The fate of Bernie Madoff’s sons should be a lesson for all dads on the importance of integrity
CHARLES Ponzi was married for almost 20 years but never had children. That’s a good thing. Imagine how it’s like going through life with a father and a family name that are forever linked to investment fraud, particularly the kind that delivers unrealistically high and consistent returns by using money from new investors to reward earlier investors.
Mark and Andrew Madoff didn’t have to rely on their imagination; they struggled in the dark, suffocating shadow cast by their father’s wrongdoings when he operated what is widely believed to be the largest Ponzi schemes ever. Daddy is Bernie Madoff, the New Yorker who had collected billions of dollars for an investment fund with bogus returns that had run for decades until his arrest in December 2008.
Neither of his sons is around anymore. Mark, the older of the two, committed suicide exactly two years after Bernie’s arrest. Andrew died of lymphoma, a type of cancer, in September 2014.
The two men had worked in Bernard L. Madoff Investment Securities LLC for many years but denied any involvement in the massive swindle. When the global financial crisis of 2007-2008 had dried up the flow of fresh funds from investors, the scheme began to crumble and Bernie confessed to Mark and Andrew on Dec 10, 2008, that the firm’s investment fund was “just one big lie”. The sons then went to the authorities and overnight, Bernie became the poster boy of Wall Street greed and deceit.
Despite distancing themselves from their father’s sham and despite the fact that they weren’t charged with any crime, Mark and Andrew faced civil lawsuits from those who wanted their money back. They and their mother, Ruth, were sucked into a whirlwind of speculation, suspicion and anger. Many people refused to believe that Bernie’s family members were totally unaware of his con game.
It seemed that life became unbearable for Mark. After he had hanged himself, his lawyer, Martin Flumenbaum, issued a statement that called the suicide “a terrible and unnecessary tragedy”. “Mark was an innocent victim of his father’s monstrous crime who succumbed to two years of unrelenting pressure from false accusations and innuendo,” said Flumenbaum.
In an April 2013 interview with People magazine, Andrew said, “My brother did not like to lean on his friends for support, and he suffered alone because of it.”
Andrew coped differently and tried to get on with life. He started a business with his fiancée. But his illness made things difficult.
He had overcome the rare mantle-cell lymphoma before but it came back. In the People interview, he said he believed that the stress of the last few years at least partially opened the door for his cancer. “One way to think of this is the scandal and everything that happened killed my brother very quickly. And it’s killing me slowly,” he added.
In that interview, he also said this about Bernie: “I will never forgive him for what he did. He’s already dead to me.”
No matter what Bernie thinks about his sons, they are dead. And we do have some insight into how he feels about Mark and Andrew because he sent an email to NBC News in January this year to defend the sons’ innocence.
“As difficult as it is for me to live with the pain I have inflicted on so many, there is nothing to compare with the degree of pain I endure with the loss of my sons Mark and Andy,” he wrote.
“I live with the knowledge that they never forgave me for betraying their love and trust. As much as I tried to reach out to them in an attempt to explain the circumstances that caused my betrayal they could not find it possible to forgive me.
“I do understand their unwillingness. The fact that I was trying to protect our family by sheltering them from any knowledge or involvement in my wrong doing still fails to allow me to forgive myself. What is still my most important goal is to do everything in my power to protect their legacy.”
It’s interesting that Bernie mentioned legacy. Tomorrow is Father’s Day. It’s celebrated all over the world with people showing appreciation for their dads with greetings, gifts and special meals.
It should also be a day for fathers to think about their legacy for their children. Bernie must surely regret how his actions had terribly burdened the last few years of his sons’ lives. He probably wonders if they’d be alive now if he had not been a fraudster.
Most Malaysian businessmen want to build strong enterprises that their children can inherit, in the hope that they have equipped their children with the abilities and experience to grow those businesses.
But they should also pass on to their children a firm belief in doing the right things always.
Teaching a child that the end justifies the means is a form of parental neglect. By engaging in unethical behaviour and by ignoring good governance practices, a businessman is steering his children away from learning good stewardship.
Most importantly, a business leader without integrity risks condemning his children to a life tainted by the sins of the father.
Executive editor Errol Oh is a father who’s glad he didn’t start a Ponzi scheme.