In the Name of Venality

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Venality = ready to sell influence or services or to sacrifice principles
from sordid motive

Geen verder commentaar nodig/gewenst

Groet / Cees

http://www.vanityfair.com/magazine/2009/06/graydon200906
In the Name of Venality
by Graydon Carter June 2009

It can fairly be said that the chain of catastrophic bets made over the
past decade by a few hundred bankers may well turn out to be the greatest
nonviolent crime against humanity in history. They’ve brought the world’s
economy to its knees, lost tens of millions of people their jobs and their
homes, and trashed the retirement plans of a generation, and they could
drive an estimated 200 million people worldwide into dire poverty. In
other words, never before have so few done so much to so many. And has
there been even one major, voluntary resignation by an American financial
executive? One sincere apology? One jail sentence? Why the American public
hasn’t taken to the streets in revolt is a mystery that can be linked only
to our inherent belief in the virtues of capitalism.

This underlying trust on the part of Americans that the free market will
lead us out of this darkness is being tested on a daily basis. While firms
and families large and small around the country struggle to obtain
financing or refinancing, and with the Fortune 500 companies’ earnings
down 85 percent on average (the worst performance in the ranking’s 55-year
history), the banks at the heart of the financial meltdown are beginning
to report profits again. Bank of America, which received $45 billion in
bailout money, reported $4.2 billion in first-quarter earnings. I’m
certainly no financial whiz—when the economy tanked last year, what money
I had was sitting in a checking-savings account—but who wouldn’t be able
to show a $4.2 billion profit after getting $45 billion in bailout money?
Especially when the banks can borrow money from the government at an
effective interest rate of zero and then lend it out to credit-card
holders at rates that in some cases approach 29.9 percent—usury rates that
were outlawed in most states until 1978.

Bankers are now thought of as Paris Hilton in pinstripes—showy,
thoughtless souvenirs of an age and a culture we wish to forget. Poor Bank
of America C.E.O. Ken Lewis, the banty, bug-eyed Guy Kibbee look-alike
from Charlotte, North Carolina, with the prefix “embattled” permanently
attached to his name, has become the poster boy for blind arrogance. But
he’s not alone. When Neil Barofsky, the special inspector general for the
Troubled Asset Relief Program, asked the 364 financial institutions that
had been given tarp bailout money for detailed descriptions of how they’d
allocated the loot, only a few replied in any sort of detail—not
surprising, given that the Paulson-era Treasury never required them to
keep track of the money in the first place.

Americans by and large have great affection for their president. And they
want him to succeed. But there are growing rumblings that he and his
lieutenants are seriously in over their heads. And I don’t just mean when
it comes to filling out their tax returns. Barofsky and his 36-person
staff—the folks charged with keeping an eye on our bailout money—were
assigned basement offices in the Treasury Building at first. That was bad
enough. Then, according to NPR, when it was feared that the offices had a
mold problem, the team had to relocate to another area of the basement
while a hazmat crew cleaned up their premises.

The sigtarp squad’s humble surroundings are in stark contrast to the epic
numbers they’re dealing with. When Barofsky’s report to the Senate Finance
Committee was made public, this spring, there was a collective gasp. If
you casually follow business news, you probably thought we’d put aside
$700 billion for bailout relief for financial institutions. You’d be
wrong. The “tarp Cop,” as he is known around Washington, told the
committee members that the U.S. had committed more than $2.9 trillion to
stabilize the financial markets. That’s a lot of money—specifically, it’s
like taking $9,508 from every man, woman, and child in America. If you’re
a single person living on the poverty line, that’s pretty much your income
for a year. Elizabeth Warren, the Harvard Law School professor who heads
the Congressional Oversight Panel, topped Barofsky’s estimate, calculating
that government commitments to the financial crisis could reach $4
trillion. And then it just gets worse. Barofsky warned the Senate Finance
Committee that, given past percentages of fraud in large government
programs, hundreds of billions could be lost to the criminal element.

Speaking of which, in the half-year since Bernard Madoff became the most
reviled financial mind of our day—a title for which there has been fevered
competition on Wall Street—there is still precious little we know about
him as a man, as a husband, father, and boss. Mark Seal’s article
“Madoff’s World,” in our April issue, opened a window into the con man’s
operation and manner, but this month, in collaboration with Eleanor
Squillari, Seal blows the doors off.

Squillari, a 58-year-old mother of two from Staten Island, contacted Seal
just after our April issue had shipped to the printer. He had called her
in connection with his first Madoff story, and when she finally telephoned
him back, she told him that he was the only reporter who had attempted to
reach her. She had worked as Madoff’s secretary for more than 20 years,
and after having spent two months helping the F.B.I. gather evidence
against her former boss, she was ready to tell her story.

Squillari’s remarkable first-person account, “Hello, Madoff!” finally
reveals what Madoff was really like and how his business operated. She
says he began acting strangely in the fall of 2008—refusing to look at his
mail, taking his blood pressure every 15 minutes, meeting constantly with
the heads of his “feeder” funds. Squillari knew something was wrong, but
nothing could have prepared her for his arrest, on December 11—and the
revelations about the monumental scale of his fraud. Recalling that day
and the one before it, she offers compelling details about Madoff’s
behavior—and that of his wife, Ruth. Squillari believes, for instance,
that he staged everything about his arrest.

Nearly as revealing as Squillari’s tale are the photos of Madoff and his
family that accompany the story. They were collected from numerous
sources, and, dating from the 70s onward, they paint nothing so much as a
portrait of the banality of evil. With Madoff’s sentence to come down this
month, and with the repercussions of his fraud continuing to be felt, this
intimate look inside his office and his mind allows us to more fully
comprehend the crime and the criminal so emblematic of the way we have
been living for the past decade and a half, and, indeed, of our current
economic state.

Graydon Carter is the editor of Vanity Fair. His books include What We’ve
Lost (Farrar, Straus and Giroux) and Oscar Night: 75 Years of Hollywood
Parties (Knopf).

**********
Dit bericht is verzonden via de informele D66 discussielijst (D66 at nic.surfnet.nl).
Aanmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SUBSCRIBE D66 uwvoornaam uwachternaam
Afmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SIGNOFF D66
Het on-line archief is te vinden op: http://listserv.surfnet.nl/archives/d66.html
**********