One year ago, Madonna squatted in the rust-colored dirt of a sprawling empty lot outside Lilongwe, the capital of Malawi, one of the poorest countries in the world. With curious villagers and invited photographers crowding around, she laid the ceremonial first brick for a planned $15 million girls' academy, a noble mission in a nation where only 27 percent of girls attend secondary school. In a blog post on the website of her Raising Malawi foundation, she wrote that the brick, inscribed with the words "Dare to Dream," was "not just the bedrock to a school — it is a foundation for our shared future."
Last week it was announced that the future would not be built. Despite the fundraising success of Raising Malawi, which collected a reported $18 million in donations and spent $3.8 million on the planned academy, the girls' school has been abandoned and the Raising Malawi foundation has imploded.
From its inception in 2006, the pop superstar has been the face of Raising Malawi, generating headlines around the world by adopting two Malawian children, writing and producing a documentary about Malawian orphans, and hosting high-profile fundraisers, including a star-studded event in 2008 co-hosted by Gucci in a 42,000-square-foot transparent tent on the north lawn of United Nations headquarters. "I want credibility as a philanthropic organization," Madonna told the $2,500-a-plate crowd.
To understand what went wrong, one has to look at Madonna's partner in the foundation, a mysterious and controversial organization called the Kabbalah Centre International, which is now a focus of federal investigators. The center is a Jewish mystical organization that follows a set of esoteric teachings called Kabbalah, which adherents believe explains the relationship between humans and their creator and our true purpose in the universe. Madonna has said that she turned to Kabbalah in 1996 when she was pregnant, exhausted from Evita, and looking for an anchor. Since then she has reportedly donated at least $18 million of her personal fortune to the Kabbalah Centre.
The center was founded by Philip Berg, a Brooklyn-born New York Life insurance agent whose first wife happened to be the niece of a famous Kabbalist, Rabbi Yehuda Brandwein. Berg sired eight children with her, but soon after the rabbi's death in 1969 he left his wife for his former secretary, Karen. Two years later they launched their own idiosyncratic brand of Kabbalism, popularizing what had until then been teachings reserved for advanced Talmudic scholars. The Bergs eventually expanded to 77 centers and study groups around the world.
The Kabbalah Centre's impressive growth has been paralleled by the volume of its detractors, some of whom have labeled it "Jewish Scientology." Disaffected followers have accused Berg and his family of treating congregants like personal servants, housing them four to a bedroom, paying them a $35-a-month stipend, and advising them to apply for food stamps. One prominent critic, Rabbi Immanuel Schochet, has said, "They are distorting Kabbalah...taking some of our sacred books and reducing it to mumbo-jumbo, all kinds of hocus-pocus."
Berg, who is now 81 and referred to by insiders as "the Rav" (an honorific meaning teacher), is still very much the patriarch of the Kabbalah Centre, despite a stroke in 2004. But day-to-day operations are controlled by his wife, Karen, 68, and their two sons, Michael, 37, and Yehuda, 38, all of whom share the title of codirector.
It's unclear when Madonna, a famously savvy businesswoman, learned about the internal problems in her foundation or the degree to which she is aware of what appear to be a litany of questionable practices at the center. (Madonna declined to speak directly to Newsweek for this article.)
Kabbalah means "receive" in Hebrew, and that's certainly what it has meant to the Bergs. Four of the five Berg families live in Beverly Hills mansions owned and remodeled by the center. Building permits alone on three of the Berg homes total $1.4 million. Karen and Philip's house, the third the center has provided for them in the past decade, boasts a $30,000 swimming pool. The center routinely pays the expenses accumulated on Karen's credit cards, which include a personal AmEx card with a $31,000 limit and, in the past few years, three Bank of America cards with a combined $81,000 limit. The center covers the Berg families' food, furniture, clothing, gas, nannies, tutors, gardeners, housekeepers, personal assistants, and more exotic indulgences such as luxury cars, first-class flights, and spas. The Bergs' lavish lifestyle, one executive says, is "100 percent subsidized."
Kabbalah Centre tax attorney Shane Hamilton contends that the Bergs include ordained rabbis who are "treated as ministers of the Gospel" and are thus entitled to "a parsonage as part of their compensation." Hamilton says some household services are provided by chevre, center members who take a vow of service and are supplied with basic necessities in exchange for 12-hour days of labor. Hamilton will not "confirm or deny the taxability of any of the specific services" and also declines to say whether the chevre, or the Bergs, pay any income taxes.
The Bergs' lifestyle seems extraordinary, especially in light of the application the center filed with the IRS in 1998 seeking tax exemption as a church. To the question of whether "any funds or property of the organization" were to be used by any minister or officer "for his or her own personal needs and convenience," the center answered that members of the religious order (including the Bergs) "have taken a vow of poverty" and look to the center "for their meals, lodging and other subsistence." Paradoxically, while the center takes full advantage of tax laws benefiting religious organizations, its website states that "Kabbalah is not a religion."
Nelson Boord, the center's CFO until 2009, has written that its six nonprofit and three for-profit entities collectively earn annual revenues of $60 million, own a $200 million real-estate portfolio, and manage a $60 million investment fund. Where does all this money come from? Boord says the center warehouses a $10 million inventory of Berg-blessed items, including $72 candles, $63 astrology sets, and $12.99 Divine Sex CDs. For $24.95 you can also buy the Rav's book Immortality, which explores "the origins of death and the spiritual tools necessary for its final disappearance from the world."
Tags: angelina jolie, anjimile oponyo, ashton kutcher, bill clinton, demi moore, education, evita, gucci, guy ritchie, heather mccomb, james van der beek, kabbalah, kabbalah centre international, kobe bryant, lance armstrong, lilongwe, madonna, malawi, mark fabiani, monica lewinsky, new york life insurance, philippe van den bossche, rabbi yehuda brandwein, raising malawi, trevor neilson, un, unicef, united nations, world bank