By Tom Dalton
SALEM — The Robert I. Lappin Charitable Foundation in Salem was forced to shut down on Friday, Dec. 12, the day after financier Bernard Madoff was arrested in New York on charges of running an alleged $50 billion Ponzi scheme. The foundation had invested all its funds with Madoff.
Lappin, 86, the owner of Shetland Properties, a waterfront office park in Salem, donated more than $1.5 million annually to Jewish programs locally and nationally, and to many other nonprofits. He responded by e-mail to questions from The Salem News.
Q & A with Robert Lappin
Q. What is the status of the Lappin Foundation?
A. The Foundation is not dissolving at this time. However, all but two programs have ceased because the money to fund the programs is gone. The staff of seven talented professionals who ran the programs has been terminated. My foundation lost about $8 million, with more myself.
Q. What has happened to programs supported by the foundation, particularly Youth To Israel?
A. As of now, Youth to Israel has been canceled. However, the Jewish Federation of the North Shore is planning to conduct an emergency fundraising campaign during the month of January to raise funds to send some of the 100 Jewish teens who applied to this year's program to Israel. The number of teens who go to Israel will depend on the amount of funds raised. It costs approximately $5,500 per teen for the Youth to Israel program.
Teachers to Israel, which was scheduled to be in Israel from February 12-23, 2009, has been canceled. Women to Israel is going to Israel in April, since it is not a program funded by the foundation. We simply helped to organize the group.
At this time, Introduction to Judaism, The Mothers Circle, and Push the Pushke (a charity program) are just three of more than a dozen programs that are active. Volunteers are keeping these programs going, and an anonymous donor is funding the cost of three Hebrew teachers for Introduction to Judaism.
I am not sure which programs, if any, will resume. I am in the process of assessing what can be salvaged.
Q. How are you and your family doing?
A. We are holding up, but this is a very difficult and emotional time for us. Aside from my family, the work of the foundation has been one of the greatest joys in my life. I dedicated decades to the Jewish youth of our community and beyond, which is why I am heartsick and devastated about the situation.
Q. How did you first hear the news of Madoff?
A. I was in Florida. The evening of Thursday, Dec. 11, I received a call from an employee informing me that Bernard Madoff had been arrested for fraud, having confessed that he was running a Ponzi scheme. I was stunned.
Q. How long have you known Madoff?
A. I met with Mr. Madoff once in 1998, and again in 2003 in Palm Beach, Florida. I considered him to be a paragon of virtue, and his strategy a paradigm for conservative investing. I had a nodding acquaintance with him.
Q. How long have you been investing with Madoff, and did you lose your own money?
A. I began investing with him in 1991. I lost a significant amount of personal money with Mr. Madoff.
Q. How could someone so respected allegedly do something like this?
A. I believe he started out as a reputable investor. Then he got in over his head, and he didn't know how to get out of a bad situation.
Q. Can anything be done to save your employees' 401ks? Is there government or other protection?
A. Government protection is problematic, at best. Although it is not my legal obligation to reimburse anyone for losses caused by Mr. Madoff's fraud, I feel the pain of my employees' losses along with my own. I feel an abiding loyalty to all the employees of Shetland Park. For this reason, in the next few weeks, I will make a proposal to all participants in the 401k plan, that will address, at least in part, the losses suffered by all participants in the plan.
Q. Is there any impact on Shetland Properties?
A. The operation of Shetland Properties is not impacted by this disaster. Madoff's impact on the employees of Shetland Park is regarding their 401k plans, which I already addressed.
Q. Do you plan legal action?
A. I am exploring my options.
Q. Many people in the Jewish community and outside are stepping forward to offer help. What are you telling them?
A. I am grateful for the expressions of support and comfort by so many in our community. There have been a couple of significant financial commitments made to salvage this year's Youth to Israel program, or at least part of it.
If people want to donate money to the Youth to Israel program or the other Lappin programs, they can send a check made payable to the Jewish Federation of the North Shore, which will establish a separate account for donations for Youth to Israel and the other Lappin Foundation programs. People should indicate on the check if they want the donation to be applied to "Youth 2 Israel" or "Lappin Programs." Checks can be sent to Lappin Foundation, 29 Congress St., Salem, MA 01970. For more information about donating to the foundation, people can contact Debbie Coltin at 978-740-4428 or e-mail dcoltin@rilcf.org.
If people are interested in donating funds to restart a particular program, such as The PJ Library or Rekindle Shabbat, they can contact Debbie Coltin for more information.
Q. Is there anything else you would like to say?
A. I want to thank the community for its outpouring of love, support and gratitude at this most difficult time. My hope is that families will continue to use the experiences that my foundation provided over the past decade to continue building Jewish pride in their children. I have been blessed to be in a position to give to the North Shore community, to Jews and gentiles, and it breaks my heart that the actions of one man are hurting so many lives, here and around the world.
