A few comments
about last Thursday’s hearing before Judge Chin on the Madoff matter
may be warranted.
Reading the transcript with
a lawyer’s eye, it seems evident that Judge Chin had made up his
mind as to what he was going to do before he walked into the courtroom.
Giving people a right to speak was form, not substance. The transcript
shows that it plainly affected nothing. The judge took no account
of people’s comments or logic when rendering his decisions. Sic
semper transcriptus. For judges to walk into courtrooms with
their minds already made up, so that whatever is then said to them
is of no moment, is hardly unusual. If anything, the reverse. Allowing
lawyers or, as here, others to speak is often just a pro forma way
of fooling people into thinking courts are open minded and objective.
To doubters, to the naïve, all I can say is “Sorry, but those are
often the facts.” So too they plainly seem the facts here, notwithstanding
that there were those who came thousands of miles to speak.
One of the judge’s decisions
was to deny bail and have Madmanoff locked up. Nobody but Madmanoff’s
lawyers objects to that. But it is curious that little has changed
since another judge previously granted bail, and let Madoff stay
in his penthouse, with access to his computer - and to who knows
how much or what information - so that he could work for three months
on keeping his money hidden, on keeping it beyond the reach of the
feds (as by transfers and attempted transfers of money and property
(remember the jewels?) to his wife and family.)
Judge Chin pointed out that
Madoff has the motive and means to flee and therefore presented
a risk of flight. This was all correct. But he had the same motive
and means and presented the same risk three months ago, when a different
judge merely put him in an ankle bracelet and under house surveillance,
both of which could have been continued now if they in truth were
sufficient. True, now he has pled guilty. But he had confessed
to the FBI on December 11th. Am I wrong in thinking a confession
is itself an admission of guilt, just like a plea of guilty is?
Madoff
knew in December that he would be going away for a long time. In
fact, if you believe his allocution (his statement in court), he
has known it for many years. So nothing about motive and means to
flee and risk of flight had changed last Thursday. The only difference
was that in December a judge, with the leniency typically extended
to white collar criminals, let a man, who had 800 million dollars
which he could use for fleeing from the jail time awaiting him,
stay in his penthouse and use his computer to move and hide money,
whereas Judge Chin said, defacto, enough already.
Judge Chin’s other decision
was to accept Madoff’s guilty plea. The judge was in possession
of at least one document showing that there were people who
thought with good reason that accepting Madmanoff’s guilty plea
was a very bad idea, and heard one person who had come thousands
of miles to say that, very briefly, in court. But as the transcript
makes evident, Chin had made up his mind to accept the guilty plea.
This was a bad decision, I think. Rejection of the plea would have
put pressure on Madoff to disclose much more to the feds, with whom
he apparently is being uncooperative, including being uncooperative
as to where all the money went. If
the guilty plea were rejected, and remained rejected, there would
be a trial at which lots of evidence would come out about how the
dirty deed was done and who was involved, evidence that would likely
- I personally think would certainly - implicate family members
whom Madmanoff is therefore trying to protect, if he can, by pleading
guilty. If the pressure of a possible trial at which hordes of facts
would become public were put on him, Madoff could prove more tractable
to the feds in exchange for a reduction in the punishment to be
meted out to his family members. Such tractability could include
telling the feds where all the money is, including the money set
aside for his family.
In response to any and all such
objections to accepting Madmanoff’s guilty plea, Judge Chin said
only that “as the government has just said, it is continuing its
investigation and this guilty plea certainly does not preclude the
government from proceeding.” That putative answer is actually a
non answer. Not only does everyone know the government is continuing
its investigation, but Judge Chin did not even mention, let alone
assess, the relative advantages to the government’s investigatory
effort of accepting or rejecting the guilty plea at this time and
thereby eliminating right now even the threat of a trial. This was
bad. Very bad, in my estimation.
But there is, unfortunately,
more.
I
personally am not familiar with the law on whether a guilty plea
should be accepted when the judge knows, suspects, or should know
or suspect that the defendant is lying to him or holding back important
information. But I’ll bet the law says the judge can, or maybe it
conceivably even says he should, reject the guilty plea, especially
since the lies or continuing concealment show the defendant is not
accepting full responsibility for what he did. Lying and holding
back information is what Madoff did in his allocution if one believes
the government.
For example, Madmanoff says
his best recollection is that his Ponzi scheme began in the
early 1990s. Can you imagine that? The operator of what might be
the world’s largest fraud ever, the man who probably had to keep
huge amounts of relevant information in his head over fifteen or
twenty years or so, claims he does not remember for certain when
he started this fraud! He can only give his best recollection. Gimme
a break!
Even
more important, the government says the fraud started at least as
far back as the 1980s, not as “late” as the early
1990s. What’s the chance that Madmanoff is not lying when
he claims his best recollection is that he started his scheme in
the early 1990s? Pretty low, if you ask me. Why is he lying
about the starting date? That is an interesting question, is it
not? But Judge Chin did not ask it, and seemed oblivious of the
entire point. Why did Madoff start the scheme, regardless
of what the starting date was? He said the reason for starting it
was that “I had received investment commitments from certain institutional
clients and understood that those clients, like all professional
investors, expected to see their investments out-perform the market.
While I never promised a specific rate of return to any client,
I felt compelled to satisfy my clients’ expectations, at any cost.”
Huh? He felt “compelled” to satisfy the clients’ expectations “at
any cost?”
Just who were these supposed
institutional clients whose expectations he had to fulfill at any
cost, and why? His statements resonate of leg breakers or worse,
not of institutional clients. In any event, what clients - and what
kind of clients - were so important that he had to fulfill
their expectation by a massive fraud if he could not do so legitimately.
The question fairly screams from the transcript, as I would think
it must have screamed from Madoff’s allocution if one had been listening
carefully and thinking about what was being said. Judge Chin was
oblivious.
Another
point, raised by the government in papers it filed prior to the
hearing, so that Judge Chin could have read and absorbed the point
at his leisure before the hearing, is similar in import. The government
said Madoff had promised some people returns as high as 46 percent.
Huh? Forty-six percent? Are you kidding me? Who were these
people? Mafiosi with leg breakers or worse? People who knew what
was going on and demanded such huge “earnings” in return for silence?
Complete dummies who would believe you could make 46 percent year
after year? It is inconceivable that anyone could be that stupid,
could believe this could be done honestly and legitimately. So the
questions of who were the people who were promised returns like
46 percent, and why were they promised this, scream for an answer.
But Judge Chin was oblivious.
Madoff claimed his Ponzi scheme
had zip to do with his legitimate broker-dealer business. The feds
said it helped finance that business. Once again, Judge Chin should
have known that, if the feds were telling the truth, then Madoff
was lying to his face. Once again the Chin was oblivious. It never
even quivered.
So, if you ask me, the judge
acted badly in accepting Madoff’s guilty plea. He allowed Madoff
to lie to his face and not to answer questions that cried out for
answers. As well, by eliminating the possibility of a trial in which
so much would come out, he potentially cloaked much or most of the
facts in the non-transparency for which the U.S. government and
all its branches have been infamous since at least 1964,
if not before. Now what we shall learn - and, maybe more importantly,
what is kept from us - is totally within the discretion of the government,
rather than almost inevitably being exposed at a trial due
to the exigencies of trial. Bad. All very bad - unless one
takes the position that what this country needs, and what Madoff’s
victims need, is more secrecy, not less.
BlackCommentator.com
Columnist, Lawrence R. Velvel, JD, is the Dean of Massachusetts
School of Law. He is the author of Blogs From the Liberal Standpoint: 2004-2005
(Doukathsan Press, 2006). Click here
to contact Dean Velvel, or you may, post your comment on his website,
VelvelOnNationalAffairs.com. |