Bernard Madoff: A Jewish Reckoning

Sermon Delivered by Rabbi Evan Moffic

Chicago Sinai Congregation
March 20, 2009
24 Adar I 5769

Bernard Madoff went to jail this week, and we can think about his story in a number of
ways. How could someone defraud individuals and charities so successfully and for so
long? How could some individuals entrust their life savings to one man? How could
wealthy and sophisticated investors be so gullible? Can Bernard Madoff ever make
amends for his crimes? Will Madoff's crimes be interpreted as confirmation of the worst
Jewish stereotypes about money and lead to greater antisemitism?
Each of these issues warrants a sermon in itself. Tonight, however, I'd like to focus on
just two questions. How could someone do something like this? What could cause a man
seemingly philanthropic, committed to the Jewish community and highly respected--to
steal billions of dollars of individuals and charities in the biggest individual financial
fraud in human history? And what, if anything, can we learn from Madoff's demise?
What insights does it about our world and ourselves, and how we can grow from it?

Our Jewish tradition is wonderfully realistic about human beings. Temptation tempts all
of us. We are not, as Classical Christianity teaches, inherently sinful. Yet, none of us is so
saintly as to be untempted by sin. As God famously says to Cain in the third chapter of
Genesis, "If you do what is right, will you not be accepted? But if you do not do what is
right, sin is crouching at your door; it desires to have you, but you must master it."
(Genesis 4:6-7)

According to news reports, many people saw Bernard Madoff as unimpeachable. He

could do no wrong. He was consistent. He always, as the movie the Godfather famously
said about the Meir Lansky character, "made money for his partners." Even more so, he
was philanthropic. He was on the board of Yeshiva University. He helped numerous
Jewish charities. Because of his reputation, his mystique, people forewent the usual
safeguards. They ignored the inadequate auditor and the incomplete monthly reports.
They ignored the seeming impossibility of the odds of consistent 10 percent returns. But
Madoff was no superman. And according to Jewish tradition, no one is exempt from the
necessary safeguards. In fact, Jewish tradition teaches us that when we forgo usual
precautions, we are, in effect, tempting the other party.

Indeed, as the Talmud teaches, Rav Yehuda said in the name of Rav: Anyone who has
money and lends it without witnesses, transgresses the commandment: "Don't put a
stumbling block before the blind". (Bava Matzia, 75a)
Putting a stumbling block before the blind is the sages' way of describing tempting
someone into wrongdoing. They are saying, for example, that even a basically honest
person may be tempted to misrepresent the terms of a loan when there is no
documentation, and while you think you are doing him a favor by not insisting on proof,
in fact you are doing him a disservice by creating this temptation. By ignoring the rules,
we tempt someone into transgression. This idea may seem awkward, but think about in
other terms. If we have a very talented student, for example is it right to say--you're so
smart. The rules on behavior and attendance don't apply to you? No. Rather, by doing so,
we teach them that they are above the rules, and make it more likely that they will ignore
and eventually undermine them.

By treating Madoff with such awe and such blind trust, very smart people provided an
opening for wrongdoing. I happen to think that Madoff was not just same kind of monster
or sociopath. He may have elements of a sociopath personality, and he clearly had little
regard for the lives of those whose money he invested. Yet, I hesitate to say too much
about him, because as my psychiatrist father suggested to me, it is unethical to presume
to know about his character and behaviors without studying or examining him. What I
can say is that his behavior is not unique in human history-- he fell prey to the temptation
for financial impropriety that embroils so many, and he had the intelligence and
sophistication to perpetuate it. He also cultivated the mystique that led others to see him
as above the law, as not needing to be bothered by petty rules. And the longer he fooled
investors and expanded the Ponzi scheme, the more difficult it become to stop it and the
more disastrous and awful his actions became.

Let us think for a moment about the Egyptian Pharaoh. We recall that after the fifth of the
ten plagues, the text tells us that God hardened Pharaoh's heart. This is quite strange. The
ability to choose between good and evil--free will--is a basic Jewish principle. Why
would God take it away from Pharaoh? Our rabbinic sages never took these words
literally. They interpreted them as an illustration of a broader truth. One evil act begets
another and another, until one becomes impossible to turn back. Rav Assi--the same one
we discussed earlier--teaches at another place in the Talmud, "At first the evil impulse is
as thin as a spider's gossamer, but in the end it is as thick as a cart-rope." (Sukkah 52a)
What the text is saying, I think, is that after the fifth plague, Pharaoh had basically lost
his free will. Like Lady Macbeth or Captain Ahab in Moby Dick, he was caught in a
downward spiral that may have had rational beginnings--right or wrong--but which
ultimately took hold of him, bringing not only him but all those around him to their ruin.
(I am grateful to Jonathan Sacks for this interpretation of Pharaoh.) The same could be
said of Bernard Madoff.

What are we take away from the Madoff experience? Can it shed light on some of our
own failings, our own tendencies to fall prey to temptations that might not reflect our best
selves? I think so. We have become a society obsessed with acquiring and awed by those
who make money. There was a joke I heard many years ago--If you're so smart, how
come you're not rich? We associate the wealthy with the wise. Now in Jewish tradition
there is nothing wrong with wealth. Rather, it is considered a great joy and privilege. But
our main concern as serious Jews is not how to make a living, but how to make a life. The
Madoff disaster and economic crisis have reminded us, I think, of what is truly sacred and
worthwhile--human kindness, dignity, family, health. Sometimes when everything around
us is going right--when our portfolios and our houses are getting bigger, we forget about
these anchors. Yet when the clouds darken and seas become stormy, we realize how
important they are.
79 years ago, F. Scott Fitzgerald wrote a story called Babylon Revisited. It's about a man
named Charlie Wales, who had lost his family and fallen into alcohol addiction during the
boom years of the 1920s. In the unforgettable closing scene, he is sitting at a bar in Paris.
It is now the early 1930s. The bartender said to him: “I heard you lost a lot in the crash.”
“I did”, Charlie said, and he added grimly, “but I lost everything I wanted in the boom.”
“Selling short?” the bartender asked. Charlie replied, “Something like that.” Selling short
meant two different things to the bartender and to Charlie. For the bartender, it was
shorting stocks. That's how Charlie must have lost his money. For Charlie, it was
referring to selling short the values that give meaning and purpose to our lives. It is much
more devastating to sell them short, and he was experiencing a different type of
bankruptcy.

Let us resolve not to sell those values short. Instead of focusing on Bernard Madoff's
terrible crimes--for which he will be punished--let us refocus our attention on the
qualities that still have tremendous value. Let us reinvest in what Madoff sold short--
trust, commitment, loyalty, kindness. Their value only increases, and the dividends are
priceless.