Questions grow over record stock gift to obscure Brooklyn synagogue
Image by Getty Images/Drew Angerer/Staff
By David Ian Klein August 13, 2020
A little-known Brooklyn synagogue was the recipient last month of what may be the one of the largest personal donations to a religious organization in American history.
But instead of celebrations over such a large contribution amid the bleak financial landscape of Jewish communal life, questions are being raised over the nature of the payment.
Congregation Chemdas Yisroel received nearly 3 million shares in the Eastman Kodak Company on July 29, which at the time could have been valued as high as $180 million, according to federal filings. The shares were a gift from billionaire investor George Karfunkel, a member of Kodak’s board of directors. Chemdas Yisroel is an Orthodox synagogue and Karfunkel is a Brooklyn-based Orthodox Jew.
The donation came amidst a rollercoaster week for Kodak. The former camera giant, which filed for bankruptcy in 2012, had received approval for a $765 million loan from the International Development Finance Corporation, a federal agency that is led by White House senior advisor Jared Kushner’s former college roommate and generally does not provide domestic aid. The purpose of the loan was to set up facilities for the manufacture of pharmaceutical products including the antimalarial drug hydroxychloroquine, which President Trump has repeatedly promoted as a treatment for COVID-19 despite the misgivings of several experts.
The surprise deal set off a buying frenzy which in three days skyrocketed Kodak’s stock price from $2.13 a share to a high of $60 before settling to around $33 at the end of July.
The deal is now reportedly being investigated by multiple congressional committees, while Sen. Elizabeth Warren has called for a probe into insider trading.
Chemdas Yisroel seems to have a very limited public presence. It has no website – though that in itself is not unusual for strictly Orthodox synagogues that shun the internet – and contact information could not be found. There seems to be little evidence of its existence outside of corporate records and SEC filings.
According to the magazine Mother Jones, Chemdas Yisroel was first registered in 2018 as a corporation in Delaware, before being reregistered in New York City a few months later.
The website Charity Navigator lists Chemdas Yisroel’s address as being the same as the accounting firm Roth&co, whose website features a yarmulke-clad staff. But the Wall Street Journal reported that a small plaque connected to a Borough Park apartment building suggests the shul has an actual physical location.
According to the Journal, Roth&co founder Abraham Roth is the synagogue’s director, while Karfunkel is its treasurer and CFO.
According to reports, the transfer to Chemdas Yisroel would have put Karfunkel’s stake in Kodak down to 4.4% — just below the 5% threshold at which he would have to publicly report his stock transactions. Depending on when in the day it was given, the stock would have been worth anywhere between $99.6 and $180 million.
Donations to synagogues are not out of the ordinary for the 70-year-old billionaire, but according to Mother Jones, the value of the gift would have been anywhere from 15 to 50 times more than any single past donation he has made.
Born in Hungary to a rabbinic family shortly after the Holocaust, Karfunkel and his brother Michael, who died in 2016, are well known as major philanthropists in the Orthodox world, though relatively unknown outside of it.
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