The Other Bernie

In the movies, and in most other narrative art forms, once the bad guy is convicted and sent to jail that’s usually the end of the story. Occasionally there will be a follow-up or a coda that talks about the character’s experiences in prison, but for the most part there isn’t a lot to say about sitting in a small room with bars on the windows for fifty years without the possibility of parole. But sometimes the conviction and jail sentence is the beginning of the story, or more correctly the end of one story and the start of a new adventure. As such, I really wasn’t all that surprised to find our old friend Bernie Madoff back in the news…

You can take a look at the Quartz Media page if you want to, but it’s a fairly simple tale. Apparently, while in Federal prison in North Carolina (at Butner Prison, one of the infamous “Club Fed” facilities), Madoff managed to buy up all of the instant hot coca packages available in the commissary and started reselling them at a profit in the prison yard. According to this report, things have gotten to the point where if you want to purchase any of the stuff you have to “go through Bernie”. Since he’s already considered a prison-house celebrity – other prisoners come to him for financial advice and stock market tips – no one seems to mind, and given some of the things that a criminal mastermind can get up to while in prison, I doubt the prison officials are worried about it, either. What struck me as funny was that this actually makes the previous Madoff story somewhat more credible…

Back in 2011 I brought you the story about Madoff claiming to be working with Harvard Business School to develop content for a new course offering in investments – and how to detect fraudulent ones, I would assume. You can look up my original post here, if you want to, but at the time I used this as an example of not believing everything you read on the Internet, a topic which has now become all too common on business blogs and related sources. But if this story is true – and so far it appears to check out – then it would appear that Madoff has, once again, proven himself to be sharper and more ruthless than the majority of the people living in his environment, which suggests that he really might have some lessons worth listening to. What struck me as most unfortunate was that he didn’t figure all of this out ten or twenty years earlier…

You see, none of the activities described in the Quartz article are illegal, or even against prison regulations, apparently. Yet, despite the obvious handicaps of operating inside a Federal prison with limited funds while surrounded by thieves, fraudsters, and con artists, he still managed to pull off a financial (commodities trading) coup like this one. That, combined with some of his earlier success before he turned to running a Ponzi scheme, makes me wonder what Madoff might have accomplished if he’d actually stayed on the straight and narrow. Granted, it probably wouldn’t have been anything as lucrative as stealing $50 billion, but it probably wouldn’t have involved a 50-year prison sentence, either…

Please understand me when I say that I’m not trying to excuse any of Madoff’s behavior; quite the contrary. I consider this story to be the final evidence, if any was actually needed, that Bernie could have achieved almost any conceivable level of success without ever committing a crime, which leaves arrogance and narcissism as the only possible motivations for his offenses. And while it doesn’t seem likely that anyone will risk letting him loose on the public again, particularly in light of his most recent activities, I would still advise my readers (assuming I have readers) not to bet against hearing from Bernie Madoff again in the future…