By Vernon Silver and David Glovin
Bloomberg
February 13, 2009
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Feb. 13 (Bloomberg) -- Bernard Madoff may be testing the faith of followers of the patron saint of moralists and confessors, who sank money into the investment funds of the alleged mastermind of the largest Ponzi scheme in history.
Roman Catholic priests and institutions linked to the Redemptorist society in the U.S. and Italy appear on a 162-page client list of Bernard L. Madoff Investment Securities LLC, filed in U.S. Bankruptcy Court in Manhattan on Feb. 4. The religious order follows the teachings of Saint Alphonsus Liguori who preached about ethical behavior.
“The world is very hard, particularly in the manner of money,” said Stan Wrobel, a priest and treasurer at the Redemptorist headquarters in Rome. “We can only pray for the people who have been damaged and for the family of Madoff because they may need spiritual help, too.”
The 70-year-old investment adviser was arrested Dec. 11, 2008, on charges of defrauding investors of $50 billion. Madoff’s firm also worked with Jewish charities, universities and nonprofit groups including the Boston-based Carl and Ruth Shapiro Family Foundation; Yeshiva University in Manhattan; and the Jewish Federation of Greater Los Angeles
The Redemptorists, whose 5,400 priests and brothers work in 78 countries, haven’t disclosed how much they may have lost and are still tallying the sum, according to Treasurer Edmund Faliskie at the group’s Northeast U.S. office in Brooklyn, New York.
‘Significant’ Investment
A “significant” amount of money was invested starting in 1992, said Marion Lunt, a spokeswoman for the Redemptorist fathers in the U.S. The money was used to fund scholarships for inner-city children, care for elderly priests and other charitable causes, she said. Lunt declined to provide further financial details.
“We’re working with legal counsel and our accountant and trying to figure out how to go forward,” said Faliskie, a priest who became treasurer in August.
The Madoff scandal and its implications for business ethics would be fodder for the Redemptorists’ meditation, even if they hadn’t been a victim, said Martin McKeever, president of the Alphonsian Academy, an institute of moral theology in Rome.
Business ethics are “an important question for moral theology,” said McKeever, a Redemptorist priest who specializes in political theory. The topic has been studied for decades, “apart from this particular episode.”
The society’s headquarters invested with Madoff through the group’s U.S. members, according to a faxed statement from the Rome office. Returns on the investment helped fund tsunami relief in Asia in 2004, and hurricane aid to Haiti and Cuba in 2008, the statement said.
Saint Thomas Diocese
Other investors linked to the society include a pension fund at the Redemptorist Fathers’ regional headquarters in Brooklyn; the Saint Thomas diocese in the U.S. Virgin Islands and priests in Baltimore; New Smyrna Beach, Florida; and San Juan, Puerto Rico, according to the client list, which covered the year before Madoff’s arrest and was submitted by the trustee liquidating the investment adviser’s assets.
“It would appear that much of the savings of the diocese and the endowment funds of St. Mary and St. Patrick schools have apparently been lost,” Bishop Herbert Bevard, who leads the Saint Thomas diocese, told parishioners in a Dec. 19 letter.
Investments with Madoff date back “several decades” and began with the Caribbean diocese’s Saint Patrick Church on the island of Saint Croix, the bishop said. Redemptorist priests have served the diocese since 1856.
No ‘Warning Flags’
“The returns that Mr. Madoff’s firm provided were consistently good over the years -- but not so good that they raised warning flags,” Bevard wrote.
The Congregation of the Most Holy Redeemer, known as the Redemptorists, was founded by Alphonsus Liguori, who was born in 1696 to a noble family in Marianella, near Naples. He began his career as a lawyer. To his father’s disappointment, he abandoned his civil practice to become a priest at the age of 30, according to a biography published by the group.
In 1950, Pope Pius XII named Saint Alphonsus the patron saint of moralists and confessors.
Madoff was charged by federal prosecutors with securities fraud for an alleged ruse that paid off early investors with money from later participants. He hasn’t formally responded to the charge and faces up to 20 years in prison if convicted.
At our Lady of Perpetual Help, a Brooklyn, New York, church that dominates a block of two-family houses, Father Joseph Tizio, 59, says the Redemptorists, like all Catholic faiths, believe forgiveness is possible, even for Madoff.
Tizio says it’s not his place to grant it.
“Only God can forgive,” said Tizio in an interview inside a church that caters to Spanish, Chinese and Vietnamese immigrants. “I can’t forgive Bernie Madoff anything. I would never presume to read his heart.”
To contact the reporter on this story: Vernon Silver in Rome at vtsilver@bloomberg.net, David Glovin in Manhattan federal court at dglovin@bloomberg.net
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