ABC’s ‘Madoff’ Exposes the Incompetence of the Federal Government

Madoff was a very well done, 4-hour television event. Telling the story of, obviously, Bernie Madoff and his $50 billion dollar Ponzi scheme, it had a very “Goodfellas” feel to it, complete with good use of flashbacks and music.

It also revealed the federal government to be completely and utterly inept at doing their job. In this scene Madoff is at his niece’s wedding, surrounded by S.E.C. agents and believing to a near certainty that the agents are there to arrest him after he basically gave them all the information they needed to nail him.

Then this happens:

Madoff: My own niece's wedding. This was the moment they'd chosen to take me down. Those smug, sniveling sec agents. Nothing better to do than to try to humiliate me. I was 13 years old when my dad's sporting-goods business went bankrupt. My dad's failure was humiliating. But it was the look on our neighbors' faces -- the look of pity -- that was unacceptable. And I made a vow to myself that day that nobody would ever look at me like that. I was gonna make more money than anyone in Laurelton could even imagine. They weren't just gonna respect me. They were gonna honor me. They were gonna admire me. Nobody would ever pity Bernie Madoff. How would my family look at me when the sec arrested me? Could I hold my head up high? Would I still be the magician? This was my worst nightmare coming true.

Green: Mr. Madoff? Mr. Madoff. Uh, David Green. SEC lawyer. So, how's life?

Madoff: How do you mean?

Green: Um, well, I think life's a pretty funny business.

Madoff: I'm gonna go get my wife. Unless you have something else to tell me.

Green: Actually, I do.

Madoff: And that is?

Green: Congratulations.

Madoff: On what?

Green: Oh, they didn't tell you yet? Cat's out of the bag now, I guess. Uh, they cleared you. You still have to register as an adviser, but that's it. It's over. Congratulations on your niece's wedding.

Madoff: One phone call. "Hello, DTC? What do you mean, there are no securities in the Madoff account?" That's all they had to do. A secretary could have done it! And the financial-enforcement arm of the Federal government of the greatest nation on Earth simply never made the call.

So, due to the S.E.C.’s unwillingness to make a phone call, Madoff was allowed to go on and continue to commit fraud on a heretofore-unforeseen scale. Nor was that the only opportunity the Feds had to nab Madoff. Also described in the show is the incredible lengths financial fraud investigator Harry Markopolos went to alert the S.E.C. that Madoff was a giant fraud, going to them at least 3 times to make the case between 2000 and 2005.

And of course, as the show depicts and as we all remember, his arrest did not come until Madoff’s sons turned their father in to the FBI. But how many lives, fortunes, and retirements could have been spared in the meantime if the federal government had just picked up a phone?

But hey, government-run healthcare should work out just fine.

Banking/Finance ABC Bernard Madoff

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