David, I just read the article by Goldberg you cited and it seems the “Morality Crisis” comes down to three major events:
* The Agriprocessors issue.
* Non-Orthodox Bernie Madoff victimizing Orthodox institutions.
* The recent corruption scandal in New Jersey.
Of these, I think it is self-evident that the Madoff issue simply doesn’t belong on the list. Being a victim does not make one a criminal.
So we are left with two cases in recent news where Orthodox Jews have been accused of criminal activity. This is obviously inexcusable and something that religious Jews must take seriously. I don’t know that it really constitutes a “crisis” for an entire denomination.
I also would point out that these crimes – while inexcusable – are products of the times.
The crimes that Agriprocessors was accused of were primarily “child” labor and hiring illegal immigrants. Both of these crimes are essentially victimless in the context that we are talking (enabling a 17 year old to escape poverty would usually be a good thing). This does not mean that these laws should be ignored, but a basically moral person might well not see what is “really wrong” with giving a poor person a job that he desperately wants. Through most of history, these crimes did not even exist.
From what I understand of the charges so far, the NJ corruption issue is similar. Why do people find it necessary to pay government officials large amounts of money to allow them to conduct business? Because the government officials are too powerful and are effectively able to use their power according to their whims. The more power the government has to regulate, the more corruption there will be. This is why such scandals happen more in states like NJ, where the government regulation is out of control.
Does any of the above mean that it is acceptable according to Jewish law to ignore the law? Of course not. At the same time, Orthodox Jews are human. When faced with temptation, some of them will fall. When we create a society where decent people are constantly faced with temptation to break the law in order to function effectively, we can be sure that many otherwise decent people will fail.

Let’s set aside the implausibility of such a superficial question being asked by an actual kollel yungerman.
Let’s also set aside the rather heavy-handed representation of Pauline theology.
Let’s just look at the basic reasoning here. Why does excessive regulation bring about increased corruption? Do ALL laws have this effect?
The answer is clear if you read the entire paragraph I wrote earlier: “Because the government officials are too powerful and are effectively able to use their power according to their whims.”
The kind of regulation that inevitably generates corruption is the type that grants excessive power to government officials. When a real estate developer needs to ask permission from government officials for every single significant (and not so significant) step he takes to develop his property, and when the government officials are essentially free to help or hinder without any real recourse for the private citizen, then corruption is inevitable. The problem is not law, per se, it is those laws that empower the bureaucrat at the expense of the private citizen.
You will find few, if any, examples of such laws in halacha.
Of course, even without creating an imbalance in power between citizen and official, overly intrusive laws can have a similar effect in that people will inevitably violate the law if they feel that they cannot function according to its dictates.
This problem can certainly exist in Judaism. If one does not recognize that halachic observance is truly beneficial, and that God’s providence will certainly compensate you for any perceived losses, then halachic observance can indeed seem overwhelming and impossible.
This is why any proper Jewish education must be firmly grounded in the concepts of faith and trust in God, and an appreciation for the benefits of all the mitzvos.

LazerA is very close to the mark here. I have a very hard time understanding why anyone would hire illegal workers–and yet, a Rabbi I respect and a Haredi associate are quick to point out to me that the labor of illegals is ubiquitous–so one cannot be as pure as I would like to be. My friend tells me he happily hires illegals–knows they are illegal and thinks he is doing fine by halacha. I disagree but he is at a higher level generally so I won’t push the disagreement.
Jeffrey Goldberg is out there looking for trouble and he thinks he has a bonanza with the recent arrest of a few Rabbis, and the Agriprocessors matter.
I can’t agree that these two incidents amount to a “crisis” or a winning streak on behalf of the left in its badgering of the Orthodox community. David K attempts to go well beyond what Goldberg has in mind and on those counts–sure, we can always do a much better job.

I undertand that the Agriprocessors people did ask applicants for their papers. The applicants showed forged documents. To the best of my knowledge an employer is not required to do a background check if he sees proper looking documents. People accept Obama’s posting of his birth certification as proof of his eligibility.