The Banality of Bernie

Unsurprisingly perhaps, the Bernie Madoff saga plays longer and better in New York than anywhere else in the world. The sleek New York-based monthly, Vanity Fair, has devoted three months now to an ongoing series it calls “The Madoff Chronicles.” And in June it published its biggest scoop of to date: the personal story of Madoff’s longtime secretary (she was hired in 1984), Eleanor Squillari.

The article begins with a jolt, even before it moves into Squillari’s own story. “In writing about Bernard Madoff for Vanity Fair’s April issue, I frequently heard his victims refer to him as another Hitler, who decimated his largely Jewish clientele by stealing their money in the biggest Ponzi scheme in history.”

Madoff and Hitler. Seven billion dollars and six million souls. It just doesn’t add up. In fact, it’s a shocking claim. Yet the connection has a seductive appeal, and once you’ve heard it you can’t stop thinking about it.

The parallels are subtle, but intriguing. Hitler’s secretary from 1942 to 1945, Traudl Junge, claimed never to have heard her boss mention Jews or Holocaust. Not once. Squiallari, who served Madoff with personal distinction for over twenty-five years (at an eventual annual salary of $100,000), claims to have had no knowledge of what was going on two floors below her, on the storied 17th floor.

Madoff’s wealthiest and mist notable victims of fraud are Jewish, and noteworthy for their activism in Holocaust commemoration—people like Elie Weisel and Steven Spielberg.

Madoff also allied himself at crucial junctures with Italians, like Squillari, who later turned on him and made his life more difficult, not having the stomach for his extremities. And yet the two directors of the 17th floor were Frank Pascali and Annette Bongiorno, both from Queens.

The Greeks were never fooled—not by Mussolini, not by Hitler, and not by Bernie Madoff. Harry Markopoulos at the SEC had been warning investors for fully eight years that Madoff’s venture was a scam (admittedly, the annual audits by SEC failed to prove his contentions).

And an endlessly fascinating series of “what ifs” suggest that Madoff, like Hitler, could have succeeded but for the strange mingling of ill judgment and ill fortune. The reckless decision to invade Russia. Madoff’s lavish and even reckless spending in 2006 and 2007. The long Stalingrad winter. The economic downturn of 2008.

Squillari’s conclusion is very clear: but for the skittishness of his biggest investors, many of whom demanded big-time cash redemptions in late 2008 totalling some $7 billion, Bernie Madoff could have lived the lie to the end.

It gives one pause.

But if there is a connection really to be made between Hitler’s statist machine and Bernard L. Madoff Investment Securities they lie elsewhere, in a few suggestive details. Let’s start with the addresss. Bernie Madoff and his brother occupied three floors of some very prime real estate: the 34-story “Lipstick Building” on Third Avenue. Squillari’s descriptions of the place read like early descriptions of Hitler’s Berlin Chancellory, where work, fantasy and unimaginable destruction all had a home.

These were homes to massive bureaucracies, micro-managed by men with photographic memories who could describe, on the phone at long distance, where a file was located, and what page in that file needed scanning. There was obsessive record-keeping, coupled with a mastery of spin. (Squillari suggests that Madoff planted several pieces of evidence in his office in order to be arrested on his own timetable and on his own terms).

The most haunting line in the article is a description of the state of this office on December 12, 2008, the day after Madoff’s arrest: “It was filled with investigators, whose first act was to cut the wires to the paper shredders.”

Madoff was a man for whom appearances mattered greatly — the way you dressed, the way you talked, the way you looked. His offices reflected this. They were state of the art, enclosed in panoptic glass, sophisticated in their wiring, despite Madoff’s protests of computer illiteracy and lack of knowledge about the new technologies. Clearly he did; he had a computer at home, too.

And he knew the dangers as well as the advantages of the computer. The 17th floor looked nothing like the two floors above it. They were technologically primitive, and they were not subject to Bernie’s oversight. In a word, there was no paper trail on the 17th floor.

If there is a connection to be made to Hitler or to the Final Solution, then here it is. Bureaucracies make the establishment of responsibility very difficult indeed. Bureaucracies make it very easy to hide—to hide things, to hide funds, to hide large programs, even to hide the destruction itself. It is what makes telling the story of what happened so difficult, and it is what lends such a bland aura to an essay I had expected to be riveting.

As Hananh Arendt famously concluded a half century ago: evil is not riveting; it is banal. And therein lies its terror.