As Madoff was primarily a Democratic doner, seems proper that Obama
ask that his party do so...

http://volokh.com/archives/archive_2009_03_08-2009_03_14.shtml#1236959007

>>> Can Politicians Keep Madoff's Contributions?

Looks like Madoff going to the clink is also going to mean the end of
a serious money train for a lot of politicians according to this
report by Open Secrets.

As recently as September 2008 he wrote a $25,000 check to the
Democratic Senatorial Campaign Committee (see here).

Googling around I haven't been able to find any definitive report on
whether recipients of his largesse will return the contribution. This
story indicates that Congressman Markey will give away the equivalent
to charity, but it seems unclear on many of the others.

An interesting legal question is whether even if the recipients, such
as the DSCC, want to keep these funds whether they actually can. These
contributions all look like classic fraudulent transfers. Under the
Uniform Fraudulent Transfer Act section 5 a transfer is fraudulent if
"if the debtor made the transfer or incurred the obligation without
receiving a reasonably equivalent value in exchange for the transfer
or obligation and the debtor was insolvent at that time or the debtor
became insolvent as a result of the transfer or obligation."

Clearly Madoff was insolvent at the time of these transfers in light
of his contingent liabilities. Moreover, I can't see how a political
donation could be seen to be anything but a transfer for less than
"reasonably equivalent value" as that term traditionally has been
defined.

Congress amended the bankruptcy laws a few years ago to protect
transfers to charitable organizations but that wouldn't apply to
political organizations.
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