Wall Street scandal tramples a community's benefactors

By Tom Dalton and Alan Burke The Robert I. Lappin Charitable Foundation operated out of a little green building on the edge of the South River. Its reach has gone far beyond its walls.



It has sent about 2,000 teenagers to Israel, supported dozens of programs at area temples and Jewish organizations, and given money to programs as far away as Texas.



It has welcomed Jewish babies born to families on Massachusetts' North Shore with gifts. It has helped non-Jewish mothers in interfaith marriages raise their children Jewish. It broke into the Guinness Book two years ago when it organized a record ensemble of 800 people to simultaneously blow shofars, the rams horns sounded at the start of the Jewish new year.



Thus, when news broke that the Lappin Foundation was shut down, a victim of the still unraveling Wall Street scandal involving investor Bernard Madoff, ripples were felt far and wide.



"This has really shaken the whole community in a very big way," said Bette Keva, editor of The Jewish Journal, which covers the Jewish community in the North Shore region, north of Boston.



The foundation's five-member staff was let go. Programs offered at its office were discontinued.



"It's very emotional," a stunned director Deborah Coltin said last Friday, one day after agents from the FBI and Securities and Exchange Commission arrested Madoff and asked a court to seize his fund's assets.



"It's been a terrible day," said the foundation's spokeswoman, Amy Powell. "We do unbelievable work, and we touch so many lives, and it's devastating to have to stop doing it."



The government says Madoff confessed to "one big lie" and operated his fund as a Ponzi scheme, which earns no real profit but pays early investors with the principal of those newly recruited into the fund. Madoff estimated his losses reached $50 billion, according to the government, the largest fraud in Wall Street history.



The government froze Madoff's remaining assets - the first indication to most of his clients that something was wrong. Now, almost a week later, investors throughout the country are still counting their losses. Many are charities that trusted large portions of their endowments to Madoff.



A few, such as the Lappin foundation, were forced to close immediately. Madoff was apparently managing all of the Salem charity's $7 million endowment.



This week, rabbis on the North Shore were meeting with a Lappin foundation official to discuss ways to support the nonprofit's programs.



"We are meeting to brainstorm ways we can honor Mr. and Mrs. Lappin and their wonderful foundation ... as well as find ways to keep the messages of the Lappin Foundation" alive, Rabbi Baruch HaLevi of Congregation Shirat Hayam wrote in an e-mail.



The Jewish Federation of the North Shore also is rallying behind Lappin, who has been one of its major backers. There has been talk of fundraising to support some of the foundation's programs.



"We'd like to talk to him about letting the federation take on an effort to capture all of this outpouring of support and concern for him and his programs," said Robert Salter, the federation president.



Lappin, 83, lives in Swampscott, a town adjacent to Salem, and is one of the region's leading philanthropists. Over the years he and his foundations have given tens of millions to Jewish causes, with the goal "to keep our children Jewish."



His father, John Lappin, was a peddler and Talmudic scholar who arrived from Jerusalem in 1910. He suffered what now seems an ironic setback, his son recalled in an eariler interview.



"He accumulated some money, which was under the mattress in 1914," Lappin said, referring to the year of the great fire that destroyed much of downtown Salem. "He lost it all. ... It was not inconsiderable. He had done well."



John Lappin eventually recovered. And his son created a reputation for devotion to the community where the family settled.



"He is an extremely magnanimous and kindhearted person," said Rabbi Yossi Lipsker of Chabad Lubavitch of the North Shore. "He just has a deep love for this community."



The foundation gave out about $1.5 million in 2007, according to an annual report. Donations included more than $600,000 to two major programs, Youth to Israel and Teachers to Israel. The latter, a new program, has drawn the support of the Israeli government.



The foundation also gives money to community centers, temple programs, a Jewish school and other groups. It has sent money to Youth to Israel programs in Florida, Kansas, Illinois and Texas.



Lappin could not be reached for comment but made a written statement last week announcing the fate of his foundation: "It is with a heavy heart that I make this announcement. The foundation's programs have touched thousands of lives over many years in our efforts to help keep our children Jewish."



Coltin, the foundation's director, reported he was "sad and devastated."



"It's very emotional. On so many levels. Personally. Professionally. For our Jewish community. For Mr. Lappin, who is an angel on this Earth for all he's given," she said.



Those who benefitted from his programs shared his grief.



"I'm just shaken and horrified and saddened," said Rebecca Gray, 17, who went on the last trip to Israel organized by the foundation. She spent the visit amazed at all she learned. "It was life-changing. It was actually life-changing."



She was heartened to know her three younger sisters would one day get the chance to do the same thing, though now she wonders whether they will have the opportunity.



"I can't stop thinking about it," she said.



Lipsker said the community is still "absorbing the shock."



"I'm sure, in the coming days, the leadership of the (Jewish) community will come together in a positive way and respond," he said. "I think, right now, it's important to give the Lappins some space ... and just let them know that this community is very much behind them."



Tom Dalton and Alan Burke are staff writers for The Salem (Mass.) News.