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Met Council CEO Axed in Insurance Scam

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As Met Council CEO, Rapfogel cultivated close relationships with numerous elected officials, including Christine Quinn (seen here next to Rapfogel). At Rapfogel’s direction, Quinn received $25,000 from the insurance company insuring Met Council employees / Photo Credit: Buck Ennis.
As Met Council CEO, Rapfogel cultivated close relationships with numerous elected officials, including Christine Quinn (seen here next to Rapfogel). At Rapfogel’s direction, Quinn received $25,000 from the insurance company insuring Met Council employees / Photo Credit: Buck Ennis.
Attorney General Opens Criminal Investigation

The Jewish organizational world was stunned on Monday when the Metropolitan Council on Jewish Poverty announced that it had fired its chief executive officer of the past two decades, William Rapfogel, due to “financial irregularities and apparent misconduct in connection with the organization’s insurance policies.” According to news reports, Rapfogel’s actions – which are currently the subject of an ongoing criminal investigation by New York State Attorney General Eric Schneiderman and New York State Comptroller Thomas DiNapoli – likely consisted of two key aspects. Primarily, Rapfogel is said to have arranged the Met Council’s purchase of insurance policies for the social service organization’s employees at inflated prices and then received kickbacks from the insurance provider, Century Coverage Corp. This practice reportedly dated back to 2009. Secondly, the longtime CEO allegedly directed Century Coverage to funnel large percentages of the funds it obtained from Met Council towards individual high-profile elected officials running for the city’s mayoralty, a practice that ensured the officials would subsequently shower the nonprofit with sizable grants.

In what seems to be an admission to the charges, the newly ousted Rapfogel stated through his attorney, “I deeply regret the mistakes I have made that led to my departure from the organization” after 21 years of service. The Met Council’s statement announcing the CEO’s termination and the overall charge noted that, “to date, the investigation has not revealed evidence that any current employees of Met Council engaged in any wrongdoing.”

Ironically, in 2011, Attorney General Schneiderman appointed Rapfogel to a special task force on nonprofits, which recommended instituting measures to ensure greater fiscal transparency by such organizations.

Rapfogel was notified of his termination while he was on vacation over the weekend. Based on the apparent seriousness of the charges against him, the Met Council leadership would not allow him to return to his office to retrieve his personal items.

With Rapfogel’s base salary and benefits adding up to $417,000 a year, the additional income he earned from the insurance company kickbacks essentially put him into the category of an annual half-million dollars earner. Moreover, the Met Council leader’s wife, Judy, serves as chief of staff to State Assembly Speaker Sheldon Silver, a position that nets her $158,000 yearly. Silver has long been dogged by numerous charges of festering corruption in the Assembly under his watch. Rapfogel’s lawyer, Paul Schectman, insisted that neither Silver nor Judy Rapfogel had knowledge of the CEO’s actions. Commenting on the news, Silver said he was “stunned and deeply saddened.”

Most recently, Silver has been heavily criticized for not responding effectively to recent sexual harassment scandals involving members of the State Assembly. State Republicans, as well as a number of prominent newspapers, have demanded that Silver resign his post as speaker. Hank Sheinkopf, a veteran political operative, said that Rapfogel’s latest woes are likely to increase the heat on Silver. “This is throwing another log into the fire,” Scheinkopf said.

Reports have identified the four current leading Democratic contenders for mayor as the recipients of donations from Century Coverage at Rapfogel’s behest. City Council Speaker Christine Quinn received $25,000, Public Advocate Bill de Blasio was given $1,690, former Congressman Anthony Weiner got $4,900, and former city comptroller Bill Thompson received $15,350. While the first three candidates pledged immediately to return the money, Thompson’s campaign stated that it needed some time to review the matter before taking any action.

While representatives for all of the Democratic candidates have claimed that they had no awareness of the insurance scheme, a source said that Rapfogel had spoken freely about his behind-the-scenes coordination of the Century Coverage political contributions. The insurance company has been connected to over $100,000 in such contributions over the past 12 years.

The Metropolitan Council on Jewish Poverty has long been the beneficiary of millions of dollars in state and city funds annually, mostly in the form of funding from individual legislators.

In the course of his 21-year stint at the Met Council, Rapfogel was credited with overseeing the nonprofit’s growth from a small UJA-Federation subsidiary to a sophisticated network of social service programs assisting 100,000 economically strapped New Yorkers yearly. The organization’s annual legislative breakfast regularly attracts a slew of elected officials and honors them for their efforts on behalf of the Jewish poor; the Met Council’s annual Builder’s Lunch pays tribute to developers who construct low-income housing.

The radical change at the helm of the anti-poverty group, which provides employment services, crisis intervention, housing, emergency food and other programs, is happening at a time when the number of people in poor households in the Jewish community has reportedly doubled in the past two decades. According to data from UJA-Federation’s Special Report on Poverty, that number shot up from 180,000 to 360,000, with approximately 90 percent of those households located in New York City. Poverty in the suburbs increased 82 percent since 2002, the report said.

In its statement on the still-unfolding situation, the Met Council emphasized that its programs would continue without interruption and that its board of directors “will work diligently to appoint a replacement as quickly as possible.” In his own statement, Rapfogel said, “My failings should not reflect poorly on an organization that continues to serve so many people with dignity and kindness every day.”

UJA-Federation spokeswoman Leslie Lichter disclosed that her organization had spoken to the leadership of Met Council and was sufficiently assured that they had taken the appropriate measures. “In light of Met Council’s referring the allegations to the authorities and the ongoing investigation, it would be inappropriate for UJA-Federation to provide any further comment,” Lichter said.

In comments made to the Jewish Week, Jeffrey Wiesenfeld, a well-known advocate for Jewish concerns and former state official who has had a long friendship with Rapfogel, said, “No one should lose sight of the fact that he built Met Council from nothing to an unprecedented Jewish-oriented anti-poverty network, with a very supportive donor base, which accrued to the benefit of Met Council clients and UJA-Federation as a whole. I don’t know what transpired but he is a dear friend.”

Menachem Lubinsky, a marketing professional who serves on the board of Met Council, stated,

“the evidence was sufficient enough to have been fired and not even suspended.” Lubinsky added that he always considered Rapfogel to be “the epitome of an upstanding capable professional and very ethical. I felt very comfortable with him and thought he did an incredible job building Met Council from the ground up into the structure it is today. So, on a personal level it’s an extremely sad development that I could not have envisioned in my wildest dreams.”

The Met Council operates a number of community councils in Jewish communities across New York City, and individual directors of those councils were struggling to come to terms with the shocking news of Rapfogel’s sudden departure. “I have no idea what happened,” commented Brad Silver, executive director of the Bronx Jewish Community Council. “Everybody works very hard, everybody is motivated by their ability to help people who are in trouble. We intend to continue working with their [Met Council’s] staff to ensure that people get services.”

Cynthia Zalinsky, executive director of the Queens Jewish Community Council, remarked, “We were all stunned by this. It’s not going to affect the work that we do — we serve the poor, that is not going to change, especially with the holidays approaching.” Zalinsky said that Rapfogel was “a champion of the Jewish poor.”

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