05.07.09 6:00 AM ET
The Bag Lady Papers, Part VII
Madoff victim Alexandra Penney, who lost her life savings in the ponzi scheme, on Bernie's dirty fantasies, living the frugal life, and some post-Ponzi
schadenfreude—like seeing Ruthie's roots. Here’s the latest entry of her
ongoing blog for The Daily Beast.
Bernie Madoff’s longtime secretary blabbed big time on Good Morning America yesterday morning. Innocent little Ruthie may have a few issues with Bernie’s nefarious massages and dirty fantasies, but she is still flouncing around with the many millions she withdrew just days before the MF confessed. She still has the colossal cojones to say all that dough is what she personally earned. Hah! Will somebody please tell me when the feds are gonna close in on her?
Much has happened since the loathsome caviar-coddled MF was caged and forced to wear an adorable orange prison costume.
Bag lady fears and visions haunt me at my usual 4 o’clock waking hour, when the world is a monotone gray and bleak, and I am stone-cold terrified of what will become of me. I compulsively add up every dollar I could make from selling everything I have. But occasionally a new fantasy surges through my beleaguered brain, and it helps to declaw the demons.
I am in a shadowy, but elegant, opium den straight out of Colette. I’m lying on a pale-blue silken chaise, taking long, languorous drags on a hookah, which numbs the angst and transports me far away from reality. Sadly, such a spot would be quite difficult to track down—and in any case, it wouldn’t comport with my new budget.
Last week, the bill for brakes on my dented white ’95 Mercedes wagon came to a whopping $671.41, which prompted me to write—again—to the trustee of the Madoff bankruptcy, Irving Picard, Esq., inquiring, as a personage in dire financial straits, when the Securities Investor Protection Corp. money would be distributed. Madoff investors are allegedly eligible for up to $500,000 in life-saving SIPC insurance. (Madoff claimed to be a member of SIPC, which means cash and securities held by the brokerage firm may be protected up to $500,000.) I’ve just finished the first draft of my book and am surviving thanks to the first installment of a book advance the publisher has paid me.
It’s the unforeseen bills like brakes for the wagon that can stop me in my tracks. I’m now quite adept at polishing my own nails, ironing my weekly supply of white shirts and Frette and Deborah Sharpe linens, and living a Most Frugal Life. The small amount of Madoff money I withdrew every quarter has, of course, disappeared. And the art market, which I depended on for the bulk of my income, has almost completely succumbed to rigor mortis, but luckily I’ve just sold a few photographs.
I was a big shopper in my day, but since the MF debacle the urge has, thank God, vanished. I confess to paying $16 for a perfect-fit Bill Blass pleated skirt that I spotted in a Palm Beach thrift shop. That’s been my one and only purchase since Dec. 11.
Florida, especially Palm Beach, was the prime feeding ground for the MF, and the stories I heard down there were appalling. I recently met one of West Palm Beach’s finest, a man more gorgeous than Denzel Washington and the possessor of a master’s degree in sociology. After a few minutes of chatting, the subject of distressed sales of homes across the bridge came up.
“That’s all part of this Madoff thing,” the gorgeous one said. “The guy is on everyone’s mind here. You wouldn’t believe the number of my friends, firemen and cops, whose pensions and retirement he robbed. I’m one of the lucky ones who wasn’t affected.”
Once again, I am stunned at how the lack of government oversight has damaged so many human beings throughout our society.
So many have troubles far worse than mine. Elderly people have been forced to sell their homes with no way to earn an income and no one to turn to. What are they going to do? Where’s the SIPC money? Their daily lives are hell. As of a few weeks ago, only 12 checks had been issued—and not one more has landed in needy hands. What the f—k is going on here?
Much has happened since the loathsome caviar-coddled MF was caged and forced to wear an adorable orange prison costume. A razor slash in the face was delivered to the 800 investors whose savings, like mine, were in Individual Retirement Accounts. Five years ago, in 2004, the IRS granted the MF the right to be a nonbank custodian of IRAs. A few weeks ago, the Infernal/Eternal/Internal Revenue Service ruled that those with IRAs cannot take tax losses to due fraud or theft. These tax losses are normally available to victims of fraud or theft but, to repeat, not to the people who saved their earnings in IRAs.
Now our IRAs aren’t even safe! This is beyond outrageous. Where was the due diligence the IRS is, by law, responsible for when it appointed Madoff a custodian? Since 1990, the IRS has collected hundreds of millions of dollars from Madoff customers. What the f—k is going on here?
On the plus side:
• Now we’ll know what innocent little Ruthie’s real roots look like, since her hairdresser has ousted her from his premises. Pierre Michel, you rock!
• Jake Zamansky, a high-profile New York lawyer, has initiated a billion-dollar class-action suit on behalf of the MF's investors who had IRAs. The suit is against Fiserv, Madoff’s hand-picked fiduciary/custodian for those IRAs. The suit also names TD Ameritrade, the company that bought Fiserv. Fred Tomczyk, 52, the new president and CEO of TD Ameritrade, reportedly made $13.5 million in 2008. The recently retired CEO, Joe Moglia, apparently took home a five-year compensation package of approximately $81.2 million. TD Ameritrade wrote me claiming it didn’t buy anything Madoff-related and stopped making trades years ago. Jeffrey Yabuki, 47, president and CEO of Fiserv, has made approximately $20 million since the end of 2005.
• JPMorgan Chase Manhattan has been sued by Howard Kleinhelder of Wachtel & Masyr on behalf of Madoff victims. Let’s say a person has deposited $65 billion into an account and also takes out $65 billion. Does anyone out there believe that 53-year-old Jamie Dimon, the bank’s chairman and CEO, whose take-home pay was reportedly $44.4 million a year, including $211,000 for his personal-jet use, wasn’t precisely aware of this fact? Just how much did he—and the bank—make on these unthinkably huge transactions? Good Lord, if someone tries to withdraw more than $10,000 from a bank account, the IRS must be notified.
• Andy Madoff was punched and shoved by an ex-employee of his father, according to Cityfile.com. I’d give him a super-whammo slug myself if I could. Ditto the MF’s dirty brother, Peter.
Even though bouts of heavy-duty panic still abound, I remain optimistic. President Obama promised change, and it’s really happening. Change brings with it innovative thinking and fresh ways of looking at the world and, for me, this is provocative and exciting. I often survey our post-meltdown period and see my life as a great new adventure.
By the way, here’s what the Madoff trustee, Mr. Picard, emailed me a week after my plea for SIPC funds. “The Trustee and his staff appreciate the sense of urgency that attaches to each individual’s customer claim. However, under the circumstances of this liquidation proceeding, neither the Trustee nor his staff is in a position to advise about the status of or the time frame for the determination of any particular claim.”
Upon receiving this, I faxed Barney Frank, the chairman of the House Financial Services Committee, about SIPC payments and the new IRS ruling. I also asked him to take a leadership position on this whole Madoff matter. No response.
Alexandra Penney is an artist, bestselling author, former editor-in-chief of Self Magazine, and originator, with Evelyn Lauder, of the Pink Ribbon for breast cancer awareness. She had a one-person show at Galerie in Berlin in April and her work was shown at Miami’s Art Basel. She lives in New York, has one treasured son in Los Angeles, and more amazing friends than could ever be imagined.