Sociopaths on stage: Bernard Madoff

As recently as November 2008, Bernard L. Madoff Investment Securities was a Manhattan family brokerage known on Wall Street primarily for two things: the innovative software that, in the early 1990s, enabled the firm to make legitimate markets in hundreds of stocks in competition with the mighty New York Stock Exchange; and an investment advisory service that, for some 15 years, provided its clients with spectacular returns through good market cycles and bad.

(My own 1993 book, Revolution On Wall Street— written in collaboration with the Wharton professors Jeremy Siegel and Marshall Blume— praised Madoff for "seizing temporary opportunities unknown to large bureaucracies like the New York Stock Exchange.")

This reputation exploded in December 2008 when the firm's founder and chief executive, Bernard Madoff, admitted that his multi-billion-dollar hedge fund was actually a classic Ponzi scheme.

Disappointed critic

For at least 13 years, it turned out, Madoff's highly touted hedge fund had executed no trades at all. Instead, he took in money from investors and other feeder funds and used it to meet any withdrawals his investors requested. Given the human capacity for self-deception, the fictitious returns Madoff reported so impressed his investors that few of them questioned his methods. In this manner, more than 4,000 Madoff clients were fraudulently relieved of at least $18 billion.

Madoff, who is now 74, will probably spend the rest of his life in prison, but that punishment won't repair the damage he caused. At least two of his clients have killed themselves. On the second anniversary of Madoff's arrest, his younger son Mark hanged himself as well.

As BSR's Carol Rocamora points out, this sensational saga "is the stuff of which powerful dramas are made." Yet now that playwright Steven Levenson has adapted the Madoff story for the stage (as The Unavoidable Disappearance of Tom Durnin), Carol professes herself disappointed that the play's Madoff character seems to lack any redeeming qualities that would enable audiences to empathize with his downfall. (Read Carol's review here.)

Dramas about Hitler?

When Madoff's son killed himself, "I simply cannot imagine, as he heard the news in prison, that his heart didn't break," Carol reasons.

I can imagine it. The problem with Madoff, I suspect, is that he was and is a sociopath— and while sociopaths may make headlines, they make terrible tragic heroes.

That may explain why nobody writes dramas about, say, Hitler or Stalin or Pol Pot. Most of us can empathize with someone who falls from grace. But what can you feel about someone who's just plain manipulative from the get-go?

Anyone who perpetuates a massive fraud inevitably casts suspicion on his relatives and associates— especially relatives who work in his office, which was the case for Madoff's wife, brother, two sons and a niece.

Covering up

Madoff repeatedly claimed he acted alone. But obviously he didn't. Subsequent to his arrest, his younger brother Peter was sentenced to a ten-year term after pleading guilty to covering up the financial wrongdoing. In the process he left us to wonder who else in the Madoff family was involved.

Bernie Madoff could have removed this cloud of suspicion by cooperating with prosecutors. Instead he pleaded guilty in March 2009 to all 11 counts against him, accepting what is effectively a life sentence and refusing to inform against any other individuals. His closest relatives were left to twist slowly in the wind— literally, in the case of hsi son Mark.

Self-delusion

I claim no special entrée to Madoff's brain. But if you opened it up, I think you'd find a man of massive self-delusion who deceived not only his investors but his family and probably himself as well. Madoff destroyed not only his clients' fortunes but also his family's good name so thoroughly that neither can be recovered. He created a situation in which his presumably close-knit relatives were suddenly mired in subpoenas and forced to communicate with each other through their lawyers.

Madoff violated his family members as recklessly as he violated the faithful investors who trusted him. He exposed his family to embarrassment much the way Richard Nixon did during the Watergate scandal, when he dispatched his devoted daughter Julie Eisenhower across the country to vouch for his innocence even though he knew (as she did not) that the charges against him were true.

Nixon outsmarts Clinton

Nixon never made much of a tragic hero either, for much the same reason. As Steve Cohen noted in his review of Nixon in China, that opera contains mesmerizing melodies but little in the way of human drama and emotion. (Click here.)

That shouldn't surprise us. Whatever the dramatic arc of his political career, the inner Nixon barely changed throughout his life. At age 80, when most people have mellowed, Nixon was busy manipulating himself into the White House and the Kremlin. When President Clinton failed to respond to a Nixon letter angling for a White House invitation, Nixon passed word to the White House that he was writing an op-ed essay about Clinton's foreign policy. The White House phoned Nixon back within 24 hours, and Nixon's subsequent op-ed piece in the New York Times praised Clinton's "gutsy support" for Russia's president, Boris Yeltsin.

"'I live with that'

In a phone interview two months ago, Madoff told a reporter, "I was responsible for my son Mark's death and that's very, very difficult. I live with that. I live with the remorse, the pain I caused everybody, certainly my family, and the victims." (Click here.)

Of course, a sociopath would use such rhetoric to win our sympathy. As BSR's Victor Schermer observed in his review of Hannah Arendt, sociopaths are especially skilled at simulating normality when it serves their interest. (Click here.)

A true tragic hero would take some redeeming action. He needn't gouge his eyes out like Oedipus; a simple clean breast of things would suffice.

The Madoff saga begs a disturbing question: Even after half a century, can you ever know another person well enough to trust him completely— even your own flesh and blood? To be sure, that's a good question for prosecutors and therapists. But how far can a playwright take a story about life with the devil?♦


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