Political Cortex: Brain Food for the Body Politic

"The penalty sparked a burst of applause in a courtroom packed with victims of the fraud.

"Earlier, nine of those victims confronted Mr. Madoff in court, calling him a 'monster' and a `low life.'

"'I hope this sentence is long enough so his jail cell will be his coffin,' said Michael Schwartz, 33 years old, of New Jersey, who said his family's funds with Madoff had been for the care of his mentally disabled brother.

"U.S. District Judge Denny Chin noted that more than 100 victims had written letters to him, citing one from a widow who said she went to see Mr. Madoff two weeks after the death of her husband, who had invested their life savings with him.

"Mr. Madoff put his arm around the widow and said, 'Your money is safe with me,' according to the letter Judge Chin cited."

For such a massive Ponzi scheme, a $65 billion fraud operation, it stands to reason that Mr. Madoff could never have pulled it off alone.  But Bernard isn't naming names of his partners in this colossal fraud operation.

His business partners may have been at his trial, but they of course would not identify themselves, for the hate directed at Madoff by his victims was evident.

A New York Times June 27 column by Joe Nocera pointed out that apparently the Securities and Exchange Commission made some monumental mistakes regarding Madoff.  The headline over Nocera's expose article said it all:  CHASING SMALL FRY, SEC LET MADOFF GET AWAY.

Nocera's article in his "Talking Business" column explained:

"Three months ago, in a courtroom in Bridgeport, Conn., a 72-year-old former Morgan Stanley broker, Richard A. Kawak, was cleared of any involvement in a small-time stock manipulation charge.

"The Boston office of the Securities and Exchange Commission began the investigation around 2001.  Three years later, formal charges were brought against Mr. Kwak and seven others.  By the time the case went to trial in 2007, only three defendants were left.  The others had settled with the SEC.

"In this 2007 trial, Mr. Kwak and another defendant, Stephen J. Wilson, were cleared of one charge, with a hung jury on the remaining charges.  (The third defendant, who foolishly acted as his own lawyer, was found liable and fined $10,000.)

"Mr. Kwak's life is in tatters.  He is around $1 million in debt and suffers from emotional problems.  He has struggled to stay out of bankruptcy.  Although he is still a broker, he cannot afford to retire.  He long ago lost his job with Morgan Stanley, where he had served several decades, without as much as a hint of impropriety.

"'It pretty well wiped me out,' he said a few days ago.  He was extremely bitter.  The same is true of Mr. Wilson, who is also deep in debt and struggling to reclaim his life."

Joe Nocera concluded with why he brought up this subject matter at this point in time:

"I bring all this up because this Monday, Bernard L. Madoff, a contender for the title of greatest financial criminal in history, will be sentenced for the Ponzi scheme he ran for years.  Mr. Madoff ruined lives, destroyed philanthropies and cost his investors billions of dollars -- yet the Securities and Exchange Commission was nowhere to be found, despite the repeated entreaties of a whistle blower, Harry Markopolos."

The people missing at Bernard Madoff's trial were Securities and Exchange Commission investigators, who repeatedly refused to conduct a thorough investigation despite the entreaties of Harry Markopolos.

Joe Nocera explains the general public reaction to this shocking delinquency in not investigating Bernard Madoff after repeated requests to check him out:

"After Mr. Madoff's crimes were exposed, there was an outcry over the failure of the SEC to uncover the Madoff scandal.  What in the world was it doing all this time?"