Dozens of public interest legal organizations have been hit financially by the collapse of Bernie Madoff's alleged $50 billion Ponzi scheme and are scrambling to make up the shortfalls.
Organizations from the Center for Constitutional Rights to the Harvard Law School International Human Rights Clinic to the American Civil Liberties Union found out before Christmas that they will have their budgets slashed by up to one-third, due to the fallout from the Madoff case.
The JEHT Foundation, which gave away $24 million last year, mostly to criminal justice advocacy and reform organizations, announced on Dec. 15 that it would be closing its doors in early 2009.
A GRINDING HALT
Robert Crane, president of the New York-based JEHT Foundation, sent an e-mail to all grantees informing them that the foundation "has stopped all grant-making effective immediately.
"Unfortunately the funds of the donors to the JEHT Foundation were managed by Bernard L. Madoff, a financial adviser who was arrested last week for defrauding investors out of billions of dollars," said Crane in the e-mail, which was posted on the organization's Web site.
"Given the circumstances, the Foundation is unable to issue any payments on unpaid grants, the unpaid portions of multi-year grants previously made, or give further consideration to any proposals that were in the pipeline," Crane said.
Established in 2000, the JEHT Foundation provides grants to organizations dedicated to improving criminal, juvenile and international justice and to groups involved in ensuring fair elections. JEHT gave out $24 million in grants last year to dozens of organizations and law school institutions around the country.
JEHT's offices were closed for the holidays. Crane could not be reached for comment.
Some of the biggest hits were taken by the ACLU, whose current grant is $680,000; Brandeis University's International Center for Ethics, Justice and Public Life, whose current grant is $600,000; the Center for International Environmental Law, whose current grant is $600,000; and Heartland Human Care Services' National Immigrant Justice Center, whose current grant is $720,000, according to the JEHT.
The Center for Constitutional Rights, halfway through a $300,000 grant, was devastated by the news.
"JEHT was a tremendous partner," said Kevi Brannelly, director of development for the center. "They were very good at strategizing and bringing groups together. They had a real sense of what their focus and purpose was and helped others become clear. Even more than the money, it was that kind of strategic partnership we will miss."
JEHT would fund programs that others would not and would do it quickly, she said. For example, when her organization decided to take on the state of New York for its policy of requiring prisoners to call their families collect -- at exorbitant prices and with fees to the state tacked on -- JEHT jumped in to help.
JEHT's funding and strategy helped the center, through public awareness, push the New York Legislature and former Governor Eliot Spitzer into changing the policy.
"JEHT really got it," Brannelly said. "You could go to them almost anytime, and they would try to help."
The center is already working to make up the funding shortfall by reaching out to individual donors and foundations.
The San Francisco-based Center for Justice and Accountability, which files lawsuits against accused human rights abusers using the Alien Tort Claims Act -- and won a $37 million judgment against a Peruvian army major, Telmo Hurtado, last March -- lost 10 percent of its budget due to the JEHT/Madoff collapse.
The good news, according to Executive Director Pamela Merchant, is that the group had just gotten its final check from a three-year $350,000 grant.
The check arrived the Friday before the scandal broke, and the center crossed its fingers that the check would clear. It did.
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Legal Public Interest Groups Hit by Madoff
Groups scramble to make up for shortfalls triggered by scandal
The National Law Journal
January 2, 2009
