An organization founded to ensure that investment firms conduct themselves ethically counts a charity funded by a close associate of fraudster Bernie Madoff as one of its largest donors, tax filings show.
The Private Equity Stakeholder Project was founded in 2017 as a “nonprofit watchdog” intended to ensure that companies owned by private equity treat their workers, customers, and the environment fairly. The Freedom Together Foundation, which is funded by the estate of Madoff associate Jeffry Picower, has emerged as one of PESP’s most important funders, contributing more than 10% of its total revenue in 2024, the most recent year for which data is available.
Picower is believed to have been the single-largest beneficiary of Madoff’s infamous Ponzi scheme, taking roughly $7.2 billion in profits from the operation, personally and through related entities, during its more than two-decade run. In 2010, the year following Picower’s death, the billionaire’s estate agreed to pay the money back to victims of the scheme. While the money was repaid, Picower was nonetheless able to invest it and enrich himself during his lifetime, the proceeds of said ventures going on to finance his philanthropic operations.
The Freedom Together Foundation, founded by Picower’s widow in 2011 and funded by her late husband’s estate, is one such charitable operation. Even as recently as 2024, the estate was pouring seven-figure sums into the foundation. Picower’s widow, Barbara, serves as the chairwoman of the board for the Freedom Together Foundation, where she draws a modest salary.
Since 2019, the Freedom Together Foundation has given $900,000 to PESP. Over that period, PESP has accused private equity firms of enabling fraud and misleading consumers, not dissimilar to what Madoff was found guilty of doing during his lifetime.
In 2021 testimony to the House Ways and Means Committee, Eileen O’Grady, then a researcher at PESP, argued that private equity’s increasing presence in the healthcare industry had increased the risk of fraud in public health programs. She further argued that private equity firms use creative accounting to boost their profits while saddling medical providers with debt and risking them going under. O’Grady gave similar testimony to the Senate Health, Education, Labor, and Pensions Committee in 2024.
PESP has been broadly critical of private equity over nearly a decade of operation, arguing that purportedly irresponsible financial management practices from said firms have consistently exposed workers to high levels of job insecurity and failed to compensate them fairly. Additionally, they’ve accused private equity players of colluding with each other to artificially inflate housing prices and of engaging in rent gouging.
THIS UNION CUT A CHECK TO A BUSINESS WATCHDOG. WEEKS LATER, THEY WERE DOING ITS BIDDING
Freedom Together Foundation holds financial interests in many of the specific firms PESP has criticized.
The foundation, for instance, had $20.6 million in holdings with the Carlyle Group as of 2024, according to its most recent tax filings. The Carlyle Group is one of PESP’s most frequent targets of criticism, with the latter accusing the former of misleading the public regarding its environmental record, engaging in union busting, and inflating housing costs.
The Brookfield Corporation, another private equity firm frequently criticized by PESP, is also present in Freedom Together Foundation’s endowment, with the charity holding roughly $4.6 million in assets linked to the firm. Similar to Carlyle, PESP has accused Brookfield of skirting federal disclosure requirements, union busting, and making money off fossil fuels despite publicly taking an eco-friendly stance.
PESP and Freedom Together Foundation did not respond to requests for comment.