Bernie Madoff: A Journalist’s Story About the Ponzi Scheme
By Jennifer DePaul
It should come as no surprise that Bernie Madoff lied to author and New York Times reporter Diana Henriques. The Ponzi scheme artist had betrayed the trust of thousands investors and close friends so many times before. Henriques, author of “The Wizard of Lies,” a book about the Madoff scandal, was the keynote speaker at CAMP and told us about her adventure meeting, interviewing and writing about him.
Madoff was arrested in December 2008 for securities fraud and immediately after he pleaded guilty, Henriques requested an interview. As a financial journalist for the New York Times, she wanted to write a book about “this incredible story of trust and betrayal” because “this already historic financial story catapulted into something Shakespearean.”
But it took her over one year to finally land an interview with Madoff while he was in prison. After repeated requests for an interview, in the fall of 2009 she received a handwritten note from Madoff that he was still not going to grant her an interview. That didn’t stop her.
Memo to young journalists: never give up.
Finally, in August 2010, she got word from Madoff’s lawyers that he would do the interview, but only if it was embargoed for the book she was working on: “I was off to see the Wizard.”
It was the first of two in-person interviews. Her first interview with Madoff in jail was old-school journalism. She was allowed two hours but without any type of recording device. Yikes!
The original title of her book was “A World of Lies,” but after meeting Madoff she knew it had to change. Henriques described him as someone who had the gift of seduction, low key and soft spoken. He was someone who made others feel smart. “It wasn’t until I met him, that I understood his remarkable magnetism,” she said.
Henriques said one of the main reasons the Madoff story resonates so well with the public is because humans are hard-wired to trust people. “Trust is our default position. We assume they are trustworthy unless proven otherwise,” she said.
Madoff assured Henriques that she was the only journalist he would deal with. On her second interview, she confronted Madoff about rumors that he was exchanging emails with other reporters. He conceded it was true. All bets were off. An embargo is a two-way contract, she said, and that night Henriques wrote a story about her interview with Madoff that lead the front page of the New York Times the following day.
“Trust was the first casualty when he was arrested in December 2008. It was the first but not the last,” Henriques said.
Henriques said the casualties of the Ponzi scheme rippled around the world and even included the media. The human drama is endless. A financial reporter who fell in love with business news by covering the municipal bond market, she frequently cautioned her readers not to take on more risk than you can afford; don’t put all of your eggs in one basket; and don’t invest in things you don’t understand.
But thousands of people looked right past the cautionary signs, she said. The Madoff scandal was a wake-up call, she said. One lesson from the scandal: “trust is a two edged sword and it is always trumped by our best efforts at consumer service.”
Henriques still maintains a relationship with Madoff today. “He hated the title. He thought it was too sensational,” she said. After reading her book, they disagreed on when his fraud started. He said it started in 1992, but she said it began much earlier. Nonetheless, Madoff praised Henriques for the book but told her the “vivid details” were hard to read.
The book is being considered by HBO to be turned into a movie possibly starring Robert DeNiro who would play Madoff. It is currently being translated into several different languages. “The Russian translation of my book is probably going to be in the ‘how-to’ section,” she joked.
Henriques said writing the book changed the way she reports stories. She notices sounds, visual cues, and the feeling of scenes.
Finally, her advice to all journalists: get financially literate, regardless of what you cover.