Lautenberg foundation hit by Madoff scheme

Sen. Frank Lautenberg (D-N.J.) was among the victims of Wall Street tycoon Bernie Madoff, who was arrested last week in what may turn out to be the largest fraud case in history.

Madoff, the former chairman of NASDAQ and a legend among stock pickers for his high annual returns, was arrested this week after admitting to what he described as a giant Ponzi scheme. Some estimates suggest investors with Madoff’s firm have lost more than $50 billion.

{mosads}Forms filed with the IRS in 2007 show Lautenberg’s charitable foundation had significant assets invested with Madoff Investment Securities, money that is now as good as gone.

As of the end of the 2006 calendar year, the Lautenberg Foundation had nearly $12.8 million invested with Madoff, along with just over $1 million in other assets.

The same year, the foundation handed out more than $765,000 to charities across the country. Over the years, Lautenberg has directed millions of dollars to organizations like the Breast Cancer Research Foundation, Catholic Relief Services and the NAACP.

Scott Mulhauser, a senior advisor to Lautenberg, would not comment on the loss except to confirm that it had occurred.

“Sen. Lautenberg was an investor in Bernard Madoff’s investment fund, primarily in the form of his family’s charitable foundation,” Mulhauser said.

As part of the fraud, Madoff issued detailed statements to clients claiming they held positions in prominent and lucrative investments. Given that the statements were largely false, it makes it difficult to identify exactly how much Lautenberg has lost personally. His Senate disclosure reports do not list investments with Madoff, though Lautenberg could have reported funds Madoff misled him into believing he held.

Lautenberg is still worth between $54 million and $126 million, according to the latest forms filed with the Senate Ethics Committee.

Victims of Madoff’s widespread fraud range from the worlds of academia to charity to some of the largest businesses in the world. Businessman Mort Zuckerman, who owns the New York Daily News and U.S. News and World Report; a foundation run by Nobel Laureate Elie Wiesel; Dreamworks CEO Jeffrey Katzenberg and even the government of Fairfield County, Conn., were among those who lost a significant amount of money, according to various media reports.

Several charitable foundations with investments in the Madoff funds have closed their doors already.

Lautenberg and Sen. Charles Schumer (D-N.Y.) announced Monday
that they would give thousands of dollars in campaign contributions from Madoff
to charity. Since 1992, Madoff and his wife have given more than $238,000 to
candidates and political action committees, according to the Center for
Responsive Politics.

The Democratic Senatorial Campaign Committee has been the
biggest recipient of Madoff’s largesse, raking in $102,000 in contributions
since 1992.