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Katzenberg Says Madoff Did ‘Extraordinary Damage’ (Update2)

By Rob Golum and Andy Fixmer

Jan. 8 (Bloomberg) -- Jeffrey Katzenberg, chief executive officer of DreamWorks Animation SKG Inc., said personal losses from investments with Bernard Madoff did “extraordinary damage” to his philanthropic efforts.

“The first time I heard the name Bernie Madoff was about three weeks ago when I found out that, you know, he had swindled all this money,” Katzenberg said today in an interview on CNBC.

The film-making executive is among Hollywood personalities who suffered losses at the hands of Madoff, including director Steven Spielberg and actor Kevin Bacon. Katzenberg wasn’t specific about the scope of his loss.

“This is extremely painful and humiliating for me,” Katzenberg said. “It has done extraordinary damage to my philanthropy.”

The Marilyn & Jeffrey Katzenberg Foundation listed assets of $22.1 million as of 2007, according to a September tax filing. The books were managed by Breslauer Rutman & Anderson LLC in Los Angeles. Partner Mickey Rutman is listed on Katzenberg’s 2004 employment contract with Glendale, California- based DreamWorks Animation. Gerald Breslauer is president of Spielberg’s Wunderkinder foundation, according to DreamWorks Animation and foundation tax filings.

The Katzenberg foundation filing reported two sources of income from “B Madoff”: Treasury bill interest of $220,371 and income of $98,944.

“That this man is actually walking free today I think is a disgrace,” Katzenberg said on CNBC. “And this guy is living in a $7 million apartment today walking free. There is something very, very wrong.”

Katzenberg declined further comment, DreamWorks spokesman Rich Sullivan said in an e-mail.

Motion Picture Fund

The foundation’s donations in 2007 totaled $455,333, according to the tax filing, with the largest sum, $100,000, going to the Motion Picture & Television Fund. He also gave to the Michael J. Fox Foundation. Katzenberg’s family trust made contributions of $2.65 million to the foundation in that year.

Katzenberg, 58, is chairman of the Motion Picture & Television Fund Foundation’s board of directors, and called the Hollywood charitable association his top priority in a June 16 article in Variety. He is also on the board of AIDS Project Los Angeles and the Simon Wiesenthal Center, Variety said.

The executive controls DreamWorks Animation, the studio behind the “Shrek” films, through his ownership of special voting shares with David Geffen, a co-founder of the company with Katzenberg and Spielberg.

Spielberg’s Wunderkinder foundation listed assets of $73.3 million in a fiscal 2007 tax return dated July 8, 2008, and income of $126,093 from B. Madoff Investment Securities. The organization’s books also were managed by Breslauer Rutman.

Spielberg, Wunderkinder

The foundation listed contributions of $5.15 million and 2.21 million shares of DreamWorks Animation stock. It also reported DreamWorks Animation share sales of $46.4 million. In August, Wunderkinder filed to sell an additional $21.8 million in DreamWorks Animation stock.

Wunderkinder paid out $8.62 million in grants and donations. The biggest beneficiary was Cedars-Sinai Medical Center in Los Angeles, which received $2 million. Other large recipients included the International Rescue Committee Inc., at $1 million, Marlborough School in Los Angeles, at $1 million, and New Visions Foundation at $1 million.

Spielberg, 62, declined to comment about his Madoff investment, spokesman Marvin Levy said.

To contact the reporter on this story: Rob Golum in Los Angeles at rgolum@bloomberg.net; Andy Fixmer in Los Angeles at afixmer@bloomberg.net

Last Updated: January 8, 2009 19:58 EST

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