article

03.02.09

Was Madoff About to Get Whacked?

These days, we're all as mad as Elie Wiesel is at Madoff. Can the president keep populism in check?

"I would simply call him thief, scoundrel, criminal.”

Now tell us what you really think.

Elie Wiesel’s much-quoted refusal to say he’d forgive Bernie Madoff for stealing every cent of the foundation he’s made his life’s work was the most memorable utterance at a panel at Manhattan’s 21 Club, hosted by Portfolio magazine last week.

It was a great moment of breakfast theater. For one anxious moment, the assembled crowd of croissant eaters feared the celebrated Holocaust survivor Wiesel was going to rise above the blow Madoff had struck him. But that’s not the mood anymore, for Wiesel or for any of us. Gratifyingly, Wiesel told us he would like Madoff to be obliged to live out the rest of his days in a solitary cell, forced to watch the images of all the suffering widows and orphans deprived of help.

Have I seen too many Sopranos episodes or is it possible that smiling, avuncular, soothing Bernie was a crime syndicate’s Jewish capo who only gave himself up because when the economy collapsed he feared it’d be his turn to get whacked?

A popular—and perhaps too charitable—theory about Madoff’s motives is that he only went bad after a series of mistakes that brought him to the edge of ruin. Unwilling to lose face, he embarked on an escalating Ponzi scheme. My own theory is more cinematic. In this version, the customer for whom Madoff made the wrong buys 30 years ago turns out to be a Mafia chieftain who told him, “From now on, Bernie, you’re ours.” After all, as former SEC chairman Harvey Pitt acknowledged on the same Portfolio panel, “it takes a village” to amass a fraud as dizzyingly complex, convincingly documented, and internationally networked as Madoff Inc. Have I seen too many Sopranos re-runs or is it possible that smiling, avuncular, soothing Bernie was a crime syndicate’s Jewish capo who only gave himself up because when the economy collapsed he feared it’d be his turn to get whacked? Calling Martin Scorsese! Either theory is easier to take than the notion that he was always a corrupted soul, his subtly smiling face disintegrating somewhere in a Dorian Gray portrait. As Wiesel chillingly observed, “When you enter evil it is not static. You go deeper in.”

Madoff, of course, is just a grotesque distraction from our desperate national predicament, a criminal whose fascination for us is amplified by the age of global greed that has brought so many innocent people down in a diabolical domino effect. The trouble is that the vengeful climate right now is giving another twist to the downward spiral of the economy. It’s not restricted to justified targets like Madoff and the banksters but at any corporation or individual who appears to display a whiff of spending power. Even a lousy sales meeting in a Radisson hotel is liable to be denounced by some grandstanding congressman as a Sodom and Gomorrah bacchanalia that will get the CEO fired. The cancellation of these events is proving yet another financial blow to hoteliers, caterers, waitstaff, car services, parking valets, coat-check girls, and florists—not to mention the authors, academics, and motivational speakers who are used to supplementing their frayed literary earnings with after-dinner gigs at mid-market corporate boondoggles.

The question for Obama is how he can rein in the furies of populism while making us all feel the malefactors of great wealth are being sufficiently punished. Thus far the president’s speeches have been stern when he alludes to the perpetrators: "This time, CEOs won't be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over.” The trouble is that as the full depth of this recession sinks in, we’re getting more morose and paranoid. Every money manager could be Madoff. Every bank could still go bust. Wiesel suggested that instead of bailing out banks the government should bail out all the nonprofits ruined by the charlatans.

It’s a satisfying thought. But instead, the new budget presented in Obama’s name goes in the other direction, subsidizing health care by cutting back the tax deductions for gifts to charities from those in the 35 percent bracket—diverting $318 billion to the state (over ten years) from a myriad of charities. More collateral pain.

No wonder the mood is getting so ugly. It’s not just a stimulus package people want, it’s reparations. But as we discover every day, the architects of the misery are too numerous to punish. The ethical collapse was a vast capitalist conspiracy. And we’re all capitalists now. At least we used to be.

EXTRA INSIGHT: Philanthropic Capitalism: How the Rich Can Save the World by Matthew Bishop and Michael Green. Bloomsbury Press.

Tina Brown is the founder and editor-in-chief of The Daily Beast. She is the author of the 2007 New York Times bestseller The Diana Chronicles. Brown is the former editor of Tatler, Vanity Fair, The New Yorker, and Talk magazines and host of CNBC's Topic A with Tina Brown.