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Ear to the Ground

What Made Madoff Do It?

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Posted on Feb 23, 2009
Madoff
nymag.com

No Joker: New York magazine gives Madoff a makeover.

What made Bernard Madoff go off the rails, taking his business, his reputation, several family members and the fortunes of dozens of his friends with him? Blind greed? Some secret contempt for the rich whom he had helped get richer? These kinds of questions don’t usually yield easy answers, but New York magazine takes a crack at the Madoff mystery in this week’s issue. Bonus points to whoever came up with the headline, “The Monster Mensch.”


New York magazine:

Madoff, though, kept his own mess, his own monstrousness, hidden away. His operation was relentlessly predatory, systematically looting charities, longtime friends, family, as well as investors spread around the globe. And yet it seems unlikely that he was a sociopath in the classic sense, someone indifferent to the feelings of those around him. In daily life, he wasn’t callous or cruel. Just the opposite. He valued people’s good opinion and wanted to impress. He didn’t simply treat people as means to an end. He was a great boss. He took care of his employees as if they were family and, until the end, of his investors, too. “Everybody relied on Bernie,” says one longtime investor. “He was one thing you thought you could count on. And he enjoyed being counted on.”

And yet, of course, to provide for someone is to have power over them, and Bernie liked that, too. Now it was Bernie from Queens who waved his hand and granted entry to the magic kingdom where he minted money—and Bernie didn’t let in everyone. Bernie was simultaneously compassionate and grand. As he told one charity: “I promised the Steinbergs I’d take care of the American Jewish Congress,” which was the Steinbergs’ favorite cause and which gave Bernie $11 million, more than half of its endowment.

Bernie loved the Bernie Madoff he’d become, a Wall Street legend, a protector of charities, a man who was wealthy and so much more. Even if he couldn’t be that man without stealing.

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By Folktruther, February 27, 2009 at 4:28 am Link to this comment

Way to go, Cyrena!  If Madoff is going to hide some of the money, then the Swiss would be the natural henchpersons.  And mostly likely he did.  the recent NEW YORKER has an article that reports that 40+ cardborad boxes of all Madoff records were found, containing stock sales going back to 1993.  Investigators think these sales were fakes, and it would require an organization to compile them.  So the money went somewhere else, and most likely offshore.

One of the fraudsters in Texas was Stanford, who claims to be related to Leland Stanford, himself a notorous crook of the time, one of the robber barons. Others are being unearthed. And this is the whole point, not the criminality of one family, but of the entire strata of kleptocapitalism.  The SEC, the Wall Street Journal and the NYTimes all protected the Madoffs, indicating an institutional form of finanacial theiving.

Which may well involve the Swiss that you unearthed. As I’ve said before somewhere, probably we won’t get to the bottom of this without a group of Madoff truthers developing as did 9/11 truthers.  That Greek financial analyst that the SEC ignored, who reported this years ago, kickstarted this apporach, and apparently there were others even earlier.  Aspects of the Madoff fraud was apparently well known on Wall street.

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By cyrena, February 27, 2009 at 12:37 am Link to this comment

Folktruther, Ed, all,

This is what I was talking about that I’d first read a couple of weeks ago. This is the surprising follow-up to it, and it is a surprise. I expected them (the Swiss) to find a way to uphold this long, long, tradition of providing these ways for the wealthiest of the world to hide their money.

So, this is a surprising development.

A Swiss Bank Is Set to Open Its Secret Files
Published: February 18, 2009

In the hush-hush world of Swiss banking, the unthinkable is happening: secrets are spilling into the open.

http://www.nytimes.com/2009/02/19/business/worldbusiness/19ubs.html?partner=rss&emc=rss

•  “In a striking admission, UBS said that from 2000 through 2007, some of its private bankers and managers had “participated in a scheme to defraud the United States” and the I.R.S. by helping American clients set up and conceal offshore accounts. The scheme involved falsifying or not properly obtaining or filing certain tax forms required of both the bank and its clients.”

•  “UBS had fiercely resisted turning over the names, even after some executives were indicted and implicated in the offshore private banking business.
Swiss law distinguishes broadly between tax avoidance, tax evasion and tax fraud. Unlike in the United States, tax evasion is not a criminal offense under Swiss law.”

Then, this..
•  “The move by UBS to settle the case, on the eve of a Senate subcommittee hearing next Tuesday on the matter, signals how close the bank came to being indicted for not cooperating with prosecutors. Indictment is a near-certain death knell for corporations.”

I believe the new admin leaned on ‘em, and hard. They obviously already had all of the evidence, (or a lot of it) and yeah…and indictment would have spelled the end of UBS.

Anyway, do ya think any of Maddof’s billions are among these accounts to be revealed.

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By Old Ed Of The Delta, February 26, 2009 at 11:05 pm Link to this comment

Shucks! We have to accommodate the folks who pulled off a super “heist” as we are a class conscious society.

After all Bernie Madoff has not had his day in court. All persons are presumed innocent until proven guilty in a court of law. Rank has privileges on Wall Street. Sorry folks that is the way it is.

Until he is proven guilty he is entitled to maintain the lifestyle that he is accustomed too even under house arrest.

In the event he is found guilty it is not fair to throw a person of his stature in a rat hole Federal prison with a lot of low class criminal scum bags. If you do, you are seeking retribution, not justice.

The fact the he admitted that he lost control of his financial empire shows some remorse on his part and is ready to help make amends for his stupid transgressions.

I believe that he was counting on an economic surge that would have resulted in covering all the monies invested with him and eventually that would show a return to investors rather than a loss.

To paint him with the stigma of a “Ponzi scheme” is not right. He should be only called to task for exercising bad judgment in a turbulent economy that went beyond his control.

I don’t believe that he had criminal intent, but rather got caught up in this maelstrom of the world financial tribulations. In his heart I believe that he is a good person, but that does not excuse what he had done not only to himself but to other people.

If we are to find everybody who invested for people on Wall Street that lost money for them, perhaps we better start building the scaffolding to hang all the CEO’s that called the wrong shots and those in government agencies charged with the responsibility of oversight.

I believe that all of us are tempted by greed. We can use all kind of excuses that we are motivated to help our families and friends and the means justify the ends. But the bottom line should be is it the right thing to do for all?

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By Oceana, February 26, 2009 at 7:20 pm Link to this comment

It sounds like another example of “The boss has indeed gone mad – in the original sense of the word.”  Perhaps the boss has always been mad?  Starting from a false premise always leads to a dire end:  http://www.avnery-news.co.il/english/index.html 

As Mr. Madoff lives comfortably in his penthouse while others are facing the cruel reality of the consequences of his monstrous theft thrusts down to every segment of society the black flag continues to wave http://www.avnery-news.co.il/english/index.html

Mr. Madoff should be tried for the crimes he has committed as I hope Israel will be tried for its crimes against the indigenous community of Palestine.  The law of analogy and correspondence always holds true as the macro so the micro.  In this case it holds true until the cycle of violence is stopped.  The molester who was molested as a child does not have the license to molest another.  The molester must admit his act of violence (its crime) against its victim, stop the crime, stop blaming the victim for its own criminal acts, and make restitution.  The victim’s voice must be reclaimed and acknowledged and stopped being ignored by the community however far reaching it may expand.  Only then can peace be justly and humanely pursued. 

The Returns of Zionism, Myths, Politics and Scholarship in Israel: http://www.versobooks.com/books/nopqrs/nopq-titles/piterberg_g_returns_of_zionism.shtml

Palestine Remembered: http://www.palestineremembered.com/

Let us not forget Israel’s most recent lies as documented in the London Review of Books, Israel’s Lies, Henry Siegman: http://www.lrb.co.uk/v31/n02/sieg01_.html

Let us not forget Mr. Madoff’s lies as they are currently being manifested and documented.

May justice reign for the victims and perpetrators of these outrageous crimes!

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By cyrena, February 26, 2009 at 7:04 pm Link to this comment

By Folktruther, February 26 at 2:03 am #

You know what, Cyrena, Ed, I’ll bet he put at least part of the money in drugs.  He was getting drug money to launder according to the financial consultant that fingered him years ago, and if he wasn’t buying stocks, he had to put the money somewhere.  You don’t keep 50 billion dollars under the mattress.

Or possibly, as Psmith suggests, he was involved with Isreal some way, and this involvement included drugs.  Just speculation so far.  An Ed is right about detailing all the fake trades, which he almost certainly couldn’t do without help, and probable involvement of his family.

This may be the reason that the SEC, Wall Sreet Journal and NYTimes protected him.  They figured he was good for the money despite all the easily checked fakery.  That it was drug money they may have felt was none of their business.  And if Israel was involved, they didn’t want any trouble with it.”

~~~~

FolkT
I agree that all of these are possibilities, but I also think that JeannieMac has a point here as well,

By JEANNIEMAC, February 26 at 4:09 pm

and specifically in terms of the off-shore accounts.  (you’re right, kinda hard to stuff $50 bill in a mattress. )

That brings to mind an article I read a couple of weeks ago – (maybe not even that long, I’ll have to look for it) about the Obama gang going after this relatively small collection of US tax evaders (the 1% of the population that does this on a massive scale) and taking on the Swiss Banks to do it. I remember thinking that it sounded like a good project for a couple of colleagues that share my interest in comparative legal systems.

(International Banking and the laws that govern it are quite complex…too much for me to take on at this point in my intellectual life.)

Anyway, I also remember that when I read it, something triggered a potential ‘connection’ between the money the Obama Administration is trying to recover from these tax evaders using off-shore accounts, and all of the billions that have gone missing in the Madoff fraud.

Needless to say, this potential ‘connection’ could exist in my mind only, and I didn’t find anything in the article to suggest such a connection. But, it did cross my mind. So, same speculation.

I’ll check for that piece right now. I’m sure it was the NYT, and I read that right about the same time that the feds had finally located that other fraud criminal from Texas. (can’t remember his name either right now, but there are more of these Maddoff type operations in Texas than have or ever will be revealed. Halliburton, Enron, I could add another dozen or so from Tom DeLay’s tab, and on and on.

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By Folktruther, February 26, 2009 at 6:08 pm Link to this comment

The latest NEW YORKER reports the finding of 45 cardboard boxes of Madoff records of trades dating back to 1993.  Authorities suspect that they never occurred. 

The importance of the find is that it is obvious that this was not a one man operation, since typing all these trades was itself more than a full time job.

I would guess JENNIEMAyC that concealing 50 billion dollars was not an easy matter, and the income from it would be very low.  It doesn’t strike me that Madoff would be satisfied with the low income.

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By JEANNIEMAC, February 26, 2009 at 12:09 pm Link to this comment
(Unregistered commenter)

When I read that Madoff had not made any investments in 13 years, and yet had been making “dividend” payments to investors, I thought he had to have some way of doing this.    Depositing money into offshore and hidden accounts, where the money generates interest is the simplest way to do it .  He paid the investors with the interest generated by their own money, while he kept the principal. 
So simple, yet effective.

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By Folktruther, February 25, 2009 at 10:03 pm Link to this comment

You know what, Cyrena, Ed, I’ll bet he put at least part of the money in drugs.  He was getting drug money to launder according to the financial consultant that fingered him years ago, and if he wasn’t buying stocks, he had to put the money somewhere.  You don’t keep 50 billion dollars under the mattress.

Or possibly, as Psmith suggests, he was involved with Isreal some way, and this involvement included drugs.  Just speculation so far.  An Ed is right about detailing all the fake trades, which he almost certainly couldn’t do without help, and probable involvement of his family. 

This may be the reason that the SEC, Wall Sreet Journal and NYTimes protected him.  They figured he was good for the money despite all the easily checked fakery.  That it was drug money they may have felt was none of their business.  And if Israel was involved, they didn’t want any trouble with it.

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By cyrena, February 24, 2009 at 9:00 pm Link to this comment

Hi Ed and thanks for the link. I’d not yet had time to find it myself, and I’m anxious to send it along to those who work harder, (or at least differently) than I do, and don’t always have time to keep up with this horrible soap-opera we’re living, (or that is at least taking place in our midst.)

As I read through the piece, the irony of course had to be there…stereotypical or not. It is what it is, which is this:

•  “Customers detailed hardships they or family members were suffering because of the Madoff collapse, and many expressed anger at regulators who had not stopped Mr. Madoff and lawmakers who they say have failed to respond to the disastrous aftermath of his fraud.”

This is so stereotypical of the ‘types’ of clients that Madoff has mostly attracted. Those who never had a question about the presence (or lack thereof) of ‘regulators’, as long as those highly ‘irregular’ returns were flooding in; (and any serious investor HAD to know that these supposed stocks ‘returning’ at unbelievable rates had to be hokey) but now they’re hollering about not being ‘protected’ (from their own greed in most cases) by the regulators.
I wanna say, WELCOME to the club of the long oppressed…which is most of us who have been victimized by the same system, as we’ve watched the Oligarchy take full grip over the past 4 or so decades. “Regulators” ? Oh please.

Same with the hollering about the lawmakers, (after the fact) and their so-called failure to respond to the disastrous aftermath. What did they expect the lawmakers to do as a response to the aftermath? I’m really curious on that part.

And of course the ‘hardships’ – always the list of hardships and sufferings, and always as if these same hardships and/or sufferings have never happened to anybody else in the world. And never, ever, ever, to they consider even a kernel of personal responsibility for how this has happened to them.
This reminds me of a long ago incident with my late aunt, who was a miser that coveted material wealth at the simpleton level. I remember one holiday she was out shopping (she would drive her caddy 20 miles out of the way to save 35 cents on a pound of ground beef) and came across a guy selling cases of booze. (stolen of course, since that was a given.) Now THIS was a deal she’d release a few of the coins for.
Well of course being of criminal mind herself, she thinks she’s ‘smart’ enough to make the ‘seller’ produce and actually open one of the sealed fifths so that she could ‘test’ it, and make sure that SHE wasn’t being ‘ripped off’. (you get it there – criminal minds know better than to trust each other.) So he did, and it was fine, and she bought the case and brought it home, only to discover that the other 11 bottles were filled with colored water….brown to be precise, which sort of only added further symbolic insult to the injury. (at least in my sometimes wry view of unintended consequences of idiot actions.)

Of course she was OUTRAGED that she’d been ‘tricked’, and I’ve always been certain that she was far more distraught about being ‘tricked’ than she was about the dollar value of the loss, and all the more pissed off because she couldn’t register a complaint with somebody about it, without revealing her own complicity. (She wasn’t ‘that’ kind of simpleminded.) Oh yeah, she DID go back to the scene of the crime, and of course the perpetrators were long gone.

Anyway, this gigantic fraud perpetrated by Madoff has an element of that mentality among some of its victims, at least from my read of the many reactions since the thing broke open. That others have been victimized of far larger frauds, including those they may have directly benefited from themselves, never gives them cause for pause.

Meantime, FolkT is right to question; How many others (frauds of all shapes and sizes) are out there?

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By Bboy56, February 24, 2009 at 3:57 pm Link to this comment
(Unregistered commenter)

What made them ALL DO IT?!  They COULD, and usually got away with it!

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By Folktruther, February 24, 2009 at 11:29 am Link to this comment

No investments!  TD commenters are quite right here, something is drastically wrong.  Madoff was accused of running a Ponzi scheme to SEC an number of times, and they protected him.

they are still protecting him and his family.  The Zionist media, like the NYTimes, announces staggering news of a huge investment firm that made no investments, and then give a warm portrayal of the Madoff family.  And he is essential left free to continue his finacial affairs through his familiy.  Who supposedly turned him in.

This appears to be a financial form of the 9/11-anthrax false flag operation, which initiated the Zionist War on Terrorism.  He must have had Zionist support to run interference for him, and still has it. He had so many Zionist clients possibly because Israel was involved. But what could they be thinking of now?

His family was involved in his business and certainly must have known that he wasn’t investing the money he received in stocks.  This wasn’t a simple Ponzi scheme but something else.  But WHAT?
And how many others are there like it?  IF this was done more or less in plain sight, there must be others as well.

What is clear is that we will never know until a group of Madoff truthers are formed similar to the 9/11 truthers, since Zionists are still protecting the Madoof family, and they appear very powerful.

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Ed Harges's avatar

By Ed Harges, February 24, 2009 at 7:09 am Link to this comment

re: By cyrena, February 24 at 1:39 am:

Hi Cyrena - isn’t it unbelievable?

HE NEVER MADE ANY TRADES?!?

Doesn’t that sound like even more trouble than just making real trades but misrepresenting your profits somehow? What a headache, to keep up with a completely fictitious backlog of non-existent trades, for 13 or 15 or 20 years!

Anyway, here’s the Feb. 22 NY Times story, (excerpt and link):

Madoff Never Made Supposed Investments

The clients who trusted Bernard L. Madoff still do not know exactly what he did with their money. But they know what he did not do with it: He did not buy any of those blue-chip stocks and Treasury bills listed on their account statements over the last 13 years.

The court-appointed trustee who is winding down Mr. Madoff’s business said on Friday that his team had searched records going back almost to 1993 and found no evidence that any securities were bought for investors during that time….

http://www.nytimes.com/2009/02/21/business/21madoff.html?ref=business

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By dsmith, February 24, 2009 at 5:37 am Link to this comment
(Unregistered commenter)

Poor Bernie! He was so misunderstood.

Bullshit!

This is sprinkling sugar on a turd. Don’t want any bad press for a Jew. Can’t have people thinking there are any crooks in their religious cult.

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By cyrena, February 24, 2009 at 2:39 am Link to this comment

By Ed Harges, February 23 at 4:21 pm

“But no. The NY Times reports that he NEVER MADE ANY TRADES AT ALL, going back to at least 1993! He wasn’t trying to hide losses on bad investments - he was simply making up fictitious investments - not even in the boom-boom years when it was easy to make money trading stock on Wall Street!”

~~

Ed,

NO TRADES?!? I hadn’t seen this. I’ll take a look for the piece now.

You’re right. He couldn’t have done it without help.

I read a piece the other day (I think NYT) that the Obama Admin is going after US tax dodgers, (yep the same gang that we all know about) who have put their money in Swiss off-shore accounts. (I wanna say UBS is involved, but I can’t swear to that. I’ll need to check the piece again.)

Anyway, I remember thinking at the time, that it would most surly involve some of Bernies ‘customers’ and the ones who helped it happen.

This also reminds me of Felicity sort of ‘catching’ this same thing about the trading anyway. She had mentioned a few weeks back, that if any of the investors, (or anybody else for that matter) had simply checked to see what the market actually DID - as compared to what was on the statements he sent his clients, on any given day, they would have ‘caught it’.

No doubt. And if they knew that he hadn’t even MADE any trades, they REALLY would have ‘caught it’.

So, now they have.

Amazing….yes, both Bush Cheney Admins as well as the Clinton Admin had to have helped it along. I don’t know enough about the players in the SEC to even guess who, or why their only just now discovering this.

NO TRADES!

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By JEANNIEMAC, February 23, 2009 at 6:26 pm Link to this comment

Madoff did not have the typical Ponzi scheme where older investors are paid dividends from monies given by new investors. 
Madoff did not make any trades for 13 years, and yet 50 billion is missing?  I bet he has this money stashed in various personal bank accounts around the world, and was paying investors “dividends” from the interest generated by the principal monies in his accounts.
He probably thinks that he can make a deal to give back some of the money in return for being set free. Then he can live the rest of his life in luxury without being bothered to have to pay dividends to pesky investors.

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By Ed Harges, February 23, 2009 at 5:21 pm Link to this comment

When I first read about this, I thought, surely, that the guy was actually investing the money he was taking in, but had been desperately trying to disguise losses on the investments. I thought perhaps he was trying to believe that his business would turn around.

But no. The NY Times reports that he NEVER MADE ANY TRADES AT ALL, going back to at least 1993! He wasn’t trying to hide losses on bad investments - he was simply making up fictitious investments - not even in the boom-boom years when it was easy to make money trading stock on Wall Street!

How in blazes did he do this for so long, without a hell of a lot of help, including from people at the SEC, including people not only in the G W Bush administration but also in the Clinton administration. I mean, it must be the easiest thing to verify, that on such and such a date at such and such a time, Madoff’s firm did or did not buy x number of shares in y company for amount z!

This guy had lots and lots of help from lots of very highly placed people who seem to be getting off scot free so far.

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By Tokin Lib, February 23, 2009 at 3:56 pm Link to this comment

I do not give the sweat off a rabid rat’s ass why that scheming shit Madoff did what he did.

I know that if I had stolen one-one-ten-thousandth of what he got away with, I’d be trying to hold my cell-mate at bay with a shank right now.

Fuck Bernie Madoff. He’s taking the fall for his family, who are all every bit as dirty and compromised as he. They were all in it together. But he confesste to “preserve the family capital.” I want Bernie in jail for LIFE…

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