Saturday, December 18, 2010

Mark Madoff, R. I. P.

I do not know and will not speculate on whether Mark Madoff participated directly in his father’s infamous Ponzi scheme.

Regardless of whether Mark Madoff had worked on the scheme, he profited from it, and thus his wealth was subject to confiscation.

We know that Mark Madoff’s name was so thoroughly tarnished that he despaired of ever returning to good repute. Link here.

Mark Madoff‘s suicide shows a good name going bad. From having been proud of the name Madoff, Mark suffered the unbearable anguish of having his name become a stigma.

Mark Madoff killed himself because he could not live with the shame. He must also have calculated that with him gone, his wife and children could change their names and escape the family curse.

French sociologist Emile Durkheim speculated that there were four different kinds of suicide: egotistic, altruistic, anomic and fatalistic. Mark Madoff‘s seems to have been altruistic: he killed himself to save his family.

Even if Mark Madoff was not directly responsibility for his father’s massive fraud, still, for having worked in his father’s company and for bearing his name he was shunned from society.

Mark Madoff seems to have suffered because his father failed to understand the difference between shame and guilt.

I speculate that Bernard Madoff imagined that he was fulfilling his role as protector and provider. He was providing richly for his family and would protect them by refusing to implicate anyone else in his crimes. It must have felt like a moral act. It was his largest miscalculation.

He would take the fall and live out his days in prison. With him out of the way his family would be able to move on with their lives.

The guilt would be his and his alone. As it happens, guilt is not transferable. If you steal a goose you and you alone are punished. Your family does not bear any criminal culpability for your misdeed.

This is why guilt is a weak social sanction. A man like Bernard Madoff can imagine that he can pay for his crimes while still protecting his family.

Shame is the stronger sanction because it does not just affect the person; it affects the name. Shame is shared because reputation is held in common.

In some ways it feels unjust to punish, by shaming, people who were not even accomplices. Yet, for being affiliated with Madoff, and for having enjoyed the benefits that accrued to him from that affiliation, his family has also been subject to the most severe social opprobrium.

Shame is the more effective sanction. If you fear guilt, you also know that you can pay off your debt to society, with time, or even with your life. Guilt can become part of the cost of doing business.

If you fear shame, you know that your own punishment will pale in comparison to the pain experienced by your family. Your pride in protecting your family will end up being a delusion.

Thus, shame is the ultimate deterrent.

Reports from his prison suggest that Bernard Madoff was so anguished at his son’s death that he withdrew from all interactions with others. Could his son’s suicide have been the moment where he fully grasped what he had done, not just to himself, but to those he loved?

Did he see at that point that his plan had failed, not just because he had been caught-- surely, he knew that he would be caught at some time or other-- but because his ignominy has also been visited on his family, to the point where his eldest son no longer wanted to live with the Madoff name?

Mark Madoff found one way to save his own wife and children. He hung himself with a dog leash.


Eric Gagnon said...

A great post. But could it be that Mark Madoff's problem might have been as much one of ego than shame? There were two things Mark Madoff could have done instead of ending his life. If complicit, he could have admitted to wrongdoing, and paid the price. If he was not involved in his father scheme, then he could have changed his name, moved out of town with his family and gotten on with his life--no harm, no foul so to speak. Now his wife is without a husband and child is without a father. I once heard that suicide can be defined as the ego's way of killing the ego. In addition to shame, it might also be that Madoff lost perspective and let his ego take hold of him; maybe if he could have "gotten outside of" his ego in an objective way he might have been able to see these two alternative paths more clearly.

Dennis said...

As I understand it, and this may be incorrect, Mark Madoff was the one who turned his father in once he was appraised of the situation. He had ceased to have any communications with his parents especially his mother.
It could very well be that the attack of the Left on anyone named Madoff no matter their culpability created a sense of depression one might get after doing what one thought was right and then being condemned for it by everyone. Further, as I understand that his wife has filed to legally change her name.
As I say I am not totally up to speed on this so I may be mistaken. Given the vagaries and out right dissembling by the MSM it is hard to know where the truth lies.

Stuart Schneiderman said...

Thanks, Eric and Dennis, for your thoughtful comments.

Yes, Mark Madoff did turn his father in, after his father confessed to him. I think that Mark was doing everything in his power to distance himself from his father's crime, but he seems to have concluded that he would never succeed.

He was not talking to his mother or his father... but that does not in itself change his name or his face.

We should keep in mind that the people Madoff defrauded were his social circle, his community. When you have destroyed the lives of the people who made up your social circle, you really do not have too many other places to go.

And while Mark Madoff might not have had a hand in the Ponzi scheme, how many people will want to take the risk of doing business with him.

If he had changed his name and moved away, someone would have found him and published the new name and location.

Once he is dead, when his wife changes her name, no one will have much of a reason to track her down.

As best as I can tell the opprobrium heaped on Madoff was not divided along left/right lines. No one on the right or left is defending Madoff.

And while most people feel some level of sympathy for Mark Madoff, whatever his complicity, they were apparently not going to include him in social functions or do business with him.

Jim said...

Mark was facing the possibility of criminal indictments and civil suits from the US and the UK indicating that he was more involved than most believe. The same would be for his mother and brother. Bernie did all he could do to provide cover for his family in the form of "plausible deniability". As a corporate CFO, I find it difficult to believe that both sons, educated men with law degrees, who were made officers of a segment of the business that was subsidized by the crooked part. Neither brother suspected the source of their fabulous and obscenely extravagant lifestyles - yeah right!! They never wondered why their beloved father never allowed them on the list of special insiders who were the only ones to enter the famous 17th floor of their office complex. The surviving brother stands a good chance of getting jail time, unless Bernie worked out a deal. I know many subscribe to the "lone wolf" theory but the facts say otherwise. The strongest evidence to date is the recent recovery of over $7 billion from the estate of an owner of a feeder fund that benefited from Bernie's scheme. The culprit mysteriously died in an accident last year. The trustee working for the victims claims that he may recover over 50% of the losses. Bernie was the highly shrewd ringleader, but he didn't do all this by himself and he wasn't the only beneficiary. Nearly all big frauds involve a web of people with most of the culprits/beneficiaries being low level participants who find it very easy to look the other way. It takes unusual courage to become a wistleblower.

By The Sword said...

Maybe it only looks like a "suicide"?

Madoff made a lot of rich enemies and surely some of them could afford to hire a skilled assassin. Killing a guy's son would be the cruelest sort of revenge.