When I first met him in prison, my first impression was how polished he had become since I had known him 15 years earlier, even in his prison uniform. Every crease is crisp, every button is buttoned. His belt is shiny, his shoes gleam. Very much the dandy, even in prison. And very much in control of our conversation. He had a very engaging, low-key style. Never took his eyes off of me. [He] leaned forward and was very interested in everything I had to say. A few little jokes, a little bit of flattery. But very much on-message.Next up - what marriage really means:
When I saw him the second time, after his son’s suicide, I was stunned at the change in him. From across the room, I would not have recognized him as the same man. So much thinner. In fact, the uniform involves one of the those web belts and he had the belt pulled so tight that the end of it was folded under to keep it from flopping. One of his buttons on his shirt was undone and he didn’t notice it until about halfway through. He buttoned it up. This had been an immaculately groomed, crisp, confident man back in August. In February, he seemed to holding on to his control with both hands. Fiercely. No jokes. No humor. Barely a smile. And this was two months after his son’s suicide. He was clearly devastated by that.
Madoff’s sons were deeply upset that Ruth did not walk out on him. I worked very hard to try to understand, through as many confidential sources as I could, why she didn’t go. And I asked Madoff himself why she stayed. That’s the one point in the first interview where he broke down and cried. And I do think it was genuine. He didn’t even have a Kleenex with him. His lawyer had to find some little paper napkins in the snack bar area. But he said all her friends told her she should leave, which I knew to be true. He told her she should leave, that she didn’t have to stay. As the firestorm of criticism and vitriol was growing, he could see that it was hurting her to stay with him. But she would not walk out on him. And, as I understand it, how she has explained it, is that she had a love affair with this man for 50 years and she just felt she couldn’t abandon him at this time of his near destruction.Let's follow that up with the reason integrity is so important, and why - in a world filled with so many lacking in it - there's so much fraud:
You know Larry and I have been married for 42 years and I can sort of understand it. I don’t think younger couples can. She met and fell in love with Bernie when she was 13 years old. He was a lifeguard, she wasn’t even in high school yet. Pretty girl. And he was handsome, sun-bleached hair. She fell in love the first time she met him and married him at 18. You have to keep that in mind when you weigh the decisions she made after his arrest. It was a lifelong love affair. Everybody who knew them agreed that they were still like sweethearts. One person said that the only person who thought more of Bernie than Ruth was Bernie. She really worshipped him.
I can guarantee you that there is another Ponzi scheme out there that we haven’t heard about yet. Ponzi schemes are, to me, one of the most fascinating crimes on Wall Street, one of the most fascinating financial crimes that there is.Got that, people? Protect yourself. Protect your loved ones. Forget trying to seem nice:
The air they breathe is trust. A Ponzi scheme cannot grow in an environment that’s devoid of trust. Nothing else can either, so in order to eliminate Ponzi schemes, you’d have to create a world completely devoid of trust. And when you’ve got a world like that, number one, none of us wants to live in it. And, number two: You can’t run a modern economy without a minimal level of trust. But that level of trust is exactly the level of trust a Ponzi schemer needs to get away with it. Now, Ponzi schemes are a peculiar crime in that you don’t feel any pain until the very end.
I think the Madoff story introduces a new species of Ponzi scheme. Traditionally, we’ve thought of Ponzi schemes as the classic, too-good-to-be-true fraud. Fifty percent returns a month. Double your money in 10 days. The classic Ponzi scheme, all the way back to the first one in the 1920s, appealed to our greed. The get-rich-quick itch. The Madoff scheme did not appeal to people’s greed; it appealed to their fear. Through most of the Madoff scam, you could’ve made more money somewhere else. There were years when the Magellan Fund at Fidelity was producing much better results that Madoff’s investors were getting. It wasn’t that they were greedy: He was so consistent. He was so safe. They felt safe with Bernie in an increasingly volatile, scary, complicated market. If a Ponzi scheme appeals to your greed, a Madoff scheme appeals to your fears. I can’t tell you how many people told me, “He made me feel safe.”
Those are the kinds of frauds I worry we’re going to see more of.
Tell the truth.
And finally, here's a quote that captures how I see others looking at the world, not considering the real consequences of their actions, as they look out for their own desires in affairs, or money-making schemes, or any number of other endeavors:
[Bernie Madoff doesn't think about his clients] who committed suicide and their families. Not the ones who’ve had to uproot their entire lives and sell their beloved homes. The human cost of the crime is part of the equation that he just doesn’t see. He’s utterly in denial about that.I think about all of that - every day - which makes me weird to others, but also makes them very weird to me. People innocently defend evil nowadays, and it's costs are something they never consider until too late. And usually to someone else's detriment.
Self-deception is an extremely dangerous practice. Lying to ourselves is how we get in the most trouble. If there is a lesson, it is the oldest human lesson. To thine own self be true.
If people take nothing else away from the book, I hope they take that. Lying to yourself is a luxury that you just can’t afford.
Don't be the one.