The prison warden’s assistant called me on my cell phone at breakfast on Thursday, February 10, 2011. It was a call I had been hoping to get for almost six months.
On August 24, 2010, I had become the first journalist to interview Bernard L. Madoff since he was arrested, in December 2008, for running the largest Ponzi scheme in history. He had pleaded guilty and was serving a 150-year sentence in the federal prison in Butner, N.C. I had flown to Butner the night before that August visit and checked into a cheap, slightly damp motel room. Too alert to sleep, I reviewed my questions for Madoff until well past midnight.
What do you ask the architect of the largest financial fraud in history? Throughout that summer, as I waited and hoped for permission to visit, I had asked almost everyone I knew what one question they would ask Bernie Madoff. In almost every case, I got the same answer: “Why did you do it?”
Oddly, that question was nowhere near the top of my own list. I strongly suspected, even then, that Madoff himself did not know the deep, true reason why he had committed his crime.
In my research, I had come to see a man who simply could not admit failure, especially to himself. “Bernie never had a losing day,” said one longtime stock market friend — recalling a quietly confident man who always had a cheerful response when other traders were bellyaching about a brutal day in the market. He had lived most of his life in a gilded atmosphere of admiration. His wife Ruth had worshipped him ever since she’d first met him when she was 13 and he was a sun-bronzed 16-year-old lifeguard. His two sons, who worked on his legitimate stock-trading desk, shone in his reflected achievements. Nothing I’d seen or knew of Madoff suggested a self-reflective man who would dig deeply for the causes of his own self-destructive actions.
So my own key questions for him were rooted in fact, not psychology: ”When did the fraud start?” And “Who else knew?” His answers to those questions might be lies – indeed, I believe they were – but at least the questions dealt with facts that he certainly knew. What man could forget the day he crossed over the line and committed his first criminal act? And what mastermind does not know his own accomplices — or cannot remember that awful moment when someone else discovers his crime in progress?
And yet, when we had met in a dimly-lit prison visiting room in August, Madoff had claimed to be that unknowing man.
He was smaller than he seemed on television – shorter, thinner, less regal. But he still had the aura, the quiet magnetism his longtime friends and defrauded investors remembered. His prison uniform was crisply pressed; his shoes were shiny. He seemed a bit bemused to be talking to me in this strange place, so far from the Wall Street world where I had first met him in the 1990s.
With a twinkle toward his lawyer, he joked mildly about how little lawyers and prosecutors knew about the stock market. He flattered me about my own market knowledge – that was his magic trick. He never acted as if he were the smartest, most charming person in the room. He acted as if you were the smartest, most charming person in the room. I learned a great deal in those moments about how seductive this man must have seemed to uncertain regulators and investors.
But he steadfastly dodged my insistent questions about the timing of his first criminal acts, claiming he could not recall the day he had first robbed Peter to pay Paul, the first step he had taken to construct a Ponzi scheme that would wipe out $65 billion in paper wealth. The fraud started sometime in 1992, he insisted. That was his story and he would not budge, despite my well-founded skepticism.
And who else knew? Well, maybe one financially sophisticated Palm Beach investor – Jeffry Picower, now dead — had suspected. Picower never said anything, Madoff said, but how could he not have suspected something? Madoff fingered no one else, not even Frank DiPascali, his right-hand conspirator in the fraud, who had pleaded guilty more than a year earlier.
I had requested a follow-up visit the moment I returned home from Butner. It was denied, although Madoff was allowed to exchange e-mails and letters with me through the fall. I tried again, as my book’s deadline neared. And on that Thursday morning in February, I learned my request had been approved. The visit was scheduled for the following Tuesday. I raced back to Butner.
I was stunned by the man who met me in the visiting room on February 15, 2011. It was just over two months since December 11, the second anniversary of his arrest — and the day his older son Mark had committed suicide, broken at last by the legacy of suspicion and shame his father had left him. Much thinner and rumpled, in a badly pressed uniform with a shirt button undone, Madoff reached out his hand to shake mine. There was no humorous flattery this time, only an intense determination to implicate the big banks that dealt with him through the years of his fraud and a fierce certainty that his victims would ultimately recover more than anyone expected.
Dollars and cents, placing the blame – those were the targets of his laser-like focus, despite his obvious grief. He later acknowledged weeping for days after hearing of Mark’s death. As our February visit ended, Madoff told me he was talking with a prison psychologist to try to figure out how he lived a life of lies for so long. “I always wanted to please people, that was a weakness that I had,” he said. “My counselor says people ‘compartmentalize.’ I never believed that I was stealing. I thought I was taking a business risk, like I did all the time. I thought it was a temporary situation.”
But the pain was piercingly permanent, for his own family and for all the other devastated families whose lives were torn apart by his fraud. I did not feel he had yet reached the point of fully comprehending the mountain of grief he had created – but as he walked out of the visiting room, I wondered if he was finally taking the first steps toward that knowledge.
Diana B. Henriques, a senior financial writer at The New York Times, is the author of the new book,“The Wizard of Lies: Bernie Madoff and the Death of Trust.” A Polk Award winner and Pulitzer Prize finalist, she has won several awards for her work on the Times’s coverage of the Madoff scandal and was part of the team recognized as a Pulitzer finalist for its coverage of the financial crisis of 2008.