Madoff wasn't acting alone

Dishonest business people must be ousted rather than be legitimized due to their wealth

Rabbi Levi Brackman|Published: 12.26.08 , 14:10

What is so shocking about Bernie Madoff is not that he is a gonif, there will always be thieves and crooks and we have all met our fair share of them. That he was able to crook people for so long without them realizing it is what I find most outrageous.

Since 1999 there were a number of people who looked into Madoff’s operations and came away with serious suspicions of impropriety. In 2005 independent financial fraud investigator Harry Markopolos sent a long memo about Madoff’s fund to the SEC. The title of the memo was: The World's Largest Hedge Fund is a Fraud. But how was he able to maintain a veneer of respectability and trust when he was under such serious and credible suspicions?

The most obvious answer is that we as humans are fooled by the allure of money. We equate net-worth with self-worth. In truth the two are completely unrelated. But for many, wealth equals power and importance. If you have never observed this before, next time you are at a fundraising dinner watch the table where the wealthiest people are seated, you will notice a constant stream of people walking over to talk to those sitting at that table. Why it is that they get a disproportionate amount of attention?

A few years ago I was visited by a man who used to be a very wealthy but had lost all of his money in a Ponzi scheme. He was devastated and depressed. At one point he was donating more than a million dollars a year to causes in Israel and now he was virtually penniless. The thing that hurt him most, however, was the fact that together with the loss of his money he lost all of his friends. The wealthy people he used to associate with were no longer interested in him because he was no longer rich.

'Who cares where the money is coming from?'

Whilst in Judaism wealthy people are looked upon as deserving of respect this is because the wealth is seen as a mark of an accomplished person. In other words the wealthy individual should be respected for the success, accomplishment and attainment that brought the wealth rather than for the wealth itself. And, if it is real, personal success and achievement is something that a person cannot lose. Unfortunately the allure of money was blinding to too many people in this case as well.

However, there is another more ominous reason that people overlooked the suspicions that hung over Madoff. Often suspicions of financial dishonesty are not taken seriously enough. Frequently questions are answered by the words, “but everyone is doing it.”

In addition, many people are not concerned whether their investments make money in an ethical manner. People are happy to invest in companies that have questionable practices. As long as they are getting a piece of the pie they don’t worry it. For many investing with Madoff meant consistent double digit returns. If he had to steal in order to achieve that they did not want to know about it nor did they care.

Dishonesty must become taboo

It now clear to all that we must completely stigmatize any type of unethical financial behavior. White Collar crime must be taken as seriously as any other. A person against whom there are credible suspicions of financial impropriety should be removed from communal positions no matter how wealthy they are or how much they donate each year.

Dishonest business people must be taboo in our communities. People must know that if they cheat in business there will be real social and communal repercussions. We cannot brush this under the rug any longer.

Unfortunately there are Jewish communities that have people who have been convicted of financial fraud as their presidents and Israel currently has a prime minister who is under serious suspicion of financial irregularities and the previous Israeli prime minster served under similar suspicions. This must stop. As long as we allow people who perpetrate this type of behavior, or are suspected of it, a veneer of respectability within our communities when something like the Madoff scandal occurs we are all collectively culpable.