New York – Struggling Yeshiva University Still Feels Effects Of Fraudster Madoff

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    Yeshiva UniversityNew York – Yeshiva University felt the effects of Bernard Madoff’s fraud scandal in 2008, losing about $100 million after the trustee’s departure.

    Bloomberg (http://bloom.bg/KHpjTD) reports that even though Madoff is currently incarcerated and no longer on the board, the university is still struggling. The school failed to produce its financial report on time and warned that the chronic budget deficits may get worse, sparking Moody’s Investors Service to cut Yeshiva’s rating four levels beneath investment grade.

    The university has had a difficult time controlling operating costs. Management has cut spending by freezing faculty salaries. The school’s annual deficits total hundreds of millions from 2010 to 2012 –$107.5 million in 2010, $46.7 million in 2011 and $105.9 million in 2012.

    The university released a draft in lieu of an on-time financial report for year ending June 2013, estimating a deficit of $146 million that may end up being larger.

    President Richard Joel froze senior administrative salaries and hiring last year. Non-essential programs will be cut and there are plans to sell real estate, including properties in Washington Heights on the main campus.

    Joel is taking a $100,000 pay cut himself. His compensation was $1.24 million in 2011, which made him the 24th highest-paid private-university president in the U.S.

    Yeshiva University was founded more than 100 years ago and is integral to the Modern Orthodox community in the U.S. It contains top-rated medical and law schools, in addition to a rabbinical school.

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    39 COMMENTS

    1. When dr lamm took over he saved the school from debt. Now it is Joel’s turn to do the same. The school is going to need to go beyond fundraising and seek out new programs such as online classes, smaller more affordable divisions and locations.

    2. The article states: “Joel is taking a $100,000 pay cut himself. His compensation was $1.24 million in 2011” So now he has to manage on just over $1,000,000! Can we take up a collection for him, maybe?

      It is sobering to think that the salary of the president of the USA is $400,000 and Richard Joel makes more than twice as much.

      Ironically Norman Lamm’s excuse for not dealing more forcefully with the Rabbis who molested students during his tenure was because he was focusing on the financial crisis that YU was experiencing at that time. Due to his efforts, the lean years came to an end and suddenly YU had enough money.

      And now suddenly all that money is gone and once again YU is in dire financial straits.
      Hmmm….coincidence……or something more?

      I would suggest that YU ask anti-Semite Jimmy Carter for some money since he was honored by their law school last year. The law school also honored radical lawyer Lynn Stewart as well. Perhaps some of her radical cronies can give some money to YU.

      I am a YU graduate, but I am not shedding any tears for them.

        • Your comment makes no sense.

          My parents, may they rest in peace, worked hard to be able to send us all to yeshivas. They were honest and sure as heck did not agree with honoring anti-Semites or turning aside when Jewish boys were molested.

          They knew how to save for a rainy day.

          If the machers at YU followed this example, perhaps they would not have to cry “poverty” now.

    3. Why don’t they all take a complete pay cut for a year–at that kind of salary, I am sure they can live quite nicely without an income for one year. –$100,000 isn’t even maaser money.

    4. This makes no sense why should anyone in. Yeshiva get a salary of 1,2 million$ I am sure that there is massive waste there they should put in an emergency board comprised of businessman and I am sure tgey can get their house in order
      Also what potential exposure do tgey face relating to the sexual harrasment of students which was in the news?

    5. They got sloppy and lazy. They should have never invested with Merkin based if only on the fact that he was a YU board member and there are conflict of interest issues. As it turned out Merkin himself had no idea what he was doing when it came to investing, he put on a nice suit behaved arrogantly and then took other peoples money and gave it to Bernie Madoff to do the heavy lifting. At best he was too lazy to look into what was being done with the money and at worst he knew what was going on but couldn’t stop because of the fees he was generating for himself to live a lifestyle he could not otherwise afford to live, that lifestyle e.g. fancy paintings, an apartment at 740 Park Avenue arguably the nicest most prestigious building in NYC.. What bothers me most is how when he was riding high he used to scoff at the Chassiddim living in Brooklyn. A lesson he didn’t learn from his Zaydeh whom he is named for nor his father who gave generously to Yeshivah’s etc..

    6. I have zero sympathy for Yeshiva University. Nobody twisted the arms of the board, and forced it to invest a penny with Madoff. It should have paid more attention to the complaints of the students who were physically/sexually abused!

    7. Also contributing to YU’s situation:
      ~ The passing of the Rosh HaYeshiva, the Gaon, “J.B.”
      ~ The sex scandal that was not contained and dealt with appropriately by Dr. Lamm
      ~ The decrease of the Modern Orthodoxy influence.
      ~ More ‘competition’ with the whole spectrum of Orthodox Jewish communities and worthy activities (eg: Day schools, mikvahs, Hatzalahs, Bikur Cholims, etc.)
      ~ The general decline of individual charity giving since the beginning of the “Great Recession.”

    8. What most of you don’t understand is that there was a MAJOR recession in the US in the last 5 yrs and many families couldn’t afford the $45000 a year tuition. YU has to absorb most of that.
      G-D willing the worst of the recession is over and within a few years and all the cuts they are making they will be back on their feet.
      I have a few children that are attending class right now as I write this, so I know where I speak from.

    9. I have had two children go through YU, and I too have very little sympathy for them. First, why on earth does Richard Joel have such an income? What does he do that justifies it? Second, if he is so smart, and if the board is so smart, why did they fall prey to Madoff’s scheme? I do not believe, for one minute, that people who are so smart, and if someone is making 1.24 million dollars, they must have at least some smarts, that these people did not know that Madoff was running a scheme. They knew, they were greedy, they looked away and they created a modern orthodox hierarchy that typical middle class people couldn’t live up to, thereby creating a tuition crisis, and they did it all so they could live in a way that they did not deserve to live. Now YU is paying the price and I think they deserve every bit of panic and problems that they have. They would not get one penny from me.

      • All of a sudden people should have known, ten years ago, that Madoff was a crook. The reality is that he snookered the best and the brightest. We should stop trying to feel good by rewriting history.

        • I agree that he snookered the brightest, but definitely not the best. The best are honest and that is exactly my point. I will not be convinced that all of those “brightest” people did not suspect something was wrong with the return they were getting on all their investments with Madoff. Is Merkin the best? I don’t think so. But he is certainly in the know about investments and of course he knew that Madoff was a crook.

      • i guess the SEC was also not smart and they investigated Madoff.

        like anyone knew (ofcourse you are smart enough to have known but you wont contribute or serve on their board!)

        • I am saying the opposite. I believe that all of these people includingbthe sec are all very smart and I also believe that they all knew that Madoffs return on their investments was simply impossible. But they all looked away , probably even laughed to themselves saying that it was too good to be true but did it anyway because if no one knew it was fraudulent who was it harming? Smart, honest people don’t do things that seem suspicious with honest being the operative word.

          In terms of working on a board, I’d be happy to but I’m sure no one would have me. I’m way too honest.

    10. If you are all shocked at Richard Joel’s salary at a major university, I think you would be appalled to know what the salaries of high school and seminary principals in Boro Park, Flatbush, and Manhattan are making, plus benefits, perks, etc. And they are constantly schnorring money from the parents with mandatory dinners, building funds, etc. and crying the blues that they don’t have enough cash to pay the teachers on time…

        • Actually, I get quite a few solicitations from BP and Flatbush yeshivas. My sense is that the MO get a lot more such solicitations than the chareidi communities get from YU and other MO institutions.

      • All while paying teachers peanuts.

        What people forget is that many sems and high schools and yeshivos are businesses. Privately owned businesses. Privately owned businesses with no oversight. No board of directors. No reports to share holders. No financial accountability.

        Sons and daughters need jobs. Sons in law and daughters in law nees jobs. Some send them to college. Some send them to learn a trade. Others open businesses to create jobs for them.

        Some go into the real estate business, some go into the clothing business, some go into the food business, sime go into the chinuch business.

        It is a great industry.

    11. I’d like to know how much their teacher’s salaries are. I understand that they have a non tenure track for teachers. Like any housewife, you have to live within your budget!

        • I’m a rabbi in a modern yeshiva…salaries are NOT high, we work very hard, have to put up with disrespectful students (and their parents – that’s where they learn it from) and get no support from our bosses, let alone pensions or benefits…

          Sadly, a rabbi can’t work in a public school.

          I guess BrooklynMOM has knowledge of where teacher’s salaries are high. Please spill the beans, I’ll apply right away.

    12. For those of you who have never been to the YU community or learned in its beis medrash, YU has created a frum community in WH and there is constant learning at both of its batei medrash. The frum community would clearly be worse off without YU, a place where frum men and women can learn and get the skills needed to earn a parnasa. Owning the apartment buildings has been a big part of YU’s success. I hope YU is able to address its issues w/o selling the buildings.

    13. YU is going through difficult times and none of us know why the Ribono Shel Olam has deemed this so.

      As a graduate of YU, I can personally speak of how much strength it gave me to continue in Torah UMada, while I sought a method to gain Parnasah. At YU I was influnced by Rebbes on ALL spectrums of frumkeit who all respected eachother and taught us to do so as well.

      The issue isn’t Richard Joel’s salary.

      The issue is to ensure our children have an option to pursue University education concurrently with Torah both in preparation for their livelihood and way of life to combine both Torah Umada.

      Achdut Yisrael requires us to stay together and help those Torah establishments to continue being active for positive Hashpah on our children.

      In this time of need, I am sure the leaders of YU are doing their best to stay afloat. If not financial help, they would definitely appreciate our verbal support for their Pitaron to their problems with Parnasah.

      May H-ashem help YU remain successful and allow us to display Achdut Yisrael in their time of need.

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