Why is it that the Bernie Madoff scandal so intrigues me? On February 8, some deep psychological thing had me watching a Congressional hearing about Madoff instead of the golf tournament I would have typically watched on a cold February Sunday afternoon.
I convince myself it's professional, the information technology (IT) angle. This could be the biggest IT scandal on Wall St. since E.F. Hutton (pick your Hutton scandal; they all required good old Data General computers).
But there is more to it than that. I howl over the millionaire widows and orphans stories in the mainstream media. On February 7 Reuters Boston bureau led with a California (go figure!) sob story about a 90-year-old guy who lost everything to Madoff. He can't pay his mortagage. On his houses. So he is stocking shelves at the local Piggly Wiggly 12 hours a week to make up for it. Think about that: 90 years old. Houses plural. Mortgage. And $50 a week net of Social Security is going to make up for the lost income on the $750,000 he thought he had with Madoff?
It has to be a group of five bored guys at the JCHE home in Brighton, MA with great senses of humor saying, "You know what, let's call up Mrs. Bloomberg of Medford's son and make up this story about how stupid we Jews are. I bet he prints it on that little financial news service of his."
I am afraid the deep psychological thing that intrigues me is the antisemitism running right below the surface of the Madoff scandal. I saw an Internet comment this weekend that everyone on the Madoff investors list released February 5 were "dentists, furniture-store owners and jewelers."
I fear it's going to get worse based on watching the Congressional hearing, which starred the greatest Congressional-hearing paranoid delusional since Howard Hunt (or was it Gordon Liddy?).
I ask myself if I'm fascinated with the Madoff scandal because I am subconciously anti-semitic? No, thank god, I'm just anti-Jesuit. (Truth in advertising: I was taught by the Holy Cross Fathers but one of my kids is a Fordham/Georgetown product.) Am I the only one in America who didn't buy into the story of Loyola/Boston College grad Harry Markopolus?
Of course, as Kissinger said, even paranoids have something to fear. And apparently one of Markopolus' delusions was lucid. But when he brought his charges against Madoff to the Boston office of the Securities and Exchange Commission (SEC) in 2000 and tried to "slip them" to then NY Attorney General Eliot Spitzer in 2004 and visited the NY office of the SEC in 2006, no one believed him. Could it have been because he says he was "wearing latex gloves" so his fingerprints would not show up on the paper?
As for the incident at the Kennedy Library, I hope someone called the bomb squad. (As for a Spitzer joke, I don't hit guys when they're down.)
In some tortured logic, Markopolus says he feared that if Madoff knew that Markopolus knew about the scam, Madoff would have Markopolus killed because Madoff did not want the Russian mob--who was investing with Madoff--to know about the scam. But Markopolus was a "Green Beret or a Navy Seal or Delta Force" (he was never clear which). In addition to the implications of that vis a vis the fear factor, couldn't Markopolus just have the CIA or FBI tell the Russian mob about Madoff. End of Madoff. End of scam.
Admittedly that solution is based on the fact that I watched a spy movie right after the congressional hearing. But Markopolus could have gone to the press. Wait a minute: he did and a member of his "team," Michael Ocrant, wrote about the fraud in 2001. And it's been sitting right there on the Internet since that time. And yet people kept sending Madoff billions.
The villian here is a guy Markopolus identifed as Ed Mannion (sp?) of the Boston SEC office. But remember Markopolus' paranoid-delusional condition; he may have the name wrong and to Markopolus, Mannion is a hero. I bet Mannion went to BC too. Mannion is a government employee and he knew about this Ponzi scheme for nine years. Could Mannion not just drop a dime on Madoff with a a call to the Commissioners in Washington? No, according to Markopolus, Mannion couldn't do that because of the Red-Sox/Yankee baseball rivalry. I bet Mannion even knows where Whitey is.
It was a good two and half hours of entertainment.
But the antiseitsim is going to get worse because some upstate NY congressmen came on at the end to say the boilermakers or stevedores or some union guys lost $400 million.
And the fawning congresspeople never got around to asking Harry the real question: How? Harry finally volunteered "it was IT" (which of course is why I really listened to the session). But none of the political hacks followed up.
Oh well. Deepthroat told the Washington Post to follow the money. In the Madoff case, it's follow the servers--mabye Sun (JAVA) servers--that printed out the millions of monthly statements over 20 years. (Did I say I didn't hit a guy when he was down?)
-- Dennis Byron
I feel badly for all the folks who lost their life savings. I can't help but wonder if these are the same folks who were supportive of the Reagan policies in shrinking regulation. The reason that the SEC failed to act is that our policies changed toward effective regulation. There was not anyone minding the actions of unscrupulous people who were and are swindling unwitting greedy investors.
Posted by: Alina M. Lopez Marin | March 14, 2009 at 01:10 PM