By JOSEPH R. RACKMAN

For many years the propo-nents of day schools lookedforward to the era when

school vouchers would be madeavailable by state and local gov-

ernments. This school funding ideais in use in Milwaukee, but has notgained much traction elsewhere.With vouchers, the governmentalauthority gives parents a “gift cer-tificate” to be used for their chil-dren’s education. Parents can thensend the child to a private orparochial school, instead of a pub-lic school. Understandably, teach-ers’ unions have been opposed tothe spread of this voucher concept,for it will reduce unionized teach-ing jobs. (There may be othermotives for the actions of theseunions, but I believe preventingjob losses is the paramount one.)

The new funding vehicle thatthreatens teachers’ unions is char-ter schools. Essentially, the gov-ernment gives money to a school,usually a new creation, that must

admit its students on a non-denom-inational basis. There was a briefattempt to create a charter schoolin New York City for the study ofArabic language and culture (but itwas derailed by its“enlightened prin-cipal” wearing a T-shirt imprintedwith the word“ I n t i f a d a ” ) .Apparently, therewill be a Hebrew-language charterschool in NewYork City nextyear. One exists inSouth Florida,attracting hun-dreds of Jewishstudents, mostlyIsraelis.

The reason that Hebrew-lan-guage charter schools appeal toIsraelis, but not necessarily reli-gious Jews, is because religiousinstruction is not the main concernfor many Israelis. But charterschools are a concern for many inthe religious community as theypresent an immediate threat to the

financial viability of any dayschool that is within or near thesame community as the charterschool.

One North Miami Beach dayschool experi-enced a signifi-cant loss of stu-dents to a char-ter school thatopened up with-in a reasonabledistance, as afew hundredIsraelis left thereligious dayschool in orderto save money.The loss ofthese students isnot readilymade up by the

reduction in teachers since theinstitutional infrastructure mustcontinue to be supported, but witha reduced number of families.

The problems with charterschools are many, including thethreat they pose to day schools.How will religious instruction becarried out? How does one deal

with issues of kosher food and stu-dents bringing in non-kosherfoods? Will the children pray? Willthey be permitted to do so onschool grounds? Will the studentsbe allowed to say Grace AfterMeals in the lunch room?

Nonetheless, charter schoolsrepresent the first real infusion ofpublic monies toward the need forJewish families to rear their chil-dren in their heritage. What con-sumes me is that rather than fight-ing charter schools, which is whatI have seen happen, communityorganizations should be thinkingabout how to take advantage ofthem. When a charter school opensup, the community has to be will-ing to help transition its existingstructures to the new economicregime.

Maybe charter schools are bestfor children through fourth grade,after which they will transfer to“regular” day schools. MaybeOrthodox synagogues that used tomaintain religious schools (andclosed them as practically all oftheir children started going to day

4 JEWISH WORLD • MAY 15-21, 2009

Charter School PerilsThe Jewish community must take the trend in stride

PERSPECTIVE

Keeping the FaithThompson in Tel Aviv: ‘Wall Street will be back’

Last week, New York CityComptroller William C. ThompsonJr. delivered the keynote address atthe Tel Aviv Annual InstitutionalInvestment Conference during hissecond visit to Israel. The followingis an abridged version of hisremarks.

Israel is widely recognized as acountry of innovation, and itscutting-edge development of

new industries and technologiesmakes it ripe for huge growth

opportunities.In order to capitalize on these

opportunities, we as investors mustcome together and have these con-versations. This is a perfect forumfor us to exchange ideas and per-spectives — not only as we worktoward a prosperous future — but

also as we look back and try to com-pletely understand all the events thathave unfolded in recent times.

It has been a remarkable periodfor the financial community. In thepast year, Lehman Brothers and BearStearns have fallen. Merrill Lynchhas been sold to Bank of America.World markets have been gripped byuncertainty and pessimism. And, fora while, it seemed as if every morn-ing there was a new development

which shook the confidence ofinvestors.

Like all of you, I have lost sleepthinking about the enormous chal-lenges facing the financial world.However, despite all the headlinesand hysteria, I always kept the faith.Wall Street will be back. Throughouthistory, the financial sector has facedchallenges which, at the time,seemed too tall to overcome. But,eventually, the industry always rein-

vents itself. It always innovates tocreate a new era of prosperity.

Remember how, in the 1960s,Wall Street was drowning in a sea ofpaperwork? Back offices throughoutthe industry struggled to keep pacewith the surging volume caused bythe growing presence of institutionalinvestors. At the time, certificateswere physically transferred by hand,and when the volume became over-whelming, it was chaos. Billions ofdollars worth of trades were not set-tled for days. Stock certificates werefound everywhere, from trash cansto bathrooms. Some were neverfound at all. For a period, the stockexchanges actually closed onWednesdays to allow brokerages to

KEYNOTE

115 Middle Neck Rd. Great Neck, NY 11021516/829-4000The award-winning independent Jewish newspaper of Long Island

Publisher & editor-in-chiefJerome Wm. Lippman

Assistant EditorJeff Helmreich

Features EditorBarbara Weinblatt

Travel EditorTania Grossinger

Editorial AssistantEli Feldblum

ContributorsDouglas M. Bloomfield, Shira Dicker,Lawrence J. Epstein, Marcelle SussmanFischler, Ezra Goldstein, William B. Helmreich, Sandy Portnoy, Joseph R. Rackman, Erica Rauzin, Walter Ruby, Lawrence H. Schiffman, Barbara Schultz, Jacob Stein, Carol Steinberg, Harold S. Steinberg, Andrew Wohlberg, Nora YoodDonald Pleasant, Michael Perry

Production EditorLaura Katz

Staff PhotographersDavid Karp, Sender Schwartz

Traffic ManagerKaren Chasin

Director of AdvertisingBernice Witten

Account ExecutivesJoyce Ehrlich, Enid Feldman, Dave LevinLee Lichtman, Joyce Rudnick, Judy Schnelwar

For Israel Advertising Information

International Media PlacementP.O.B. 7195, Jerusalem, Israel 91071

(02) 6252933 Fax (02) 6249240

Art DirectorDeborah Gruenberger

Marketing ConsultantAdam Simms

Circulation ManagerPatricia Locklin

CounselSteven D. Cohn

All material in this paper has been copyrighted, is the exclusive property of this newspaper, and cannot be reproduced without the consent of the publisher. The views and opinions expressed by our columnists do not necessarily reflect the editor’s point of view.

Composition responsibility: This newspaper will not be liable for errors appearing in advertising beyond the cost of the space occupied by the error. Advertiser assumes responsibility for errors in telephone orders. We are not responsible for the Kashruth of any product or establishment advertised in this newspaper. All advertisements designed and prepared by the Jewish World are the sole property of the newspaper and can not be reproduced without the consent of the publisher.

Published weekly by the Empire Publishing corporation. Jerome Wm. Lippman, President. Long Island Jewish World (ISSN 0199-2899) is published weekly for $26 per year by Empire Publishing Corporation, 115 Middle Neck Road, Great Neck,N.Y. 11021. Periodicals postage paid at Great Neck, NY.

POSTMASTER: Send form 3579 to L.I. Jewish World, P.O. Box #10. Great Neck, NY 11022-0010.

Includes the Long Island Jewish Press, founded 1942, serving Queens, Nassau and Suffolk.Local Offices: 1441 President Street

Brooklyn, N.Y. 11213311 w. 37th StreetNew York, N.Y. 10018

CANDLE LIGHTINGCANDLE LIGHTING

Friday, Aug. 22Candles 7:25 p.m.Shabbat ends 8:29 p.m.

Friday, Aug. 29Candles 7:14 p.m.Shabbat ends 8:18 p.m.

Rather than fightingcharter schools,which is what I have seen,community

organizationsshould be thinkingabout how to takeadvantage of them.

‘Our philosophy is to exhaust every possible investment option that would benefit the people of New York. We are constantly searching for quality but

overlooked opportunities. That search led us to Israel Bonds.’

continued on page 30

continued on page 30

New York City Comptroller William C.Thompson Jr. (right) with Nir Barkat,mayor of Jerusalem, in Israel last week.

catch up with their paperwork.Between 1968 and 1970, more

than 100 NYSE member firms wentout of business. Some thought theindustry would never recover, but itcame back bigger than before.Remember “Mayday,” — May 1st,1975 — the day fixed commissionsended on The New York StockExchange? Many wondered if bro-kerages could survive without thatsame revenue stream, but the talent-ed firms adjusted and became morecompetitive than before.

And of course, we all rememberthe Crash in 1987, when some qui-etly whispered that it was the dawnof a new depression. And again,Wall Street rebounded to becomestronger than ever.

Sure, the future will be different.It is strange that names like BearStearns and Lehman Brothers willno longer be a part of the dailyfinancial dialogue. But then again,historic names like SalomonBrothers, Drexel Burnham Lambertand E.F. Hutton have disappearedfor one reason or another, but theindustry keeps moving forward aslong as we are firmly committed toinnovation and responsible invest-ment strategies.

All of us at the New York CityPension Funds have been committedto this approach. As many of youknow, I serve as custodian andinvestment advisor to all five of theCity’s pension funds, with a com-bined portfolio of approximately $82billion in assets under management.

Stewardship of the funds is thusone of the most important duties ofmy office. I have the fiduciaryresponsibility of investing and pro-tecting the Funds for over 640,000active and retired members. I takethis responsibility very seriously.My Bureau of Asset Managementassists the Pension Funds in select-ing investment advisors and consul-tants. This can be a rigorous processbecause each Pension Fund is finan-cially independent and has its ownboard of trustees.

Each Board establishes its ownasset allocation policy and defines itsown investment objectives.Although my office plays an impor-tant role in the process, there are amultitude of other voices involvedwith these investment decisions.With every decision and with everyaction, we are mindful that the Fundsrepresent the hard work and futuresof hundreds of thousands of hard-working New Yorkers, and everyone of them has the right to expectresponsible investment and healthygrowth.

When I started as New YorkCity comptroller in 2002, the

dot-com bubble was in the middle ofbursting and the New York CityPension Funds were being hit hard.On my first day, the Dow JonesIndustrial Average stood at roughly10,000. Ten months later, it closedjust below 7,300. Because a largeportion of the Funds were tied direct-ly to the U.S. domestic market whenI entered office, the view from mydesk was painful. In that environ-ment, it was clear to me that the dayswhen public pension plans can relyon just index funds and bonds werelong gone.

Because of declining returns intraditional investments and becauseof increasing liabilities, we needed tostart creating additional valuethrough active management.

We started reducing our exposureto this risk by diversifying our portfo-lio beyond the traditional asset class-es. By dramatically increasing theamount we invest in private equity,real estate, international equities andemerging markets to name a few, weare preserving the long-term health ofour portfolio. The strategy has paidoff, as we continue to weather therecent turmoil in the markets.

Part of this progress is due to ourincreased focus on private equity,which has proven to be an importantvehicle for us. For example, we havetaken our first step to actively investin vehicles geared toward emergingenvironmental technologies such asrenewable energy. Last year, weclosed our first investment in theclean technology space. We havecommitted close to $200 million in aclean energy and technology fund.

Although this is just a first step, itis an exciting step. In addition to thegenerous returns we hope to gener-ate with our investment, we want tomake sure that we are part of thedevelopment of clean technology.

We have also increased our expo-sure to international equity. Twentypercent of our public equity holdingsare now in international assets, ofwhich a significant portion is active-ly managed. This includes more than

$100 million that we have investedin nearly 50 Israeli companies.Despite the recent downturn in thissector, our five-year performancehas been profitable.

Our philosophy is to exhaustevery option and every possible

investment that would benefit thepeople of New York. We are con-stantly searching for quality butoverlooked opportunities. Thatsearch led us to Israel Bonds.

In 2003, our Teachers RetirementSystem purchased $5 million inState of Israel LIBOR floating ratebonds. A year later, we investedanother $5 million. And last year, theNew York City Employees’Retirement System purchased anadditional $15 million of State ofIsrael fixed-rate bonds.

I am proud that the New York CityPension Funds have been able to servethe best financial interests of its mem-bers while furthering a tradition ofsupport for a great ally. These invest-ments have strengthened our portfo-lio and demonstrated our continuedconfidence in Israel’s economy.

As I look back at the way the Fundshave evolved, I am proud of the valuewe have added through active man-agement. As a result, we will leavethe Funds in a much healthier posi-tion than we found them.

By further diversifying our assetallocation, we not only safeguardedour portfolios from the wide anddebilitating swings we have seen inrecent months, but we have helpedthem to grow as we honor our fun-damental commitment to the retireeswhom we serve.

Looking forward, there is muchwork to be done. These are uncertaintimes and it will take months — ifnot years — to understand the fullimpact of the current crisis.

However, forums like this are animportant step toward understandingwhat we need to do to shape a securi-ties industry that is both healthy andresponsible. That is why I am sopleased to be here at the Tel AvivAnnual Institutional InvestmentConference.

schools) will reopen them. Perhapsprayer services will be held in alocal synagogue, and the childrenwill go from there to the charterschool and back to the synagoguefor religious instruction after theofficial school day ends. Perhapswith that type of arrangement char-ter schools can be utilized effective-ly through sixth or even eighthgrade. Personally, I do not see char-ter schools working at the highschool level, but that is irrelevant.What is important is that the com-munity focus on these issues, shareinformation, experiment and try torelieve the burdens of Jewish edu-cation that currently fall on the fam-ilies of young children (when theycan least afford it).

Simply put, communal institu-tions must step up to the plate —federations, synagogues and the dayschools themselves must start tograpple with the issue of charterschools. What I hope is that ulti-mately school vouchers willbecome the norm and charterschools are the first step in a transi-tion away from the dominance ofpublic schools to a more balancedpublic and private educational sys-tem. For the moment, though, wemust play the hand that is beingdealt.

Regardless of what the Jewishcommunity does, I believe that

the charter school movement will

grow. Ironically, the DemocraticParty, which is supported in theextreme by teachers’ unions, faces adilemma. In turns out that inner-city blacks are among the biggestsupporters of both charter schoolsand vouchers, and yet this is a keyconstituency of the DemocraticParty. The issue is currently playingout over whether Washington willcontinue to get funding from thefederal government for the D.C.charter schools over the oppositionof teachers’ unions.

The biggest question mark of allfor me, however, is something dif-ferent. Regardless of what happenswith respect to the funding ofJewish education, the end result forthe coming generation will be, ascharter schools and vouchers beginto gain traction, a vast increase inChristian religious education. Whatwill this mean for the future ofAmerica as a religiously tolerantlocale? What must be done toensure that religious institutions arepermitted to have freedom of reli-gion, and not undermine the princi-ples of tolerance that have been thehallmark of the American ideal?

This issue must be studied ingreat detail. Instead, thus far, I haveessentially seen communal leadersand institutions react with ostrich-like ignorance, hoping that the issuewill simply go away. Such is thestate of American Jewish leadershipon this issue at the moment.

Joseph R. Rackman is a partnerin the New York office of the inter-national law firm of Hogan &Hartson LLP.

Perilscontinued from page 4

Faithcontinued from page 4

30 JEWISH WORLD • MAY 15-21, 2009

WESTHAMPTWESTHAMPTONONBABATH &TH & TENNIS CLUBTENNIS CLUB

Spend The Summer At Our Pool and Beach

Deck Memberships AvailableFamily Membership $2,500Single Membership $2,000

Amenities Include:

• Private Beach• Fitness Center• Outdoor Heated Pool• Five Har-Tru Tennis Courts• Day Spa & Beauty Salon• Fine Dining Restaurants• Outdoor Tiki Bar & Grill• Transient & Seasonal Boat

Slips Available• Walk to Hampton Synagogue

& Shul on Dune Road

Don’t miss out on agreat summer!

Call for more information:

631-288-2500 ext. 2

231 Dune Roadwww.bathandtennis.com

Special rates plus receive the 3rd night free for Shavuot, MemorialDay Weekend and the month of June.

• Walking distance to synagogue.Call the following number for special rates and a special offer for readers of

our newspapers.631-288-2500

Last week, New York CityComptroller William C.

Thompson Jr. called for an amend-ment to Congressman BarneyFrank’s recently introduced legisla-tion, H.R. 1327, or the “IranSanctions Enabling Act of 2009.”The act would authorize state andlocal governments to divest theirassets from companies that do busi-ness with Iran. Thompson’s amend-ment would protect state and localgovernment institutional investorsfrom legal liability if they decide to

divest from such firms.Thompson stressed that nations

such as Iran continue to engage instate-sponsored terrorism, andapplauded Frank’s legislation. But henoted that the act “would not addresscertain significant legal risks associ-ated with divestment.” The amend-ment’s additional protections “willhelp institutional investors better dis-charge their duties and simultaneous-ly advance humanitarian efforts andsecurity around the globe,”Thompson said.

Divesting from Iran