Thursday, July 30, 2009

Not Madoff

Leonard Abess Jr.

It is February 24, 2009 and Leonard Abess Jr. is seated beside Michelle Obama in the gallery of the Chamber of the United States House of Representatives, the guest of the First Lady, as her husband, President Barack Obama addresses a joint session of Congress in a nationally televised speech. The members of Congress, the Joint Chiefs of Staff, the sitting Justices of the Supreme Court of the United States rise, face Abess and break out into admiring applause. They have just heard President Obama say:

“…inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.

I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn’t tell anyone, but when the local newspaper found out, he simply said, ‘I knew some of these people since I was 7 years old. I didn’t feel right getting the money myself’.”

Leonard Abess is Jewish. Why do I accentuate this? Because of the proclivity of those who view Bernie Madoff as that ‘Jewish’ fraudster. No one refers to Jeffrey Skilling or BernardEbers or Dennis Kozlowski as that ‘Gentile’ crook. So I choose to emphasize the Jewishnessof one who does good.

The City National Bank of Florida, the second oldest commercial bank in Miami, was established, with $500,000 of capital, in 1946 by Abess’ father, Leonard L. Abess Sr., an accountant and his partner Baron de Hirsch Meyer, a lawyer.

The senior Abess, who passed away in 2001, arrived in Miami in 1925 with $75 in his pocket. The following year he met Meyer at a party and that same night they formed a 48-year partnership with a promise that they would always return a share of their earnings to the community. Abess Sr. became a pillar of the Jewish community and a generous supporter of both Jewish and universal causes ranging from the University of Miami to theJewish Museum of Florida . He and his wife were named Miami-Dade County , Philanthropists of the Year for 1990-91 and both a boulevard and a park are named after him.

Baron de Hirsch Meyer was not really a baron but was a Jewish guy from Wisconsin . His parents named their son after the original Baron de Hirsch the noted Jewish philanthropist who was instrumental in securing the emigration of Jews from tsari st Russia . The absence of a genuine title did not deter Meyer’s wife from signing into European hotels as the ‘Baroness’ de Hirsch Meyer.

Leonard Abess Jr. started his career in City National Bank’s print shop making forms and documents and worked his way up the corporate ladder from there but he did not inherit the Bank from his father. The Bank was sold to an investor group in the early 1980s that in turn flipped majority interest to Colombian coffee magnate Alberto Duque. Duque turned out to be a crook who was convicted and jailed for defrauding 20 banks out of $125 million dollars by issuing fake bills of lading drawn on nonexistent inventories of coffee beans. Duque’sinterest20in the Bank went up for sale in bankruptcy proceedings from where in 1985 it was purchased by Abess for $21 million, all of it borrowed. He later purchased the minority interest in the Bank for another $6 million.

At the age of 35, Leonard Abess became one of America ’s youngest bank chairmen. Under Abess’ steerage, the Bank grew from seven branches with $400 million in assets to 18 branches with $2.75 billion in assets and consistently ranked in the top 50 of all large U.S. banks in terms of profitability and asset quality.

As the Bank grew so did Abess’ community involvement. He is20Vice Chairman of the University of Miami ’s Board of Trustees, former Chairman of the Board of Mount Sinai Medical Centre, member of the United Way Million Dollar Roundtable, Board member of The Greater Miami Jewish Federation and a member of its Summit Division, those who donate over $100,000 a year to the United Jewish Appeal. A devoted environmentalist,Abess has endowed millions of dollars for environmental studies. Following in his parent’s footsteps, Leonard and his wife, Jayne were named Miami-Dade County , Philanthropists of the Year for 2001-02.

Over the years many suitors had attempted to purchase City National Bank but all were rebuffed by Abess. That is until Caja Madrid , the second largest bank in Spain , came along and made Abess an offer he could not refuse. They would permit Abess to maintain a minority interest and continue to run the Bank, the jobs of all employees would be secure and Caja Madrid shared Abess’ philosophy of giving a substantial amount of their profits back to the community. And so in 2008, Abess sold an 83% interest in City National Bank to Caja Madrid for $977 million.

Abess had long dreamt of a way to reward the employees of the Bank who had worked with no promise of equity and whose 401(k) Retirement Plans were now ravaged by the stock market meltdown. He thought he would surprise them. He never believed that the Bank’s success was about him but rather was about the 399 wonderful, decent people who worked for him. Some had spent their entire careers at the Bank, several rising from low-level jobs to vice-presidential positions. “I saw that if the president doesn’t come to work, it’s not a big deal. But if the teller doesn’t show up, it’s a serious problem”, he stated. Some warned him that dropping large cheques on the employees was not a good idea but Abessdid not listen.

So, what Leonard Abess did was simply take $60 million of his ow n money and quietly hand it out to all 399 people who worked for him; clerks, tellers, bookkeepers, secretaries, janitors, executives, everyone on the payroll. He even tracked down 72 former employees so that they might share in the largesse. The amount each received was based on the number of years of service. The average bonus exceeded $100,000.

Fearful that his employees might misconstrue the bonuses as severance, immediately before the sale of the Bank was completed, in order to announce the payments, Abess made an online video explaining to the Bank’s staff that each was to receive a payment as gratitude for service and that all jobs were secure. Three days later, senior executives handed out vouchers detailing the amount deposited to each employee’s payroll account.

Abess didn’t publicize what he h ad done and did not make a big deal over the payments. He didn’t even show up at the Bank the day the bonus envelopes were distributed.

At a time when the heads of the American big three automakers were flying toWashington in their private corporate jets to beg for bailout money; when the senior executives of banks were taking obscene bonuses while their banks were failing; when the greed and recklessness of Wall Street was one of the causes of the economic tailspin, Abess, against type, was giving back. The actions of Leonard Abess Jr. stand for confirmati on that the days of Gordon Gekko, the “greed is good” character in the movie “Wall Street”, aredrawing to a close.

According to the ancient Jewish fable of the “Lamed-Vav Tzadikim”, there are at all times 36 righteous people whose role in life is to justify the purpose of humankind in the eyes of G-d. For the sake of these 36, G-d preserves the world even if the rest of humanity has degenerated to the level of barbarism. They are unknown even to each other and to themselves. If the identity of one is discovered, he may no longer be a Lamed-Vavnik and if at any time the number should be less than 36, the world will come to an end. While it may be okay to speculate who any of these righteous people might be, out of cautious fear of calamity, I dare not mention the name, Leonard Abess Jr.

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