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Madoff Fraud Bankrupts JEHT Foundation, Hurts Criminal Justice Reform Efforts

Madoff Fraud Bankrupts JEHT Foundation, Hurts Criminal Justice Reform Efforts

by Matt Clarke

Wall Street mogul Bernard Madoff’s $50 billion Ponzi scheme has led to the closure of a New York-based charity devoted to reducing the booming prison population while maintaining public safety. The Justice, Equality, Human dignity and Tolerance (JEHT) Foundation shut down at the end of January 2009 after it lost its operating capital, which was invested with Madoff’s firm.

“I’m not sure people will ever appreciate what [JEHT] did to make our streets safer and make the country safer,” said Kansas Department of Corrections secretary Roger Werholz. He should know, as his department received a $4.7 million grant from JEHT for a pilot program to help former prisoners find jobs, housing and transportation. The program is credited with reducing recidivism by 33% and allowing Kansas to delay new prison construction. All but $700,000 of the grant had been paid to the Kansas DOC before the foundation was forced to close.

JEHT donated $6 million to Michigan for a similar anti-recidivism program, the Michigan Prisoner Reentry Initiative, and had approved $1.6 million in new funding that was lost as a result of Madoff’s fraud. According to Dennis Schrantz, deputy director of the Michigan DOC, the loss to the state was much greater than the money. JEHT acted as a partner “in the truest sense of the word,” he said, helping to plan projects and participating in their implementation instead of simply providing grant money.

The JEHT Foundation had also made a $573,000 grant to Wisconsin for a study on improving criminal justice administration in that state’s court system; $322,000 of the funding was lost due to the foundation’s abrupt closure. The primary element of JEHT’s funding strategy was to give money to government agencies to do what they should be doing.

JEHT further supported programs related to juvenile justice and election reform. More controversial were the projects it funded opposing the death penalty and supporting sentencing reform. The foundation had made grants to the Death Penalty Information Center, the Sentencing Project, Families Against Mandatory Minimums, the Equal Justice Initiative, the Vera Institute of Justice, the ACLU and the Innocence Project of Texas, among many others. Since it was formed in 2000, the foundation had given away more than $62 million – primarily to criminal justice-related initiatives. The JEHT Foundation never funded Prison Legal News despite repeated requests though.

The worst aspect of JEHT’s collapse is that there are few other major funding organizations engaged in similar work. The end of the JEHT Foundation is indeed a sad event for those interested in criminal justice policy reform.

“The issues the foundation addressed received very limited philanthropic support and the loss of the foundation’s funding and leadership will cause significant pain and disruption of the work for many dedicated people and organizations,” wrote JEHT Foundation president and CEO Robert Crane.

After Madoff’s massive Ponzi scheme unraveled late last year, he pleaded guilty to 11 felony charges in federal court on March 12, 2009. The U.S. Court of Appeals for the Second Circuit has rejected his request to be released on bail prior to his sentencing hearing, which is scheduled for June 16.

Ironically, the JEHT Foundation funded criminal justice reform efforts that Madoff will not be able to benefit from when he is sent to prison, since his financial fraud resulted in the foundation’s demise. The New York-based Rockit Fund, a smaller grant organization that supported juvenile justice and civil liberties programs, also closed due to lost investments with Madoff’s firm.


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