[JC] told them, “Scripture says, ‘My house will be called a house of prayer,’ but you’re turning it into a gathering place for thieves!”
The opening credits of the new four-part Netflix series, Madoff: The Monster of Wall Street, features at one point cash raining down from the heavens on Wall Street. You picture bankers smiling inside knowingly on their way to work, say JPMorgan Chase. But, being an aging hippie nearing the extinction of my subspecies, I recalled the happier, spliffier days of street theater and its master practitioner, Abbie Hoffman, and one of his signature gags in August 1967 where he rained dollar bills down on Wall Street brokers from the balcony of the Exchange and watched them drop everything to snorkleporkle for the cash. Larry Sloman, author of the marvelous Steal This Dream, an oral history of the Sixties and the counterculture days, reported on Abbie’s shenanigans at Wall Street this way:
At first there was a stony surreal silence as the brokers looked up and saw a shower of currency gently wafting down. Then as the bills hit the ground, pandemonium broke out. The brokers started scrambling, pushing each other, grabbing for the money. When the avalanche subsided, they actually looked up at the gallery and demanded more. But Abbie and his friends had run out of bills, so they started throwing some pocket change down. The brokers booed. [p. 3]
Abbie pulled a similar stunt at the other end of the MIC spectrum, threatening to levitate the Pentagon (and actually getting them to negotiate how high, to Daniel Ellsberg’s delight).
Madoff: The Monster of Wall Street asks the same old question: How could this happen?
It’s not exactly an honest query. Rhetorical, maybe. For we know the answer is age-old GREED before we even begin watching. The -patho Madoff rightly blamed the success of the Ponzi on people’s greed, including his own. What comes out in this Netflix production, and no doubt others, is the melange of interests seeking to ride a secret, exclusive process to instant fiscal success, from mainstream investors like Fred Wilpon, owner of the NY Mets, to wealthy investors evading taxes in the Caymans (the funds bundles and put in the hands of Madoff) to far more nefarious players. But there’s more. In Episode 1, “A Liar, Not A Failure,” Harry Markopolos, forensic accounting and financial fraud investigator, who tried repeatedly and unsuccessfully to alert the Security and Exchanges Commission (SEC), added a cogent further explanation — even a paradox — to the willingness of people to invest in Bernie’s wizardry:
Once you realize that Bernie is managing money for some of the world’s most dangerous people, you start to worry that if you’re discovered trying to turn in Madoff, it could cost the drսg cartels and the Russians a lot of money. Money that they don’t want to lose. So, I’m at risk personally, because I’m seemingly the lone voice in the wilderness going to the authorities saying Madoff’s a fraud. So, I started carrying a gun, and I started checking my vehicle for bombs.
( tense music playing )
At the same time, this threat from the Underworld, its mystique, its self-protectiveness, its implicit habit of putting horses heads in the beds of those who crossed them, no doubt added a sense of security for investors. Besides, many of Madoff’s investors, who sheltered their money from the IRS, and from paying a fair share of their taxes, were criminals anyway. Which is to say, many of them were in love with their own deviance and winky insiderliness and those who knew that shady violent investors were involved must have felt ‘protected’. This is the stinky stench money puts out. Pecunia non olet, aber manus manum lavat, n’est-ce pas?
By my count, there have now been at least four major versions of the Bernie Madoff Ponzi scheme scandal. “Bernie Madoff: His Life and Crimes,” a documentary (CNBC, 2021); “The Wizard of Lies,” a drama starring Robert DeNiro and Michelle Pfeiffer (ABC, 2016); “The Madoff Affair,” a documentary (PBS, 2009); and this latest Netflix entry to the scandal canon. They have all tried to make sense of this Festival of Darkness that went on for almost 50 years, from roughly 1960 to 2008, and, we’re told, would have gone on longer if not for the too-big-to-fail Wall Street events of 2008, which struck the world like a Pearl Harbor event, devastating global markets almost to the point of market freefall. Wall Street was bailed out with TARP money, but the meltdown precipitated the collapse of Madoff’s Ponzi that had grown to a worth of almost $65 billion. The money might as well have disappeared in a poof of magician’s smoke. Gone. Magician with it.
So, what can we learn from this latest iteration of the fall of the Madoffs? It can’t be deemed a tragedy — at least not in the classic ancient sense where we watch hubris at work on the psyches of a noble family and pack our hamartia hankies and wait for catharsis and release from emotional tension, with the promise of renewal contained in the moral. Bernie Madoff may have been king of his money jungle, but his story never rises to the gobsmack moment Oedipus Rex has when he realizes he’s married to mom. Ouch. And it doesn’t have any of the drama of Macbeth, although one major contributor to Madoff’s funds, French aristocrat René-Thierry Magon de la Villehuchet, who had enticed half of Europe’s elites to “invest” their money, ends up committing suicide. As Netflix has it, in Episode 4, “It happened 11 days after Bernie turned himself in. Thierry locked himself in his office that night, and he sliced his arms open and bled into a trashcan so he wouldn’t make a mess for the cleaning lady.” How considerate. Don’t the poor suffer enough? the honorable aristocrat seems to be messaging from the grave. But there’s no tragedy here. Pathos, maybe, if you are in a philanthropic mood. One thinks of the Sackler family taking so many lives with oxycontin and blaming those who got hooked on the drug, pushed shamelessly by the family, who only wished to make zillions of dollars. It’s an open question what the Netflix series adds to the unsolved mystery of what made Bernie tick.
Madoff: The Monster of Wall Street draws the conclusion that Madoff was a sociopath. It really begins that way. In Episode 1, “A Liar, Not A Failure,” we start by empathizing with the trope of not following in the footsteps of a father who failed. So, Bernie would rather be remembered as a liar and fraud before being thought of as a failure. But his plumber-stockbroker father was no failure as a man; he provided for his family. And he gave sound advice to Bernie’s messenger, William Nasi, on working stocks:
“He told me, ‘Never, ever, ever invest on Wall Street. It is run by crooks, and SOBs [sons of bitches]. I don’t trust them. Put your own money in a savings bank and you control it yourself. A dollar is worth a dollar. Don’t let greed get into your psyche.’” [“Life Inside the Weird World of Bernie Madoff, Who Died on Wednesday,” Joe Lauria, Consortium News, March 22, 2009]
You would have to presume that Bernie was given the same or similar advice — and intentionally opted to work with crooks. Indeed, in this same piece, Nasi describes Madoff’s shine for making a buck: “Money,” said Nasi. “That activated his neurological circuits to the highest. That lit his brain up.” Interesting way of putting it, as Madoff’s success, and his movement out of penny stocks, began when was one of the first to incorporate computers into his business that accelerated his trading and made his services more attractive to investors — something the episode does a nice job explaining.
IMDB provides a succinct description of what happens in Episode 2, “Don’t Ask, Don’t Tell Transcript” : As word of Madoff’s seemingly golden touch spreads from Wall Street to Palm Beach, his empire branches out into hedge funds – and draws scrutiny. It draws scrutiny but not enough. The SEC, which could have stopped the proceedings early, simply punted. Madoff had two floors in the so-called Lipstick Building (architectural shape) at his disposal, one for legitimate business (19th) and one for his illegally unlicensed “investment advisory” services (17th floor), where all the fake paper records were generated. The investment advisory floor was run by Frank DiPascali, who is described by Ellen Hales, a fellow employee:
Frank DiPascali was a guy that you would expect to run numbers or be shooting craps in the street. He was definitely, you know, a smart guy, but, you know, like, a streetwise guy. If Frank had been a mobster, he would have been the one telling people who to hit.
Bernie hadn’t gone to Harvard, we’re told, and he seems to have preferred to be surrounded by academic underachievers who were keen to learn and serve and were happy to receive wages far in excess of their expectations. Loyalty bought. When the game was over, most pf them pretended that they knew nothing of the Ponzi operation, though we’re shown how they helped ‘launder’ receipts and invoices, smudging them on the floor and cooling them down in the fridge prior to their handover to the SEC. It’s almost a joke to say they suspected but didn’t know the details: Madoff absorbed money and never invested any of it, and refused to do what everybody else had to do, which is openly show how and when. Instead, he threatened to kick over-inquisitive investors out of the club. Bottom line: Bernie had a multi-billion dollar stash of cash at his disposal and as long as long as withdrawal checks didn’t bounce he could go on for a long time. The 2008 meltdown fatally slowed down investment cash.
IMDB tells us that in Episode 3 “Competitors investigate Madoff’s impossible numbers and alert the Securities and Exchange Commission, but the agency shrugs off multiple red flags.” And in Episode 4, they tell us, “Madoff’s scheme is exposed amid the 2008 financial market crisis. His victims’ lives are upended as they trace years of obstacles to recoup their losses.” So, the SEC failed miserably in multiple instances. Crook. Caught. Devastation of Lives. Lamentations and Recriminations. Harry Markopolos finally gets to say, I told you so, and to lambaste the SEC at a Congressional hearing:
But, as usual, they all pretend that such failures are a one-off, instead of endemic.
At the end of Episode 4, there is synthetic dialogue between Bruce Dubinsky, a forensic accountant, and Harry Markopolos, about the future that goes like this:
Markopolos: People want to believe in good returns without downside risk. Everybody wants that in their portfolio, but they’re chasing the Holy Grail. The Holy Grail doesn’t exist in real life, nor does it exist in finance. Madoff was a fake. There was nothing real there.
Dubinsky: And so could there be another Bernie Madoff in the future? There will be another Bernie Madoff. That will happen. Mark my words.
( dramatic music continues )
Yes, of course there’ll be more frauds of monster proportions. We are dealing with -pathos, and finance, especially, is where they wink and nod and play like God. We had the Wall Street meltdown of 1987. The day before the 9/11 events, Secretary of Defense, Donald Rumsfeld, told the public, with astonishing nonchalance, that $2.3 Trillion in Pentagon spending could not be accounted for. This should seem impossible, as well as a total outrage, but then the attacks came and the “more important” war on Terror was born and no scandal could be brooked. A few months later, there was the Enron scandal — “likely the largest, most complicated, and most notorious accounting scandal of all time” [CFI] The Bush administration was politically and financially connected to Enron, according to MarketWatch. But the Commander-in-Chief had no time to for such trivialities: A war was on. Then, in 2008, Yes We Can turned into No We Can’t as the Wall Street meltdown ruined Obama’s planned social projects initiative, the earmarked monies becoming the TARP bailout of Too Big To Fail bullshitters. And, just as Madoff was the first to take advantage of computerized trading to pull in “investor” billions, so, too, more recently, has Sam Bankman-Fried (aptly named) found a way to astonish all with crypto fraud (and there have been a rash of others lately, too). Government is the problem, Reagan once said, and that’s so true.
Even in the Sackler case, we discover in reading that the FDA was a total failure in its regulatory mission of ensuring safety by making sure the medicinal claims were accurate and not fraudulent, and to make pay those who lied about their wares, as the Sacklers did with oxycontin. (The arrogant and totally unrepentant Sacklers, after being heavily fined by courts in the US, although immediately appealed, went on to push its opium-based product to, of all places, China). The system corruption of rotting capitalism stinketh.
Ordinary Americans appear to be on the brink of total and catastrophic economic meltdown as Wall Street and its investors continue to embrace fraud and subterfuge just 15 years after the last meltdown. Some observers see the chaos such activity creates as a sign of the end of the Gold Rush that began after the fall of the Berlin Wall. In a recent WaPo piece, “The worry in Davos: Globalization is under siege,” they find that the global elites (Madoffians, no doubt) are bumbling around a bit in a sign that chaos is at hand:
Instead of a “post-crisis” moment, it’s more common to talk of a “permacrisis,” of a world buckling under a never-ending cascade of calamity — war, climate catastrophe, energy price chaos, inflation, epidemics of hunger and disease, political instability and widening economic inequity. This year’s WEF theme, a plaintive appeal to find “cooperation in a fragmented world,” seems more possessed by the ruptures that have already taken place.
Has the rooster come home to crow?
