Last May in my review of the $PLC’s latest financial filings I asked Will The Southern Poverty Law (And Investing) Center Return Its Madoff Money? The question arose because it had transpired the Picower family, apparently the biggest beneficiaries of the Madoff fraud (See Picower’s Madoff Take Now Estimated to Be $7.2 Billion By Jake Bernstein Propublica, October 1, 2009) had given $2.9 million to the $PLC, along with various other chic leftist causes through their Picower Foundation (See De-funder of the Left, By Matthew Vadum, American Spectator, January 5, 2009)
Now, unfortunately, the question has to be rephrased: Will the Southern Poverty Law Center continue to accept Tainted Picower money? Just before Christmas, with much fanfare, it was announced that Jeffry Picower’s widow Barbara has agreed to return all the $7.2 Billion the family had extracted from the Madoff operation over and above the $619 million originally paid in at various times. This glaringly contrasts with the $2 billion which their lawyer had been saying he expected to settle for when I wrote last May. Obviously the Picower legal situation was far worse than he thought.
The settlement leaves no doubt that Jeffry Picower was a crook, as John Graham points out over at Occidental Observer. Included in it is a $2.2 billion forfeiture to the Feds, said to be the largest civil forfeiture in history. Forfeitures can only be enforced when the money can be tied to unlawful activity. The fact that Barbara Picower agreed to this says all that needs to be said about her husband's honesty.
However, although a $7.2 billion settlement sounds like a triumph, in reality it is an outrage. Jeffry Picower was not a retiree or a grant-disbursing charity. He was an extremely active and astute investor with capital gains in his Goldman Sachs account of $4.5 billion at the time of his death, according to the Financial Times. Making money like this needs capital — which was lavishly supplied by huge draw downs from the Madoff firm. His wife and daughter get to keep $225 million and a new charitable foundation may be funded with billions. Nathan Vardi remarked at Forbes:
It appears that Barbara, 67, will resume her life as a philanthropic heavyweight as chairwoman…So while Picower’s widow is agreeing to cough up $7.2 billion, which is equal to the net amount Picower took out of the Ponzi scheme, the returns Picower was able to achieve by investing those funds will continue to be controlled by his estate. In other words, Jeffry Picower, who used Madoff’s investment firm like a bank, got a $7.2 billion no-interest loan from other Madoff investors.
As Graham points out, suppliers of risk capital to hedge funds generally expect 80% of any profits. Why the Trustee - mercilessly aggressive in other cases—is allowing this atrocity is not easy to explain—like much else about the Madoff matter.
However there is a long tradition in politics of not taking ethically questionable money. VDARE.com looks forward to the $PLC announcement that Picower’s loot is not an acceptable funding source for them.