One thing that has everyone scratching their heads about this Madoff Scheme is how quickly and completely Bernie Madoff reportedly confessed first to his employees and, when confronted by FBI agents in his home, to the government.
Crisis management expert Eric Dezenhall writes that he was “floored” by the confession.
“My experience with these affairs is that the accused uber-gonif tells everyone who will listen, including his legal and damage control team, that the charges against him are ‘total bullshit.’ Not that some of the allegations are wrong; rather Virtually Every Negative Thing Being Said About Me Is 100% Certified Grade-A Imported Bullshit,” he writes over at the Daily Beast.
So what happened with Madoff? One possibility is that he bought the two canards floated by the media after almost every scandal. Those, according to Dezenhall, are:
- “Fess up and the problem will go away” and
- “It’s the cover up that nails you.”
Of course, both of those are nonsense. Confessions are a prelude to conviction, not vindication or forgiveness. As Dezenhall explains, “admissions don’t make your victims and the public want to forgive you, they make them want to kill you.”
The idea that the cover up is worse than the crime is built on an illusion of visibility. Failed cover-ups may often make the initial crime worse. But the typical model should be built on the many sucessfull cover ups. When cover ups work, you don’t hear about the initial crime. So the real lesson is: if you are going to do a cover up, do it well.
So why did Madoff break from the usual pattern of denial? There’s a widespread suspicion that he hasn’t broken from the pattern, that his confession is in fact a cover up of a much broader scheme. By trying to take all the blame on himself, Madoff could be covering up for accomplices. We haven’t heard from even one person who believes that not one member of his family who worked at his firm knew about this. (The picture illustrating this item, for instance, depicts Mark Madoff. We have no idea who the guy holding him up is, though.)
Dezenall has a more innocent explanation: Madoff just temporarily flipped out when it became clear the fraud could not go on.
“I suspect that Madoff’s confession is an aberration borne out of the visceral catharsis that occurs when the Joker in the deck suddenly turns up — the Joker that precedes a catastrophic depression,” he writes.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.