the stock market and the Madoff losses accelerated the process, the spokesman confirmed.

Last September, the organization hired McKinsey and Co. to help implement a strategic restructuring plan, the preliminary components of which were approved by Hadassah’s executive committee the week before the Madoff scandal broke, Hadassah President Nancy Falchuk said in a letter to her board in December.

That restructuring plan, which included massive layoffs, was intended initially to be implemented over 18 months. The Madoff scandal “turned it into a 30-day plan,” said a former Hadassah employee who was notified that he was laid off Wednesday morning.

Employees were notified starting Tuesday that they were being let go immediately.

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