Ponzi scheme wipes out foundation that gave to U.

Thursday, January 22, 2009

A philanthropic organization that has awarded the University hundreds of thousands of dollars – including a $355,937 grant currently in use – has folded due to substantial ties to Bernard Madoff’s alleged hedge fund scam.

The JEHT Foundation, a New York City non-profit that has awarded Brown’s Center for Alcohol and Addiction Studies over $500,000 in grants since 2004, will shut down at the end of January as a result of Madoff’s alleged Ponzi scheme. JEHT’s current grant, which is funding a project at the center until this May, has not been affected, according to Director of University Communications Mark Nickel.

“The grant has been received and the work will be completed,” Nickel said. The University received all funds from the grant before Dec. 15 of last year, when the JEHT Foundation’s Web site announced the cessation of all grants, four days after Madoff’s arrest for fraud. Madoff managed the money of Kenneth and Jeanne Levy-Church, the foundation’s founders.

The latest grant to the addiction studies center, awarded by JEHT’s Criminal Justice Program, is funding the development of a guide for lawyers and judges dealing with drug addicts in the criminal justice system, Nickel said. The project is scheduled to be completed by May of this year, he said.

In addition to the current $355,937 grant, JEHT – which derives its name from its “core values,” justice, equality, human dignity and tolerance – awarded the center $166,500 in 2004.

According to JEHT’s Web site, that grant funded “a collaboration between doctors and lawyers to conduct research and disseminate information on public policies and practices related to addiction.”

In addition to the JEHT Foundation’s grant, Brown received a $150,000 donation from the Hollywood Director Stephen Spielberg’s P’12 Wunderkinder Foundation in 2007, according to a Dec. 27 article in the Providence Journal. Spielberg and his foundation are widely reported to have suffered losses due to the Madoff scandal.

Vice President for Development Kristin Davitt ’88 wrote in an e-mail to The Herald that she could not comment on the specifics of any donation.

While the Madoff scandal has affected other American universities, Brown appears to have escaped any direct consequences. “We believe the Madoff scandal will have no direct effect on philanthropy to Brown,” Davitt wrote in the e-mail. The Herald reported Jan. 21 that the University had not invested any funds with Madoff’s hedge fund.

The Madoff scandal has impacted the Jewish philanthropic community in particular, but Brown/RISD Hillel has not been affected, Executive Director Megan Nesbitt said. She said Hillel has a small endowment invested in money market accounts and has no financial ties to Madoff. She added that she believes Hillel’s donors also had no ties to Madoff, and that the scandal will not affect future donations.

“We were very fortunate,” Nesbitt said.