Jewish Journal


December 22, 2008

Being Bernie: A theory


Last night at a dinner party, the talk was about Madoff, as I’m sure it is at Hannukah parties and Holiday get-togethers everywhere.

One attendee who had a long and storied career in finance told me that he knew Madoff and was shocked—“Madoff was a pillar,” he said, “He was head of Nasdaq!” But all those years of returns, didn’t that make you suspicious? I asked. “I never thought it was a Ponzi scheme,” he said, “What I thought was going on was that he was front-running…, that’s how I thought he got those returns” (“front running is a form of trading, which is illegal, and consists of making trades ahead of a large order, in order to get a better price and make a profit. In Madof’s case, since he controlled such large investments, he had the power to make make large trades and to know those large trades were about to happen).

Another guest, who works in the literary and difital world had a more charitable take on things: “Madoff did what he did, not because he wanted to do bad and defraud clients, but because he wanted to do good and couldn’t deliver and then fell behind…..”

And as he said it, a lightbulb of sorts went off in my head. Madoff liked being the guy who delivered 10% returns come hell or high water. Madoff liked being “Uncle Bernie,” the so-called “Jewish T-Bill.” Madoff like being the philanthropist who gave to Jewish charities, who helped people,. who made a difference.

And in order to maintain being Bernie Madoff, Madoff needed cash, Madoff needed new investors. Madoff built a giant Ponzi scheme. 

In the end Madoff was no different than Whitey Ford who cut his ball, and greased his hair to rub it on the ball, to insure that he could deliver the strikes he was famous for. Even Bernie Madoff could not support being Bernie Madoff.

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