New York - The star’s much-lauded effort to help girls in the African nation of Malawi just imploded. In this week’s Newsweek, Wayne Barrett asks: Is Kabbalah to blame?

Madonna's Kabbalah Disaster in Malawi

Late last month, it was reported that Madonna’s Raising Malawi foundation, one of the most visible celebrity-driven charity efforts in the Third World, one that pulled in major donations from around Hollywood and elsewhere, was abandoning its planned mission: to build a $15 million girls’ academy in Malawi, one of the poorest countries in the world. A report by the Global Philanthropy Group, which Madonna brought in to represent her as trouble developed in the charity, cited two former employees of Raising Malawi as among the problems that led to the demise of the project. (Disclosure: Newsweek's website, The Daily Beast, briefly worked with the Global Philanthropy Group on a philanthropy-oriented website.)

But what really happened? In this week’s Newsweek, Wayne Barrett digs into that question and reports on a litany of questionable practices by the organization that came to be Madonna’s partner in the foundation: 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. Madonna has said that she turned to Kabbalah in 1996 to help her cope with personal issues. Since then she has reportedly donated at least $18 million to the Kabbalah Centre.

The center was founded by Philip Berg. Together with his second wife, Karen, Berg popularized what had been teachings reserved for advanced Talmudic scholars.

Kabbalah means “receive” in Hebrew, and that’s certainly what it has meant to the Bergs, Barrett says. Karen and Philip—and several of their adult children—live in Beverly Hills mansions owned and remodeled by the center. The elder Bergs' 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, with combined limits of more than $100,000. The center covers the Berg families’ food, furniture, clothing, gas, nannies, tutors, gardeners, housekeepers, personal assistants, as well as luxury cars, first-class flights, and spas. The Bergs’ lavish lifestyle, one executive says, is “100 percent subsidized.”

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.”

There have been several civil suits filed recently alleging that the Kabbalah Centre had exploited the trust of wealthy followers in order to pillage their bank accounts.

The Berg family and Madonna have hired top-level spin doctors to help them manage the Raising Malawi blowback. The Bergs brought in Mark Fabiani, a key player on the Clinton White House counsel’s damage-control team during the Monica Lewinsky scandal. Madonna hired Trevor Neilson of Global Philanthropy Group, which specializes in star donors who need a public-relations face-lift.

Fabiani and Neilson have successfully diverted attention from Madonna and the center by pinning much of the blame on Raising Malawi academy director Anjimile Oponyo, accusing her of “outlandish expenditures.” But the totals seem trivial in the face of the $3.8 million lost on the school project.

The more important fact seems to be that only $850,000 of the $3.8 million spent on the academy was paid out in Malawi. The lion’s share, almost $3 million, was spent by the Kabbalah Centre’s office in L.A.

Raising Malawi and the Kabbalah Centre have always been inextricably intertwined‚ despite efforts by others to separate them. Two months before a star-studded fundraiser in 2008 on the north lawn of United Nations headquarters in New York, co-host Gucci, concerned that it would be contributing to a religious organization, executed an agreement barring Madonna’s group from using proceeds to pay any entities “with the word Kabbalah in their names.” The day before the gala, Kabbalah officials filed an application with the IRS to gain approval for Raising Malawi to operate as a public charity in its own name. However, the submission, which was approved three months later, made Madonna’s group a subsidiary “operated, supervised, and controlled” by the Kabbalah Centre. Nonetheless, Madonna assured New York magazine several months later that Raising Malawi was “a separate entity” from Kabbalah. Gucci wound up transferring nearly $3 million to the foundation.

When Newsweek asked the center’s tax attorney Shane Hamilton how the Kabbalah Centre and Raising Malawi divided the money that was raised for Malawi, he replied: “I don’t know if they have a structure.” This fluid “intercompany debt,” as one Neilson aide described it, reinforces the charges made by critics that the center used Malawi as a fundraising tool, and that there is no way to independently determine what was really done in the name of the orphans and vulnerable children it seeks to help.

There are indications the center had made the decision to pull the plug on the girls’ school long before it was announced: The last check was sent to Malawi in July of last year, just three months after the bricklaying ceremony, and it was for a mere $8,659. There was no apparent plan to cover the costs of operating the school.

“My original vision is now on a much bigger scale,” Madonna said in a statement after the school’s collapse. “I want to reach thousands, not hundreds, of girls. I want to do more and I want to do it better.”