Thursday, December 16, 2010

Talmudic Mentality and Spirit of Lawlessness in the case of Rabbi Balkany

The Talmudic Mentality and the Spirit of Lawlessness
An Introduction to Allison Hoffman’s investigative report, "Tribal Allegiance"
by Michael Hoffman

In observing this trial I was not only interested in the networks of corruption, of which Talmudic Judaics are often the leaders and main players, but of the fantastic interlocking relationships with power which Judaics on all sides of the case, from the prosecution to the defense, possessed. Nearly everyone seems to be an impressively-credentially graduate of a presitgious yeshiva or law school; from those institutions it's on to an elite investment firm, a Supreme Court clerkship or some kind of White House appointment. The defendant, Rabbi Balkany, was close to Vice-President Dan Quayle and had a seat on the National Republican Senatorial Committee. Jason Furman, the brother of Balkany’s prosecutor, Jesse Furman, is deputy director of President Obama’s National Economic Council.

A critic might opine that the account of the decline and fall of Rabbi Balkany is testimony to the fact that in America we really are all equal, and that being a member of "The Tribe" is no guarantee of privilege or immunity.

My response would be say that this is incredibly naive, if not disingenous. Talmudists are prosecuted and jailed only when their crimes become so visibly outrageous they threaten the entire edifice of La Kosher Nostra. Out-of-control, avaricious renegades are put in their place so as to preserve the American operations of the enterprise itself.

The signature symbol in this stagecraft that is part Merchant of Venice and wholly Talmudic, is glimpsed at the point at which the rabbi's wife spots the garish, masonic "Great Seal of the United States" hanging on the wall of the Federal courtroom, where images of Jesus Christ and the crucifix are of course banned. She points approvingly at the hexagon (the six-pointed, misnamed "Star of David") within the Great Seal, as if to say, 'Like most everything else in America, we own this place too.'

Lastly, we are duty bound to note that we can take no credit for being related to the author of this investigative piece, Allison Hoffman.

EXCERPTS:

"As one person told me, (Rabbi) Balkany is the kind of guy who will try to find a shortcut if you tell him to cross the street at the light."

"Balkany’s brother-in-law, Sholom Rubashkin, was sentenced last summer to 27 years in prison on charges of financial fraud.”

“You know, my heart goes out, that a man like Cohen, who obviously has made it, he’s probably even a kohane because his name is Cohen.”

“...at the federal prison camp in Otisville, N.Y., an hour or so north of Manhattan...the Bureau of Prisons has tailored to suit the special dietary and other needs of Hasidic inmates. 'It’s like a bungalow colony up there in the Catskills,' joked Gary Friedman..."

One of the people who came to support Balkany in court every day was Chesed Halberstam, a long-bearded, bespectacled man who spent 17 years as a personal aide to the wife of Lubavitcher Rebbe Menachem Mendel Schneerson....Every morning, he took a bound copy of the Torah that had once belonged to the rebbe out of a black leather carrying case, handed it to Balkany, and then parked himself in the front row, just behind the defense table. I asked him why he took it from Balkany every time court recessed, instead of lending it to the rabbi for the duration of the trial. “It’s worth a great deal, so I don’t let it out of my sight,” explained Halberstam. He added that he hoped that the book might bring Balkany luck, even if he only held on to it a few hours each day. (Emphasis supplied by Michael Hoffman)

Courtroom 11B in the white-marble Daniel Patrick Moynihan Federal Courthouse, near City Hall, has hanging on its back wall a plaque of the Great Seal of the United States: an image of an eagle crowned by 13 tiny stars representing the original colonies, arranged in the pattern of a Star of David. On the second day of the trial, Sarah Balkany, a short, plump woman who sat through much of the trial studying her own small prayer book, spotted it, smiled, and leaned over to point it out to one of her daughters, Rosie, who smiled too and patted her mother’s hand.

Ironically, it was the government that invoked the principles of Jewish law before the jury. “Well-reputed, prominent members of his community gave praise to Rabbi Balkany, and the acknowledgment, this acknowledgment had a Hebrew name,” Marc Berger, the 36-year-old deputy head of the securities task force in the U.S. attorney’s office, explained in his closing. “It was called a 'hakorus hatov”(recognizing when someone is owed a debt of gratitude --Michael Hoffman).

Rabbi Balkany's lawyer Brafman stood up to give his defense speech:

Brafman is famous for his courtroom prowess—a performer so worth seeing that other lawyers stopped in to watch him. At five feet six inches, he barely reaches Berger’s shoulder, but as he took the podium, his barrel chest puffed out, and he seemed to fill the room. He adjusted his French cuffs and began. “Just so we’re clear, lying on those tapes, everybody lied,” he said. “There should be no question in your mind that everybody lied. Klotz lied to Balkany. Balkany lied to Klotz.” Brafman backed into the middle of the courtroom, away from his notes, speaking in increasingly outraged tones. “Are we nuts? We’re not nuts. None of us are nuts. I don’t think we’re nuts. But we’re listening to conversations that are nuts,” Brafman argued. “You can’t just convict Rabbi Balkany because he had some stupid conversations that the government has suggested to you show that he’s guilty of a crime,” he went on. “He did not act with the requisite criminal knowledge or intent that these crimes will require you to find beyond a reasonable doubt.”

Brafman paused, reaching into a repertoire that stretches back to his early days working for Robert Morgenthau in the Manhattan D.A.’s office. “Now, you have an argument with somebody, even somebody you love, whoever gets the last word, man, that’s a powerful moment, and that’s the advantage the government gets, because they have the disadvantage of having to prove guilt beyond a reasonable doubt,” Brafman said. “But here is my thought on that, and I think I’m right, and I hope you agree. They don’t have the last word. You do.” Let’s fight the man, was what he meant—you, me, and the rabbi against Steve Cohen and the government.

Jesse Furman got up to give the government’s response. Furman, a mild 38-year-old, is Brafman’s antithesis in almost every way: rumpled where Brafman is immaculately tailored, precisely spoken where Brafman releases Brooklyn-inflected torrents of words, an Upper West Sider who attends the traditional-egalitarian Ansche Chesed synagogue while Brafman is a trustee of Beth Sholom Synagogue in Lawrence, on Long Island. Furman’s father, Jay, is a successful real estate developer active in prominent New York and Jewish charities, while his mother, Gail, is a well-known Democratic fundraiser. His brother, Jason [29], is deputy director of President Barack Obama’s National Economic Council. Jesse Furman went from Harvard to Yale Law and clerked for Supreme Court Justice David Souter.

Tribal Allegiance
A Brooklyn rabbi thought he could swindle hedge-fund king Steven Cohen by playing on his Judaism. It was a bad bet
By Allison Hoffman | Tablet | Dec 16, 2010 

Steven A. Cohen, the billionaire [1] hedge-fund manager, doesn’t take cold calls. If you dial the headquarters of Cohen’s $12 billion fund, SAC Capital Advisors, in Stamford, Connecticut, a pleasant-voiced receptionist will kindly offer to take a message, which Cohen’s assistant will screen without disturbing her boss, who typically spends the hours of the trading day deeply engrossed in the numbers flashing across the eight screens mounted at his desk. He communicates with his fellow traders through desktop squawk boxes, and they watch him via an in-house video feed referred to as “the Steve Cam [2].”

A phone message deemed sufficiently mysterious might be passed to SAC’s general counsel, Peter Nussbaum, which is how Nussbaum wound up talking last winter to an ultra-Orthodox rabbi named Milton Balkany, who said he had information that was potentially damaging to SAC. The rabbi had, wittingly or not, called on a December day when everyone in Cohen’s orbit was on high alert. The morning’s New York Times featured a story [3] about rumors linking SAC to the government’s investigation of a rival fund, the Galleon Group—which has since blossomed into one of the largest insider-trading probes in Wall Street history. The same afternoon, Cohen’s ex-wife, Patricia, filed a sensational civil suit [4] alleging that he had traded on inside information in the 1980s, while they were still married. (Cohen has moved for dismissal.)

Balkany introduced himself as the dean of a Jewish girls’ school in Brooklyn. He may as well have been calling from another planet—one governed by shtetl values dictating that Jews should accord a high degree of loyalty to each other. The rabbi claimed that, in the course of his work counseling Jewish prisoners, he had learned that the government was pressuring an inmate to give up information about Cohen, and that, as a fellow Jew, he didn’t want to see harm befall the hedge-fund manager, even though they didn’t know each other. It quickly emerged that Balkany wanted something in return—$2 million in cash for his struggling school, Bais Yaakov of Midwood, and a $2 million loan for his former yeshiva, Mesivta Torah Vodaath, one of the oldest and largest of Brooklyn’s ultra-Orthodox high schools. And one more thing: He wanted a 20-minute meeting with Cohen for his son-in-law, an aspiring financier who dreamed of pitching his idol on an investment idea.

The conversation with Nussbaum set off a chain of events that ultimately led to Balkany, a onetime power broker known as “the Brooklyn Bundler,” being found guilty in federal court last month of extortion, blackmail, fraud, and making false statements to a government agent. His trial, in a wood-paneled courtroom in lower Manhattan, played out as a kind of Jewish commedia dell’arte. Balkany, the bearded rabbi, was dressed in customary dark suits accessorized with a black velvet yarmulke. He shared the defense table with a Brooklyn boy made good: the lawyer Benjamin Brafman, a Modern Orthodox Jew who is famous for representing high-profile celebrities like Jay-Z, Sean Combs, and Plaxico Burress. The government’s case was argued by Marc Berger and Jesse Furman, both Jewish and Ivy League-educated assistant U.S. attorneys. In the public gallery, Balkany’s wife and a rotating cast of his 13 sons and daughters made up a kind of Greek chorus, sighing and clucking as the damaging testimony added up.

In his various phone calls and meetings with SAC’s lawyers, Balkany had repeated one phrase as if it would insulate him from suspicion: “I’m not a hold-up man.” He would then invariably assert the value of the work his school was doing in the community, or his good character as a Jew. “I’m not here to threaten some—God forbid, I’m on the other side of the fence,” Balkany told Nussbaum in one taped conversation. “You know, my heart goes out, that a man like Cohen, who obviously has made it, he’s probably even a kohane because his name is Cohen.”

Cohen, the Long Island-raised son of a Seventh Avenue garmento, never met Balkany, and he never came anywhere near the courtroom during Balkany’s trial in November. The closest he got, at least publicly, was a modern art auction [5] at Christie’s, 60 blocks uptown. But the rabbi was the least of Cohen’s problems that month: The government’s insider-trading investigation was reaching fever pitch. Two weeks after the trial wrapped up, government agents served SAC and two other hedge funds with subpoenas [6] and began making arrests.

And yet, from the start, Cohen’s lawyers took the rabbi seriously. Within days of Balkany’s first call to Connecticut, SAC’s outside counsel, a former prosecutor named Martin Klotz, reported the rabbi to federal prosecutors in New York’s Southern District—the same office pursuing the insider-trading investigation against Galleon. The SAC attorneys agreed to take the step of going undercover, taping hours of conversations that were crucial to the government’s case against Balkany. The rabbi, it seems, provided an excellent opportunity for Cohen’s team to do the government “a solid,” as one lawyer who has represented clients in the insider-trading investigation into Galleon put it to me. Stephen Miller, a former federal prosecutor in Manhattan and Philadelphia, explained SAC’s decision to participate as a savvy legal move. “They could say they have a culture of compliance,” he said, “and Exhibit A is this case.”

Now Balkany, who assumed that by presenting himself as a concerned “co-religionist” he could establish a real connection to Cohen, is facing up to 20 years in prison. And it’s all because the rabbi made a simple mistake: believing that, just because he imagined they shared a special bond as Jews, Cohen would feel the same way.

On November 1, 2010, the first day of the trial, Brafman, Balkany’s lawyer, urged the jury—three men and nine women, all but two of them black or Latino—not to judge his client as a Jew. “I represent the man with the white beard and black yarmulke,” Brafman said, by way of introduction. “Look at yourselves,” he went on. “Nobody on the jury looks like Rabbi Balkany. That’s not a jury of one’s peers.” It was an effective rhetorical gesture, but it sounded almost absurd in the context of a case that turned on Balkany’s effort to trade on his and Cohen’s shared Jewish heritage. “Frankly, I, I really, I’m doing this as a Jew to a Jew,” Balkany had insisted in a taped conversation with Klotz, SAC’s outside counsel. “I’m just stepping in, really, to be of help to him.”

The plan to extort Steve Cohen appears to have originated at the federal prison camp in Otisville, N.Y., an hour or so north of Manhattan, which the Bureau of Prisons has tailored to suit the special dietary and other needs of Hasidic inmates. “It’s like a bungalow colony up there in the Catskills,” joked Gary Friedman, the executive director of Jewish Prisoner Services International [7], an organization that provides services to Jewish inmates. Balkany was a regular visitor to the camp and, in his recorded conversations with SAC’s lawyers, said it was an inmate named David Schick who provided the connection to Hayim Regensberg, the man Balkany claimed was being pressured to give information on SAC. Schick, the scion of a famous bakery dynasty in Brooklyn, is an Orthodox Jew who defrauded [8] his investors of as much as $200 million in the late 1990s.

Regensberg is serving a 100-month sentence for running a Ponzi scheme, and his lawyer, Robert Baum, told me he believes his client has information that may be of interest to the government. Indeed, some of the details that Balkany dangled in his conversations with SAC have proven to connect to real investigations—particularly concerning a healthcare fund called FrontPoint, which is embroiled [9] in its own insider-trading scandal. But prison officials testified during Balkany’s trial that the rabbi never visited Regensberg during the months he spent negotiating with SAC, and federal investigators testified that no one from the government ever spoke to him about the insider-trading investigations, let alone approached him with an offer to cut a deal in exchange for information. “They haven’t tried to follow up,” Baum told me, in late November.

In Jewish terms, Cohen made a strange target. He and his wife, Alexandra—who grew up in a Puerto Rican Catholic family in Washington Heights—do not, according to tax records filed by their family foundation, give to Jewish communal organizations or to synagogues, but choose instead to shower millions on hospitals, urban-youth programs, and the schools where their children are enrolled—including Brown University, from which Cohen’s son, Robert, graduated in 2009. Cohen also sits on the board of the Robin Hood Foundation [10], a group devoted to fighting poverty in New York. Of the millions his foundation has given away since it was set up in 2001, the only significant donation to a Jewish cause was $25,000 to a religious-outreach group called Gateways, which is based in the ultra-Orthodox enclave of Monsey, to buy a table at a gala fundraising dinner in 2004. (The group’s director, Mordechai Suchard, told me he couldn’t remember who was being honored.)

In the wake of Balkany’s arrest, and amid a wave of publicity [11] surrounding Cohen’s ex-wife Patricia, Steve and Alex Cohen earlier this year announced a $50 million gift [12] to an organization that is at least nominally Jewish: the North Shore-Long Island Jewish Health System, which will use the money to expand its children’s hospital in New Hyde Park, south of Great Neck, where Cohen grew up. “Stevie Cohen is one of the most charitable people I know, and he’s done extremely well,” said his former boss Howard Silverman, who gave Cohen his start on Wall Street 30 years ago, at the boutique investment firm Gruntal & Co. “He wasn’t into his religion—he was just Jewish, like anyone else.”

As an undergraduate at the Wharton School of the University of Pennsylvania, Cohen was a brother in the Jewish fraternity Zeta Beta Tau and in 2007 gave the fraternity a $2 million gift [15]. Now 54, Cohen evinces little outward connection to the Jewish Establishment—though he has been a generous political contributor to both parties and last summer reportedly hosted a dinner [16] at his Greenwich estate for Republican strategists that included the Israel advocate Dan Senor, author [17] of Start-Up Nation, who has been bruited as a possible Senate candidate in 2012. But in a city full of high-profile Jewish spenders, Cohen doesn’t engage in the antics of, say, his fellow hedge-funder Stephen Schwarzman, the New York Public Library donor who threw himself a $5 million birthday party that made the front page [18] of the Wall Street Journal, or of David Brooks, the Long Island defense contractor who threw a $10 million bat mitzvah [19]—complete with performances from Aerosmith and Tom Petty—for his daughter Elizabeth in 2005, before being charged in 2007 with insider trading and securities fraud. (Brooks was found guilty [20] at trial in September.)

Yet, from the start, Balkany attempted to establish a Jewish rapport with his interlocutors—even where there wasn’t any to be made. A few days after his first phone call, Balkany met with Klotz, SAC’s outside counsel, at his gracious red-brick home in Brooklyn. The first thing Balkany asked Klotz, as they sat down over some snacks, was whether he was a Jew. “He said, ‘Are you Jewish, or Polish, or’—and it was sort of like, ‘What?’ ” Klotz, a graying, square-faced man whose family is German but not Jewish, testified with a bemused grin. A concealed camera captured a similar conversation between Nussbaum, SAC’s in-house lawyer, and the rabbi when they met in Stamford, in early January of this year. “What is your Hebrew name, Peter?” Balkany asked. Nussbaum, whose decidedly un-Hebraic middle name is Addison, told the rabbi that his German-born Jewish grandparents in Queens had been religious, but his father had insisted on a completely secular home. “So, we have to have you have a bar mitzvah!” Balkany responded, delighted. In court, months later, when one of the prosecutors asked Nussbaum—a tall, thin-faced, WASPy-looking man with a receding cap of sandy, straight hair—whether he considered himself ethnically Jewish, he answered with a curt “Yes.”

Balkany’s case was the kind that usually doesn’t make it to trial. From the start, it was obvious that the government would be hard-pressed to lose. Everything, except for the first few phone calls Balkany made to SAC, was on tape. Over the course of the first four days of the trial, the jury heard hours of Balkany, in his distinctive lilt, wheedling and cajoling SAC representatives and undercover FBI agents he was told were SAC executives in more than 50 phone calls. The ask was simple: If Cohen gave him $4 million in checks for Bais Yaakov and Torah Vodaath, he would magically transmute it into “good will” with Regensberg, the inmate, who Balkany said he would instruct to keep quiet about “Connecticut.” “I want to tell you, this is a heavy lift,” Balkany told Klotz on the phone last January. The next day, when he met Klotz and Nussbaum in Stamford, he elaborated. “I don’t consider it a lot of money, and I’ll tell you why—not because he’s so rich,” Balkany explained. “I think, even if he was able to maintain the business, but if he had to go into this thing, you’re talking $20 million, $30 million.”

It’s impossible to know what the rabbi was thinking as he sat at the defense table listening to his own charade. He did not take the stand, and his lawyer, Brafman, declined interviews on the rabbi’s behalf. (“Talking too much and using poor judgment got him into this mess,” Brafman told me.) At 64, Balkany looks a little like a bearded Donald Sutherland, with the same bright white hair and bulbous features, always in a black or gray suit and a crisp white shirt with a black tie and a black velvet yarmulke, sometimes clutching a simple white ceramic mezuzah. As the trial progressed, he sometimes followed along with transcripts that were stacked in a three-ring binder. Other times, he stared off into space, or read from a bound copy of the Torah.

But a guy with the chutzpah to try and swindle Steve Cohen, a man legendary for his business acumen, is also the kind of person who would insist on going for broke with a jury trial rather than take a government plea offer. “Rabbi Balkany would not plead guilty because he insisted that he did not intentionally violate the law,” Brafman told me after the trial ended, when we met at his office in Midtown Manhattan—a comfortable room with cream-colored furniture, expansive views out over the East River, and walls cluttered with framed newspaper clippings and signed headshots from his celebrity clients. (Brafman reduced his normal fees for the rabbi.)

The rabbi was arrested once before, in 2003, on charges of misappropriating $700,000 in federal funds designated for paying down two school mortgages. (The New York Post dubbed him “Robbi [21].”) In that episode, Brafman convinced prosecutors to suspend their case in exchange for Balkany agreeing to return the money. This time around, Balkany clearly believed that he was tricked, over the course of two months of negotiations with Klotz, into going further than he’d ever intended at the outset. “Look, I told you from where I’m coming, you know, that I’d like him to participate in a couple of charities,” he told Klotz last December, shortly after their meeting in Brooklyn. “If, after you’ve shared the name and you’ve come back, well, it’s really of no consequence whatsoever, fine, you know, good luck and that’s it. Then I’m still happy we had our meeting.” Klotz said he understood. “You know, on the five percent chance that, you know, it could explode, there was somebody out there willing to take the time to sit down and to pass it on,” Balkany replied, “and give him the opportunity to divert, you know, this type of thing.”

As one person told me, Balkany is the kind of guy who will try to find a shortcut if you tell him to cross the street at the light. He was born in Detroit, where his father was a stock manager for General Motors and his mother worked as a typist. According to Balkany’s older brother, Louis, now a vascular surgeon in Toledo, Ohio, the family kept kosher but wasn’t Sabbath observant, until one day his brother—known to his family by his Hebrew name, Yehoshua—announced he wanted to leave his public school and go to a local yeshiva, Beth Yehuda.

Balkany won a scholarship to attend Torah Vodaath, a yeshiva in Brooklyn, and he stayed in New York after he was ordained as a rabbi in the late 1960s, eventually taking over as principal at Bais Yaakov. On a plane to Florida, he met Sarah Rubashkin, a daughter of Aaron Rubashkin, founder of Agriprocessors kosher meatpacking empire, who occupies a position of near-royalty in the Lubavitch community. They soon married, and their first child was born in 1969. (Agriprocessors was itself recently the target of a wide-ranging federal investigation; Balkany’s brother-in-law, Sholom Rubashkin, was sentenced [22] last summer to 27 years in prison on charges of financial fraud.) “The Rubashkin family, they thought it was an intermarriage,” Louis Balkany recalled to me over the phone. Milton Balkany never became a Lubavitcher, maintaining his distinct version of Hasidic observance, and making his life in Borough Park, a few miles away from the Lubavitch enclave of Crown Heights.

By the late 1980s, he had established himself as a successful political fundraiser, mainly for Republicans; according to a May 1990 report in Common Cause, Balkany bragged that lobbyists called him “the million-dollar-a-year man.” He had a seat on the National Republican Senatorial Committee and once gave an invocation during a reception thrown by Dan Quayle, then vice president. “He was quirky, in the sense that he went to minyan first thing in the morning but he wore John Lobb [23] shoes,” said a former Bush Administration staffer, referring to the bespoke brand popular with Republican heavyweights at the time.

Over the years, he developed a reputation as someone who had access not just to elected officials but to various government agencies, particularly the Bureau of Prisons, where attorneys found Balkany’s help invaluable in getting their clients’ requests addressed. “There was one case with a client who was in prison in the Midwest, and I was really at my wit’s end, and people said, ‘Call Rabbi Balkany,’ ” Brafman told me. “People who were not taking my calls took his calls, and he made inquiries and was able to convince the BOP to make the transfer.”

ndeed, by late January, as SAC continued to drag its heels on handing over the checks, Balkany himself drew on his track record with the Bureau of Prisons to take back control of the process: He called prosecutors himself and offered up Regensberg’s name in connection with a request to help other inmates get moved to halfway houses or better kosher food. “I’m just hoping by being a good Samaritan, or a good-will ambassador, to get Regensberg to cooperate,” he told an FBI investigator, unaware that the same man was investigating him.

One of the people who came to support Balkany in court every day was Chesed Halberstam, a long-bearded, bespectacled man who spent 17 years as a personal aide to the wife of Lubavitcher Rebbe Menachem Mendel Schneerson. He wore a yellow pin he proudly explained indicates he is awaiting the Messiah. Every morning, he took a bound copy of the Torah that had once belonged to the rebbe out of a black leather carrying case, handed it to Balkany, and then parked himself in the front row, just behind the defense table. I asked him why he took it from Balkany every time court recessed, instead of lending it to the rabbi for the duration of the trial. “It’s worth a great deal, so I don’t let it out of my sight,” explained Halberstam. He added that he hoped that the book might bring Balkany luck, even if he only held on to it a few hours each day. “He was just trying to help people, and they bring these ludicrous charges,” Halberstam said.

Courtroom 11B in the white-marble Daniel Patrick Moynihan Federal Courthouse, near City Hall, has hanging on its back wall a plaque of the Great Seal of the United States: an image of an eagle crowned by 13 tiny stars representing the original colonies, arranged in the pattern of a Star of David. On the second day of the trial, Sarah Balkany, a short, plump woman who sat through much of the trial studying her own small prayer book, spotted it, smiled, and leaned over to point it out to one of her daughters, Rosie, who smiled too and patted her mother’s hand.

Rosie, tall and blonde and pregnant, is married to the Chabad emissary in Bucks County, Pennsylvania. One of the other Balkany daughters, Nechamie, is the rabbi’s wife at the Chabad outpost in Fort Myers, Florida. They dress modestly, but they manage to look chic: long-sleeved shirts with cardigans and shawls, clingy sweater dresses, slouchy boots, sheitel wigs cut in attractive shoulder-length styles. One afternoon, I followed another of Balkany’s daughters, a blonde nutritionist named Sheva, into the ladies’ room; she was heavily pregnant, and I commented that it couldn’t be easy for her to sit all day on the hard wooden pews. She asked me if I was a juror and relaxed when I said I was not, telling me that she was overdue with her first child. “If my water breaks, I’ll just leave quietly,” she said, laughing. “This trial doesn’t need any more drama.”

The Balkany women spent much of the trial studying their prayer books, occasionally leaning toward each other to whisper animatedly about this or that piece of gossip; the effect was to give the gallery area, separated by a low wall from the well where the attorneys and lawyers sat, the atmosphere of a shul.

The first week of the trial, I sat with Tom Robbins, a chipper, white-haired former Daily News reporter, now a columnist [25] for the Village Voice, who was drawn to the case for personal reasons: He was sued by Balkany in 2004 for defamation. (The case was later dismissed.) Robbins, no stranger to the myriad stripes of Orthodox Jewry in Brooklyn, was nonetheless puzzled by the variations he had seen on display in the gallery. “Are they all Orthodox?” he asked, gesturing at two of Balkany’s younger daughters, who paraded in wearing short skirts paired with designer shoes: suede Prada peep-toes and racy black patent-leather Yves Saint Laurent platforms. Their youngest brother, Shmuel—who had his own turn in the news a couple of years ago, after being badly beaten [26] in Crown Heights—wore loafers emblazoned with the Prada logo. But even those who were less outwardly flashy are, it turns out, prone to secular adventures: The rabbi’s son Levi and his wife, Perel, had an Orthodox wedding [27] in 2004, but, according to public records, celebrated their first anniversary by getting married again in Las Vegas, at the infamous Little White Wedding Chapel [28], where Rev. Iann Schonken—who in 2004 performed the brief wedding of Britney Spears to her childhood friend Jason Alexander—officiated.

Their expensive clothes and jewelry would have been a passing curiosity had it not been for the heartbreaking testimony of one witness, called by the government: Chana Rivka Flaum, a tiny, girlish woman in flat shoes, bobbed sheitel, and heavy stockings. As the administrator at Bais Yaakov, she could explain exactly what drove Balkany to try and push his luck with Cohen: He was broke. According to state records, Balkany is carrying more than $200,000 in unpaid tax liens against his home in Borough Park. The school, which declared bankruptcy in 2005, vacated its original property—a 1960s-style building whose exterior wall still bears the ghostly outline of the name “Bais Yaakov”—and downsized into a much smaller facility a few miles east in Midwood.

Flaum was visibly anxious and overwhelmed on the witness stand. When Marc Berger, one of the prosecutors, asked her about whether the school had an endowment, she responded, “I don’t know what that means.” She described how she made payroll, or covered utilities, by cashing tuition checks from parents at a local check-cashing service; she said that in December of 2009, many of the teachers at the school had not been paid since the beginning of the school year. “How do you know that teachers had not been paid in December of 2009?” asked Berger. “Partly because I deal with payroll and partly because I had teachers asking me for money every day,” Flaum said, looking directly at Balkany, who looked down at his lap.

Ironically, it was the government that invoked the principles of Jewish law before the jury. “Well-reputed, prominent members of his community gave praise to Rabbi Balkany, and the acknowledgment, this acknowledgment had a Hebrew name,” Marc Berger, the 36-year-old deputy head of the securities task force in the U.S. attorney’s office, explained in his closing. “It was called a hakorus hatov.”

Berger, handsome, tall, and dark-haired, was the first to deliver his summation to the jury, on a Tuesday afternoon. His parents came to watch, as did his wife, Berit, who is also a lawyer. She sat at the back of the courtroom, rocking their napping newborn daughter in a car seat on the carpeted floor. “The defendant lied and used everyone around him to achieve his criminal goals,” declared Berger, who stood at a podium facing the jury, as Balkany sat behind his left shoulder, quietly clutching his Torah to his chest. “The evidence in this case really speaks for itself quite literally,” Berger went on. “Everything you need to find the defendant guilty of the crimes charged, it’s on tape.”

After a short break, Brafman got up to give his reply. Brafman is famous for his courtroom prowess—a performer so worth seeing that other lawyers stopped in to watch him. At five feet six inches, he barely reaches Berger’s shoulder, but as he took the podium, his barrel chest puffed out, and he seemed to fill the room. He adjusted his French cuffs and began. “Just so we’re clear, lying on those tapes, everybody lied,” he said. “There should be no question in your mind that everybody lied. Klotz lied to Balkany. Balkany lied to Klotz.” Brafman backed into the middle of the courtroom, away from his notes, speaking in increasingly outraged tones. “Are we nuts? We’re not nuts. None of us are nuts. I don’t think we’re nuts. But we’re listening to conversations that are nuts,” Brafman argued. “You can’t just convict Rabbi Balkany because he had some stupid conversations that the government has suggested to you show that he’s guilty of a crime,” he went on. “He did not act with the requisite criminal knowledge or intent that these crimes will require you to find beyond a reasonable doubt.”

Brafman paused, reaching into a repertoire that stretches back to his early days working for Robert Morgenthau in the Manhattan D.A.’s office. “Now, you have an argument with somebody, even somebody you love, whoever gets the last word, man, that’s a powerful moment, and that’s the advantage the government gets, because they have the disadvantage of having to prove guilt beyond a reasonable doubt,” Brafman said. “But here is my thought on that, and I think I’m right, and I hope you agree. They don’t have the last word. You do.” Let’s fight the man, was what he meant—you, me, and the rabbi against Steve Cohen and the government.

When he finished, after an astonishing hour and a half of high-volume exposition, Brafman collapsed into his leather seat, exhausted. Balkany turned to his family, his pale cheeks suddenly ruddy, a smile stretching beneath his beard as he surveyed them—almost all of his children present, except for Sheva, who had gone into labor. “That was wonderful, wasn’t it?” Balkany asked me, on his way out. He made his way through the crowd to the coat rack, where his black hat sat perched on the top shelf. Outside, in the white marble hallway, one of his daughters rushed to the bank of pay phones to make a phone call to the hospital; as her father came out into the hallway, she shreiked, “Sheva had her baby! Eight pounds!” Balkany’s smile grew broader.

The next morning, Jesse Furman got up to give the government’s response. Furman, a mild 38-year-old, is Brafman’s antithesis in almost every way: rumpled where Brafman is immaculately tailored, precisely spoken where Brafman releases Brooklyn-inflected torrents of words, an Upper West Sider who attends the traditional-egalitarian Ansche Chesed synagogue while Brafman is a trustee of Beth Sholom Synagogue in Lawrence, on Long Island. Furman’s father, Jay, is a successful real estate developer active in prominent New York and Jewish charities, while his mother, Gail, is a well-known Democratic fundraiser. His brother, Jason [29], is deputy director of President Barack Obama’s National Economic Council. Jesse Furman went from Harvard to Yale Law and clerked for Supreme Court Justice David Souter.

But Furman, too, could make a credible common-man plea to the jury: “We live in a country, a beautiful country, where no person, no person can be accused of a crime without the entitlement to a trial, where any person charged with a serious crime is entitled to a trial before a jury just like you.” We all came from somewhere, and we all worked hard to get from there, to where we are. “The Red Cross doesn’t use these kinds of lines to raise money,” Furman said, citing Balkany’s repeated reassurances to SAC’s representatives that if they handed over the cash he wanted, they wouldn’t have to sweat a government investigation. “This isn’t how the March of Dimes gets the money it uses for charity,” he added. “This is corruption, pure and simple.”

The jury was dispatched at just before 11 a.m., left to decide whether Balkany deserved anything from Steve Cohen, his fellow Jew. By 3:45, the jury had returned its verdict. It was a simple and definitive “no”—guilty, on all four counts.

URLs in this post:

[1] billionaire: http://www.forbes.com/lists/2010/10/billionaires-2010_Steven-Cohen_PZMO.html
[2] the Steve Cam: http://www.vanityfair.com/online/daily/2010/06/steve-cohen-on-life-love-his-art-collection-and-those-pesky-insider-trading-rumors.html
[3] story: http://www.nytimes.com/2009/12/16/business/16sac.html
[4] suit: http://www.nytimes.com/2009/12/17/business/17hedge.html
[5] auction: http://www.nytimes.com/2010/11/04/nyregion/04auction.html
[6] subpoenas: http://www.marketwatch.com/story/sac-tells-investors-it-got-government-subpoena-2010-11-23
[7] Jewish Prisoner Services International: http://www.jewishprisonerservices.org/
[8] defrauded: http://query.nytimes.com/gst/fullpage.html?res=9B04EFDC1439F935A25755C0A960958260&pagewanted=2
[9] embroiled: http://www.businessinsider.com/the-rabbi-who-blew-the-whistle-on-frontpoints-chip-skowron-insider-trading-is-the-same-rabbi-who-tried-to-blackmail-steve-cohen-2010-11
[10] Robin Hood Foundation: http://www.robinhood.org/home.aspx
[11] publicity: http://nymag.com/news/features/65126/
[12] gift: http://foundationcenter.org/pnd/news/story.jhtml?id=289300008
[13] Continue reading: http://www.tabletmag.com/news-and-politics/53532/tribal-allegiance/2/
[14] single page: http://www.tabletmag.com/news-and-politics/53532/tribal-allegiance/print/
[15] gift: http://www.zbttheta.org/brothers.php
[16] dinner: http://nymag.com/nymetro/news/people/features/12353/
[17] author: http://www.rosemontsolebury.com/investmentteam.html
[18] front page: http://www.nytimes.com/2007/07/29/business/yourmoney/29deal.html
[19] bat mitzvah: http://nymag.com/daily/intel/2007/10/david_brooks.html
[20] guilty: http://www.nytimes.com/2010/09/15/nyregion/15brooks.html
[21] Robbi: http://www.nypost.com/p/news/critics_disappear_after_rabbi_is_Cb8oPpxeBEEMj9JgWhzbwK
[22] sentenced: http://www.nytimes.com/2010/06/22/us/22iowa.html
[23] John Lobb: http://www.johnlobb.com/
[24] Continue reading: http://www.tabletmag.com/news-and-politics/53532/tribal-allegiance/3/
[25] columnist: http://www.villagevoice.com/columns/tom-robbins-506893/
[26] beaten: http://www.thejewishweek.com/features/crown_heights_coverup
[27] wedding: http://www.onlysimchas.com/v4/index.cfm/fuseaction:simcha.view/SimchaID:24583
[28] Little White Wedding Chapel: http://www.alittlewhitechapel.com/
[29] Jason: http://www.whitehouse.gov/the-press-office/obama-announces-deputy-directors-national-economic-council
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Friday, December 10, 2010

Media continues its amnesia over terrorist attack on Iran’s scientists

Letter to New York Times reporter David E. Sanger

Dear Mr. Sanger

Why did you omit mention of the recent, Nov. 29 assassination of Iranian nuclear scientist Majid Shahriari in your Dec. 10 report on U.S. opposition to Iranian nuclear power?

You mentioned the Stuxnet “worm” whose provenance pre-dates the assassination, but the not the assassination itself, or the murder of another scientist’s wife, Mrs. Fereydoon Abbasi, in the same attack.

Sincerely,
Michael Hoffman

Note how Sanger (below) reports that Gary Samore, an Obama administration official, is pleased that covert attacks against Iran, such as the Stuxnet worm, are in place. By omitting reference to the recent assassination of the Iranian scientist, Sanger does not have to ask the administration any embarrassing questions about whether they are pleased about that covert operation as well. Furthermore, it seems that Mr. Sanger, along with most of the US media including NPR, intends to have us forget about the terror attack against Iran’s scientists. By omission and distortion, the US propaganda system, in which Mr. Sanger is a prominent player, seeks to teach us that terror attacks worth remembering occur only against the Israelis and the West, not Muslims or Iranians.

Gary Samore represented the Obama administration on Iran at the conference of the noble-sounding “Foundation for the Defense of Democracies” ((http://www.defenddemocracy.org) which David Sanger fails to mention is actually a neocon front group whose “Leadership council” consists of Newt Gingrich, Sen. Joe Lieberman and William Kristol.

U.S. and Allies Plan More Sanctions Against Iran
http://www.nytimes.com/2010/12/11/world/middleeast/11nuke.html?hp

by David E. Sanger | NY Times | Dec. 10, 2010

WASHINGTON — Three days after the first nuclear talks with Iran in more than a year adjourned with no progress, President Obama’s chief nuclear adviser said on Friday that the United States and its allies planned a new round of sanctions against the country in coming weeks, part of an effort to test “how high Iran’s pain threshold is” and force the country into suspending its production of nuclear fuel.

Another session of talks with Iran is scheduled to take place next month, probably in Turkey. But at a conference on Friday held by the
Foundation for the Defense of Democracies Mr. Obama’s coordinator for weapons of mass destruction, Gary Samore, suggested that Iran may have decided to resume talks with the with the members of the United Nations Security Council and Germany “because it believes it can manipulate the appearance of negotiations to weaken existing sanctions and avoid additional measures.”

“This ploy will not work,” Mr. Samore said. “In the wake of the Geneva talks, we and our allies are determined to maintain and even increase pressure. We need to send the message to Iran that sanctions will only increase if Iran avoids serious negotiations and will not be lifted until our concerns are fully addressed.”

Mr. Samore was not specific about the sanctions now being contemplated. He also would not comment on the effects of the Stuxnet worm, which appears to have been directed at disrupting Iran’s centrifuges.

“I’m glad to hear they are having troubles with their centrifuge machines,” he said with a smile, “and the U.S. and its allies are doing everything we can to make it more complicated.” But he said nothing about who was responsible for the worm. (END QUOTE)

For further research:

(Youtube video): NPR’s Propaganda System against Iran



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