Ever since the Madoff fraud broke in the news I have been having a nagging “can’t quite place it” feeling that only became clear after reading this series, called The Bag Lady Papers, written by successful author and no-so-successful Madoff investor Alexandra Penney.
Indeed, he did. More than a decade ago, when I was in my late 40s, I handed over my life savings to Madoff’s firm. It was money I’d been tucking away since I was 16 years old, when I began working summers in Lord & Taylor, earning about $65 a week. Not a penny was inherited. Not one cent was from my divorce. I earned all of it myself, through a long string of jobs that included working as a cashier at Rosedale fish market in New York City in my 20s, and later, writing bestselling sex books.
The media coverage on Madoff is more curiosity than outrage, and the images of him with that quirky smile only serve to reinforce a paternalistic facade, at least more so than a master criminal mind. There are no TV images of bilked investors or people crying over their worthless retirement account statements. In short, the media portrays these financial fraud victims with a lot less empathy than Enron or Worldcom investors because Madoff’s investors are “them” while Enron’s were “us”.
First let’s put this into perspective, Madoff’s fraud is repeatedly reported as “$50 billion” even though the base number is probably 10-20% of that. In other words, much of the fraud concerns fictional investment returns instead of actual cash. At any rate, let’s go with the $50 billion number…. Enron was once worth $50 billion. Worldcom’s collapse resulted in, if memory serves me correctly, $36 billion.
Back to The Bag Lady Papers because it was reading this series that led me to a conclusion that explains why there isn’t broad-based moral outrage gripping our society. Madoff’s investors were not Budweiser (btw, Bud American Ale is a good tasty beer) swilling Joes standing on the front porch of their trailer in a Hooters tee-shirt, they are wealthy and very wealthy investors not taken in by some carpetbagger who rode into town and smooth talked them into buying Pet Rock 2.0, these are wealthy investors who were essentially taken by one of their own.
It’s really quite a shame that there isn’t broader interest in this story because the ripples are spreading. I was on a conference call for the non profit board I am on and we talked about the Madoff fraud (I’m tempted to write scandal, but let’s call a spade a spade, it’s criminal fraud) and we agreed that canvassing our major donors to determine Madoff collateral damage would be prudent. Non-profits are already coming to grips with a very tough economic environment for raising money in, and now there is Madoff hanging over these organizations.