The fallout from the arrest of Wall Street legend Bernard Madoff is continuing to be felt across the banking and philanthropic worlds. Madoff was arrested last week on fraud charges and admitted to running a pyramid scheme that scammed investors out of an estimated $50 billion. The fraud could be bigger than the Enron scandal of 2001. Several non-profits and foundations are being forced to close because their entire endowments have been wiped out. One victim is the New York-based JEHT Foundation, which was dedicated to electoral reform and improving criminal justice. The foundation has funded the work of the Innocence Project, Human Rights Watch and the Vera Institute of Justice.

Attorney Mark Mulholland: “Our sense of it at this point is that it’s bigger than Enron. We think the ripple effect, we think the indirect investor losses, we think the impact on the financial community is ultimately going to be bigger than Enron. This is staggering. It’s extraordinary. It’s breathtaking, what has happened here.”

For decades, Bernard L. Madoff Investment Securities had been one of the top market maker firms on Wall Street. An old video of Madoff has come to light where he told an audience it’s tough to skirt the law.

Bernard Madoff: “In today’s regulatory environment, it’s virtually impossible to violate rules. And this is something the public really doesn’t understand. And if you read things in the newspaper and you see somebody, you know, violate a rule, you say, well, you know, they’re always doing this. But it’s impossible for you to go — for a violation to go undetected, certainly not for a considerable period of time.”

Investigators now accuse Bernard Madoff of doing just that.
On Capitol Hill, Democrats are attempting to distance themselves from Madoff, who has donated over $150,000 to Democratic politicians and party committees over the past decade. Democratic Senators Charles Schumer of New York and Frank Lautenberg of New Jersey announced they would shed campaign contributions from Madoff.