Motivations behind some choices seem so impenetrable that even squinting close enough to crash into the subject you wonât find a mental foothold. Thatâs how I felt about Bernie Madoff and everything connected to his Ponzi scheme. How did he do it? Did his family really not know? How did he fool so many wise-in-the-ways-of-the-world investors?
Lives built on lies fascinate me. What story do people tell themselves? Do they feel justified, begin believing their own lies, and imagine theyâre deserving of other peopleâs moneyâor do they envision that someday theyâll put it all right with none the wiser? Did Madoff think, like the guys from Enron and so many others, that he was always the smartest guy in the room?
Working with criminals, as I did for ten years, I knew their ability to fall into all the above. The thing about lying? Itâs such an easy slideâor at least it seems so when that someone buys your deceit.
Madoffâs wife? I always believed (arguing with friends) in the possibility of Ruth Madoff being in the dark. Hellâtitans of industry were fooled by him, why not his wife? My fascination extended to planning (long range) a novel based on a wife blindsided by her husbandâs crime. What could that be like, having the entire fabric of oneâs life ripped away by the man youâve devoted yourself to since the age of 13? How do you make sense of life once you learn your life was built on sand? Does it make the love as false as your checkbook?
The Wizard of Lies: Bernie Madoff and the Death of Trust by Diana B. Henriques gripped me as tightly as any thrillerâtighter perhaps, because instead of the âwhat happens,â I learned âhow the hell it happened.â This man fooled almost everyone, including those in the SEC who investigated him (based on suspicions that were not followed through.) Descriptions of how he and his side-kicksâno, he did not do it aloneârigged up a phony computer show of trades and accounts astonished me same as any episode of âHomeland.â
Corporate leaders, CEOs, CFOâs, fund managers, titans of industry, none of them questioned the impossible returns brought to them by Madoff. The steady returns were unbelievableâyet only a few skeptical souls paid attention to if it seems too good to be true, it probably isnât.
It wasnât true. It wasnât good.
The Wizard of Lies provided an education in the murky world of finance(that usually makes me fuzzy-brained) and imparted the facts in electrifying prose. Lessons in greed applied not just to the pocketbook, but to the soul of the players, providing a heartbreaking and enraging portrait of the disasters caused by Madoffâwhose family and victims tumbled from golden peaks to suicide, loss, and near-madness.
Author Henriquesâ conclusions will stay with me forever. The lines below,which come close to the final paragraphs of her book, could serve as warning to all of us whoâve stepped over, or been tempted to step over the line. We believe, weâre desperate to believe, that Madoff is a far away âthemâ and not a âus,âbut Henriques words serve as warning against the dangers of that hubris:
Madoff was not inhumanly monstrous. He was monstrously human. He was greedy for money and praise, arrogantly sure of his own capacity to pull it off, smugly dismissive of skepticsâjust like anyone who mortgaged the house to invest in tech stocks, or tapped the off-limits college fund to gamble on a new business, or put all the retirement savings into a hedge fund they didnât understand, or cheated a little on the tax return or the expense account or the spouse.
Just like usâonly more so.
Henriquesâ book unfolds a world of a billion dollar Ponzi scheme that at its core is no different than a ten-dollar offense:both depend on a suspension of disbelief to which anyone can succumbâthe belief that the laws of the universe can be ignored when you want something enough.
This isnât a book youâll speed through, but it is a book that will fascinate and shed light on the hidden worlds operating in too many shiny corporate buildings around the world. Windows will open. Thank God. Because none of us can afford ignorance of that domain, nor the masters of that universe.
(originally published at Great New Books)