The Financial Watchman at the Gate

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For what it’s worth, I have never met any of those ensnared in the money-laundering scandal in Deal, NJ and Brooklyn, NY. Nonetheless, it’s always embarrassing when you have a scandal involving several rabbis. Rabbis are supposed to do better, right?

Of course, you have the defenders coming forward and pointing out that they were trying to help their institutions rather than personal gain, or even doing a favor for a guy who’d fallen on hard times — only to learn the hard way that he was an FBI informant. All of that will come out in court, and it’s pretty unlikely that some of them will see any significant time behind bars.

But all that doesn’t matter. Rabbis are supposed to do better.

Miriam, Moshe’s sister, also did something wrong. She spoke badly of her brother, and she was punished for it. And the Medrash Tanchuma says that those sent to spy out the land of Israel, on behalf of the Jewish Nation, “saw and did not take Mussar.” They didn’t learn. We can either look at what happened and make clucking noises, or we can learn from events.

Less than two years ago, there was a similar scandal involving a group of schools and institutions run by a Chassidic Rebbe in California. And he, having pled guilty to significant crimes, will likely begin serving his sentence shortly.

At a hastily-arranged seminar in business ethics early this week, this Rebbe made a surprise appearance. He offered no defenses, no justification for what happened. On the contrary, he admitted that what he did was wrong, what his organizations and people did was wrong, and must never happen again. [Thanks to Rabbi L. Oberstein for pointing out that the video is available.]

And he also took another step forward. He disclosed that together with a team of lawyers and accountants, his institutions had created a compliance plan to ensure that it would never happen again — that everything done would be completely above board. And he publicly offered to share that plan with others.

The Torah tells us that a judge may not take any sort of bribe, because “bribery blinds the eyes of those with clear vision, and distorts the words of the righteous” (Exodus 23:8). When you or your chosen cause stand to benefit, there is a temptation to look the other way. It doesn’t matter who you are or your chosen calling — the Bible says it’s human nature. G-d tells us that clarity of vision, intelligence, and decades of honest and upright behavior will not provide foolproof protection. It’s not that your accountant is inherently more honest; it’s that your accountant doesn’t stand to benefit, and is able to appraise the situation with an unbiased eye.

If that’s true for an 87-year old Rabbi, who among us is going to look in the mirror and say he or she is inherently better than that?

We all need an impartial third party to give us the hard advice that we may not want to hear.

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27 Responses

  1. Bob Miller says:

    Comment by A K — August 13, 2009 @ 3:11 am is correct, but one would hope that our Torah-based values would cause us to curb our overspending to free up money for the real necessities.

  2. A K says:

    Social pressure to overspend on family events is insidious and pervasive across the Orthodox spectrum.

    Comment by Bob Miller — August 11, 2009 @ 4:32 pm

    Social pressure to overspend is insidious and pervasive across the spectrum.

  3. Bob Miller says:

    Social pressure to overspend on family events is insidious and pervasive across the Orthodox spectrum.

  4. Sholom says:

    “Perhaps, this will signal a new view of working for a living, respect for appropriate trade and secular education, as well as a sophisticated view of relating to non-Jewish society. Ben Brafman’s speech is also very significant.”

    I hope so, but have my doubts. A by-product of living in an exceptionally cloistered community, most typified by the Chassidic/Chareidi populations, is that norms of conduct adopted by the outside world are shunned or ignored altogether. Because there is plenty of negativity in society at large, many Orthodox (particularly the more conservative groups) have a tendency to reject everything that is deemed somehow foreign, or a by-product of an alien society. Additionally people may simply not be aware that certain laws are in effect in this country, due to minimal interaction with the secular/non-Jewish world.

    An additional problem, of course, is that a population that shuns any form of secular education will, statistically, do worse economically. While it’s nice to think that all of these people compensate by living extremely scaled-down, frugal lives, a la the Chofetz Chaim, we all know that that’s frequently not the case. People start to feel the pressure to commit various frauds of one sort or another–some of them truly just in order to get by.

    There needs to be a re-emergence of the teaching in Pirke Avos that recommends combining Torah study with an occupation, and the importance of teaching one’s child a VIABLE trade, as a deterrent to dishonest behavior down the line.

  5. Andrew says:

    Thanks, Shades of Gray.

    I was unfamiliar with Rabbi Lopitan before reading his article in VIN. He seems to be a real Mensch! His tone is so respectful and dignified. He’s a real role model for … me.

  6. Shades of Gray says:

    The reason why I saw the Spinka Rebbe’s speech as positive is not because I belittle the actions done, but because I believe that the gathering was as he described, a “hirrur teshuvah” and “kiddush Hashem”, essentially, a new beginning. I think he meant it sincerely.

    I also think at this time it’s important to realize that there are other Torah leaders who dedicate themselves to guiding the community during these troubling times. It has nothing to do with infallibility, just a matter of recognizing dedication and wisdom.

  7. Shades of Gray says:

    There is so much negativity in the recent media, that it is gratifying when one sees something positive from a completely unexpected chain of events.

    R. Asher Lopitan, a modern-Orthodox rabbi had published a critique of the Jerualem riots on Vos iz Nais and in other sources. The American Yated took him to task for the article( although I had no problem with the original article). Included in the critique was an invitation to visit Meah Shearim.

    R. Lopitan writes on his blog:

    “At the same time, I am gratified that beyond the issues of Hilul Hashem and Kiddush Hashem, the invitation to Me’ah She’arim from USA Yated Neeman editor Rabbi Pinchas Lipschutz was sincere, and we have been in touch, and I look forward to meeting with him, and eventually being in Me’ah She’arim together. This is a new relationship with a leader in the Yeshivishe world that I hope to foster, and I am grateful for it.”

    He also includes advice that anyone can learn from:

    “But I understand, that especially when being critical of my brothers and sisters, I need to be humble and modest , avoiding any sarcasm and certainly not relishing in critique. The truth is that if the message is right and true, it will get heard without being “in your face” and sensational. I was happy that my ideas were picked up by many different outlets, but I feel that since it was a message of rebuke, tocheicha, I need to work harder to make sure not to feel even one shemetz – one iota – of satisfaction of taking on a community and its leadership”.

    All of the above has nothing to do with correct or incorrect hashkafos, or who is right and wrong, and therefore can be accepted by anyone.

  8. shmuel says:

    The lesson to be learned was taught a long time ago.”Tzedek Tzedek tirduf” which has been understood to mean tzedek B’tzedek tirduf. The ends dont justify the means. Fraud , even if committed for the benefit of a worthy tzedaka and not for personal enrichment is not only WRONG, it is ASSUR. Kal v’chomer when done for personal enrichment.

  9. Bob Miller says:

    More on informers:

    For now the people who were informed on or caught in the sting operation are regarded by some Jewish media as victims. If one of these alleged victims were now to turn state’s evidence to get a lighter sentence, are these same media ready to relabel him as an informer, too? These investigations tend to move along in waves.

  10. One Christian's perspective says:

    “It is a reminder to me of G-d’s goodness, grace and mercy in toughing hard hearts and turning eyes back to Him. Joy does follow sorrow because we recognize G-d still watches over us in love and brings us to where He is. Nothing happens by accident.”

    Sorry, I meant to say that G-d softens hard hearts and turns our eyes back to Him. We already made our hearts hard.

  11. One Christian's perspective says:

    ” When you or your chosen cause stand to benefit, there is a temptation to look the other way. It doesn’t matter who you are or your chosen calling — the Bible says it’s human nature. G-d tells us that clarity of vision, intelligence, and decades of honest and upright behavior will not provide foolproof protection.” – Yaakov Menken

    I think temptation always occurs in the moment of “now”. That is when the right choice has to be made. Who has made the “right” choice all of the time ? Who has not fallen to temptation; it is truly a snare. I see much pain from what has happened. These are the consequences of wrong choices but I see G-d’s mercy in that He has allowed that which has been done in the dark to be exposed to the light. I am reminded of the Prophet speaking to David who did not see clearly his wrong choices. I see the beauty of G-d’s revelation through the Prophet that led David to confess and repent. Psalm 51 is just so awesome. It is a reminder to me of G-d’s goodness, grace and mercy in toughing hard hearts and turning eyes back to Him. Joy does follow sorrow because we recognize G-d still watches over us in love and brings us to where He is. Nothing happens by accident.

  12. Sam says:

    Can someone clarify whether what the informer did was a prohibition of Mesira? I know there are opinions that say that informing to the American government is allowed, if not encouraged. If people are stealing, from other citizens or even the government, that is harming the public. If those who are stealing are high profile Rabbis then it’s a Chilul Hashem atom bomb just waiting to explode. Isn’t an informer doing a service to all of us by bringing a stop to this before it gets even bigger? Then again, if the informer knew that that those he was reporting on were naively oblivious to American law, which may be the case for some of them, it seems to me the right thing for him to do would be to quietly inform THEM that they were breaking the law and that they might be arrested for their action, and all the Chilul Hashem that goes with that. I know there are those who are portraying this informer as some sort of villain, but I’m really unsure. Does anyone have some clarity on this?

  13. lacosta says:

    i didnt listen to the recordings. does the rebbe go into the hava amina
    ie assuming he was aware of the operation, what was the forethought— it’s muttar, it’s not but worth the risk, it’s ok to cheat the govt,it’s for a good cause,etc—- or something else. the reason it matters is because if we can identify the thought process , we can hopefully avoid similar events…

  14. Shades of Gray says:

    It’s way to early to see anything positive, but I think the Deal and Spinka cases are historic.

    Perhaps, this will signal a new view of working for a living, respect for appropriate trade and secular education, as well as a sophisticated view of relating to non-Jewish society. Ben Brafman’s speech is also very significant.

    At least in the Spinka case, it also shows that leadership can admit that it has erred (one Torah discussion of this is R. Chaim Shmulevitz’s essay on Moshe Rabbenu’s admission, in Shmini, of “shomaati v’shochachti”, “I have heard, but forgotten”)

    My thoughts were overwhelmingly positive upon hearing the Spinka Rebbe’s speech. Someone I was talking said he thought it wasn’t strong enough, but I thought, “let’s see you go up and publicly admit a mistake !”

  15. Nathan says:

    Our yeshivahs and schools for girls must become serious about teaching Dina DeMalchuta Dina and the punishments for mesirah.

  16. Bob Miller says:

    I find it remarkable that the FBI’s recent informant still had the confidence of some leaders and members of his community, to the point that they were willing to entertain illegal proposals he made while wired for sound.

    We ought to reflect on how community members should behave towards one of their own who is under indictment for a serious financial crime. Beyond taking the proper approach of “innocent until proven guilty”, as if nothing had happened, shouldn’t we at least take a hard look at any business deal he proposes prior to his day in court? Possibly, we should look at such a deal as possibly suspicious and not get involved until we are 100% satisfied it is legal and fair. This in no way keeps us from helping the accused with his defense if we feel he was unjustly accused.

  17. Ori says:

    I suspect part of the problem is that Charedi society is so charity driven. A yeshiva where the students studied three days and worked three days to defray the cost of their education wouldn’t need to rely on donors so much. It would be a lot easier for the Rosh Yeshiva to say “no”, because he wouldn’t feel as beholden.

    Such a Yeshiva would obviously not get through as many pages of Talmud. But would it be worse in developing the middot of students who will eventually need to combine employment with Torah?

  18. Andrew says:

    I think i am missing the point. I am supposed to take this as personal mussar because even great rabbis are vulnerable! Puleez.

    The actions were illegal and everyone knew they were illegal.

    And the problem is bigger than this and quite pervasive: Cash transactions not declared as income; sales tax not being collected or reported — as a matter of store policy!

    The message for everybody is really clear, and quite simple. OBEY THE LAW. There, once done, 99% of the chillul Hashem will disappear!

    It is advice simple enough than a non-gadol can understand, yet emesdik enough than even a gadol should adhere by it.

  19. L. Oberstein says:

    Someone sent me the You Tube location for the remarks of the rebbe in Yiddish. It is essentially the same thing but about 10 minutes long. If you enjoy hearing a good chassidishe Yiddish, you will savor the speech.
    I assume that the rebbe spoke in Yiddish, his native tongue and then, on advise of counsel perhaps, switched to a prepared statement in English.
    Here are some potential consequences of the latest scandal. Institutions will suffer because they will no longer get the generous support of those who want most of the money back in cash, they will have to rely on real donations. I hear Rabbi Ovadia Yosef is worried and wonder, to what extent, this will affect Sephardic and Chassidic mosdos. All institutions will be examined more carefully and many people may be audited more carefully. Donations to yeshivos may become a “red flag” and lead to an audit. Then all the people who claim their tuition checks as donations will have to prove that they have receipts.
    Orthodox and crooked will become synonymous to the IRS and we will all suffer. The honest institutions will suffer from guilt by association.
    Just when we thought the tuition crisis and the economic downturn couldn’t get worse, this came along. Woe to those who believed that you couldn’t run a Torah instituion honestly and brought down the Olom Hatorah. Onshom godol mi’n’shoh.

  20. dovid says:

    “He honestly didn’t realize that the United States is not Romania until he got caught.”

    We are fools but not idiots. Had the good rabbi been caught in the old Romania that he knew, he would have faced the firing squad for ‘zionist conspiracy’ and for ‘betraying the socialist ideals’. He pleads guilty in America and tells the judge about Romania that neither one can show on the map where it is located and he gets away with some community work.

  21. Dave Weinstein says:

    It is certainly possible for well-intentioned people to make honest tax mistakes.

    “You give me $100,000, and I’ll give you a donation receipt for $100,000 and then pass you $95,000 back under the table” is not an honest tax mistake. It is deliberate tax fraud.

    Let us not conflate the two.

  22. joel rich says:

    To clarify 2 points

    1. There was an element of justification “Out of necessity we allowed ourselves to indulge in illegal acts. ” My consulting advice would be to analyze the root cause of the necessity and try to eliminate it.

    2. I found it interesting that the team you described was similar to the description found in the reported text of the speech with a slight addition (in the speech)

    “I’d like to tell you that we’ve learned it’s possible to lead Torah and chessed organizations in accordance with the law. Yes, it is possible. People think it cannot be done, but we’ve learned this the hard way. There are now charedi lawyers and accountants who are experts in this area to ensure everything is run according to the law. When in doubt whether or not something is legal, we cannot make that determination on our own, chas v’sholom. We have to ask a lawyer how to conduct ourselves properly in that situation.”

    It might be worth thinking about whether there were such individuals available in the past, and/or why non-charedim could not have advised on such issues.

    KT

  23. Yaakov Menken says:

    I think that Rabbi Oberstein takes it a step too far. The “non Jewish compliance officer” is the former head of the tax division in the Attorney General’s office. This is not simply a matter of operating legally — as if it were a trivial matter — but being sure that operations are entirely within every detail of the voluminous tax code. The goal, as described, isn’t simply to avoid what he did, but inadvertent mistakes as well. Many a person with “honest weights and measures” has been perplexed beyond description by a tax system so complex that, to recall recent Congressional action, no one has actually read all the laws.

    There is also a big difference between a Gabbai Tzedakah and the person running an institution that receives money for his own organization. Chazal do trust a person to receive money and distribute it honestly, if that’s the entirety of his job. The money is never ‘his’ to mislead him. The difference between that Gabbai and the actual recipient, whether a poor person or someone running shuls and schools, is not subtle.

  24. Midwest says:

    #1 – the point is not what the halacha allows or doesn’t allow. The point is what is sensible to do. If the first principle of Mussar is “Hob seichel,” surely that means that when you’re dealing with money you should know that there are laws, and that the Yetzer Hara is more than happy to help you ignore that fact.

    There is also the question of mar’as ayin. Any Yid, especially a rabbi or gabbai tzedakah, should avoid the slightest suspicion of impropriety. What is wrong with having oversight by someone who knows the laws well? Isn’t that what accountants and CPA’s are for? If there is nothing to hide, so let the books be open to whoever has a question.

    Then we can avoid having any more of this kind of heart-ache.

  25. L. Oberstein says:

    I do not understand The Contarian . I hope he isn’t disagreeng with you and saying that the rabbis can do whatever they please with no oversight. Moshe Rabbeinu and Shmuel Hanovi come to mind as people who were careful to show how honest they were with communal money.

    I heard the Chassidic Rebbe in both Yiddish and in English on You Tube. He sounds like a fine person for whom the American system is totally new to him. The way he speaks about honest accounting as something unheard of and foreign and his offer to share the insights of his non Jewish compliance officer to show that indeed institutions can be run without illegality is mind boggling. He honestly didn’t realize that the United States is not Romania until he got caught. He sounds like a very good person who is punctilious in mitzvos, but “honest weights and measures” were not at all part of his world view when dealing with money for his causes. How can there be such dissonance?

    I find the total disagreement between some of us who can’t stand what is going on in Israel and Deal and those who justify everything and call the other side every bad name in the book mystifying. Is Hadassah Hospital the epitome of evil, are the doctors Megele? The money laundering has been going on for years and it is only a small part of the chronic dishonestly in business dealings that too many of our fellow Jews are known for. There are too many crooks in religious garb for this to be a rare exception. Rather, this pathetic moser had no problem entrapping his victims because they do this all the time and think that it is the normal way to run a business or a shul or a yeshiva. We have to change our mentality and become better Jews and better Americans. If you don’t want to keep American laws and don ‘t appreciate this malchus shel chesed, go someplace else. You give Jews a bad name.Shame on all the justifiers of evil.

  26. Sam says:

    So I guess your point is that Rabbis are not perfect. Does that detract from their position as a spiritual mentor? I’m thinking that it makes them more human and more capable of relating to regular people, but this is a major departure from the recent trend of whitewashing and idolizing our Rabbonim. Should we continue to judge our Rabbonim favorably, but accept that they’re imperfect when a blemish comes to light? My mind is struggling to maintain this paradox, but I think I’ll get used to it.

  27. The Contarian says:

    Your suggestion is good advice. However, the halacha is quite different.

    Our Poskim have ruled that Gabboei Tzedakah are not required to have any third party look over thier shoulders and that exemption includes all Talmidei Chachamim who collect money.

    Conflict of Interest is only taken into account if one is the king or a kohen. Unless there is blatant Negiah, a judge/talmid chahcm may rule on a case that everyone these days would consider conflict of interes