Weekend At Bernie’s Jail Cell

Diana Henriques at NYT:

Bernard L. Madoff said he never thought the collapse of his Ponzi scheme would cause the sort of destruction that has befallen his family.

In his first interview for publication since his arrest in December 2008, Mr. Madoff — looking noticeably thinner and rumpled in khaki prison garb — maintained that family members knew nothing about his crimes.

But during a private two-hour interview in a visitor room here on Tuesday, and in earlier e-mail exchanges, he asserted that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.

Mr. Madoff, who is serving a 150-year sentence, seemed frail and a bit agitated compared with the stoic calm he maintained before his incarceration in 2009, perhaps burdened by sadness over the suicide of his son Mark in December.

Besides that loss, his family also has faced stacks of lawsuits, the potential forfeiture of most of their assets, and relentless public suspicion and enmity that cut Mr. Madoff and his wife Ruth off from their children.

In many ways, however, Mr. Madoff seemed unchanged. He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.

“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”

Matt Schneider at Mediaite:

Bernie Madoff, the con artist who pleaded guilty two years ago to a series of financial crimes, gave his first jailhouse interview to The New York Times and was angry with a lot of his critics. Most notably, he attacked the news media for their “disgraceful” coverage of his son’s suicide.Appearing “noticeably slimmer,” “frail” and “agitated,” Madoff disclosed that banks and hedge funds were complicit all along and “had to know” about his schemes. He again claimed that his family was unaware of his crimes until the very end. In reporting on the interview, ABC’s Brian Ross quotes a prosecutor who concludes “Madoff is incapable of telling the truth still to this day.”

Uri Friedman at The Atlantic:

Madoff’s statements are particularly relevant at a time when Irving Picard, the trustee for Madoff’s victims, has accused JPMorgan Chase of harboring serious concerns about Madoff’s investment business but not notifying authorities or halting business with him. Yet, as Henriques notes, federal prosecutors have yet to accuse the major banks and hedge funds that dealt with Madoff “of knowingly investing in his Ponzi scheme.”

Madoff Has Helped Trustee

Madoff claimed he’s met with his victims’ trustee, Irving Picard, and provided him with information about the banks and hedge funds he did business with, though he says he hasn’t shared this information with federal prosecutors working on criminal cases.

Family Crisis Unforeseen

Madoff said he didn’t foresee the extent of the suffering his fraud would inflict on his family. His relations are confronting a barrage of lawsuits and his son, Mark, committed suicide in December. Madoff called some of the press coverage of Mark’s death “disgraceful” and stated that he didn’t attend Mark’s funeral because of prison regulations and because he didn’t want to turn the funeral into a “media circus.”

Mets Owner ‘Knew Nothing’

Picard alleges that New York Mets Owner Fred Wilpon and his brother-in-law, Saul Katz, knew or should have known from their financial dealings with Madoff that he was defrauding investors, but Madoff vehemently denies this: “They knew nothing. They knew nothing,” he asserted.

Andrew Leonard at Salon:

Should we trust him? After all, if there is one thing we know about Bernie Madoff, it is that he is one hell of a liar. But as evidence emerges that bank executives were exchanging e-mails wondering about Madoff’s amazing investment record, the possibility that the banks were purposefully looking the other way is not inconceivable.

The question is: What to do about it?

How about: Make sure government regulatory agencies entrusted with oversight over financial markets are adequately funded and staffed for the job?

Wouldn’t you know it — Obama wants to boost the budget for the Securities and Exchange Commission and the Commodity Futures Trading Commission, the two key government agencies watching over Wall Street

Jacob Heilbrunn at The National Interest:
As Frank Rich recently observed, Madoff was a “second-tier player.” But he could lead to bigger fry. The Wilpons, who own the New York Mets, are already in big financial trouble for their extensive dealings with Madoff–Donald Trump is angling to buy a majority stake in the team. Then there are the hedge funds and banks that were linked to, or in cahoots with, Madoff.

At this point Madoff has little to lose. President Obama shows little appetite for curbing the excesses that led to the last financial crash. Madoff cannot achieve redemption. His historical role as the biggest Ponizi schemer (so far) in history is set. He became the type-cast bad guy. For awhile Madoff took all the credit, if that’s the right phrase, for the malversation he oversaw. That’s changed. Now he seems to be interested in ensuring that his collaborators, witting or unwitting, also take the fall (though he is notably exempting his own family members from any knowledge of his transgressions).

Madoff’s own crediblity is shot. But if the information that he’s apparently providing to Picard pans out, then he may get his own measure of revenge for the humiliations he has suffered, and is suffering.  Balzac said that behind every great fortune is a crime. Madoff now seems intent on demonstrating the truth of that axiom. One thing seems clear: Madoff is not going to go down quietly. The aftershocks from his exposure may well continue to roil the financial world.

Joe Weisenthal at Business Insider

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Filed under Economics, The Crisis

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