BUSINESS WEEK---CIRCA 2003
EXCERPT Madoff's pal Ira Rennert's tale is instructive at a time when a growing legion of discredited star analysts and bankers, who symbolize the excesses of the '90s, are being banned from the industry or are under investigation. As Rennert's career shows, people who are penalized by the securities industry can easily--and legally--slip into other financial services and continue to take funds from investors.
Rennert refashioned himself as a consultant for the next 11 years, according to 2001 Who's Who in America. But it's not clear what type of consulting he did. In 1975, he emerged as a financier, arranging small leveraged buyouts and amassing an eclectic collection of unwanted companies that made everything from pet cages to butcher blocks.
In the late 1980s, Rennert became one of Wall Street's favored buyers of companies that no one else wanted. His first big deal was in 1988, when Renco bought a Warren (Ohio) steel company from its parent, LTV Steel Co., which was in bankruptcy, for $140 million. He renamed it WCI Steel Inc. and turned it around with the help of $250 million in junk bonds.
(Circa 2003) ......with the military buildup in the Mideast boosting demand for his Humvees and with the H2 selling well, it was a good time to sell. J.P. Morgan Chase & Co. is pitching Rennert's company---AM General in partnership with Arnold Schwarzenegger----to private investment funds, including the Carlyle Group and Chicago-based Madison Dearborn Partners.
General Motors Corp. has an option to buy 40% at the market price.
Rennert has done very well for himself. (1) He owns a plush duplex apartment furnished with antiques and Impressionist paintings on Manhattan's Park Avenue near his Rockefeller Center headquarters. (2) He has a palatial home in Israel, (3) a Gulfstream 5 jet, (4) and built a palatial mansion on 64.8 acres in tony Southampton, NY, built for an estimated $100 million (PICS below). The 100,000-square-foot complex angered neighbors and inspired James Brady's novel, The House that Ate the Hamptons. Hamptonites complain the palace is actually a synagogue/residence/yeshiva for Orthodox religionists.
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Madoff's buddy Ira Rennert---is the owner of this obscenely palatial Hampton residence. Merkin and Madoff served together on the board of Yeshiva University, where Merkin Chaired the Investment Committee and Madoff was treasurer.
Madoff also chaired the University's Sy Syms' School of Business. (Syms is a well-known retailer and a director of the Israel Discount Bank---the US DOJ leaned on the Israel Discount Bank after finding evidence of money laundering.) Syms and his daughter are seen on PBS pushing programs they financed with a foundation.
Yeshiva University is a huge complex, and Orthodox religious stronghold---it maintains four campuses in New York City and a campus in Israel: along with dormitories, a library, a hospital and other medical facilities; several Graduate and Professional Schools, rabbinical schools, a museum, academic centers and institutes for high school level students, and centers for Israeli studies in New York, and in Israel, etc, etc, etc.
Another Madoffian----J Ezra Merkin--- his father Hermann, was a fur-trader who became director of the Israel Discount Bank of New York. The US DOJ leaned on the Israel Discount Bank after finding evidence of money laundering.
This has tax evasion written all over it. Hamptonites complain this astoundingly palatial mega-mansion in the posh Hamptons is actually a "synagogue-residence-yeshiva" for Orthodox Judaism students. The complex---which rivals Versailles and Buckingham Palace----was built by Fifth Avenue Synagogue board chair Ira Rennert. The average "hate-filled anti-Semite" might ask: How can Orthodox religionists be designated "disadvantaged minorities" when they are investing hundreds of millions of dollars w/ Madoff?
BGRND Orthodox Judaism was designated a "disadvantaged minority" under Lyndon Johnson's "Great Society." This meant that Orthodox became beneficiaries of millions upon millions of tax dollars----federal community development funds. Federal and city assistance received over the years include CETA (Comprehensive Employment Training Act) monies, Section 8 housing assistance, school meal funds, Headstart, HUD grants, and low interest loans. In 1984, federal aid was expanded when the federal government included Orthodox in a priority group of six disadvantaged minorities recognized by all federal agencies.