January 23, 2009

GSTAAD—If someone bet that The Spectator issue of 10 January outsold or was read by more people than any other weekly — and that includes best selling popular crap like Hello! and OK! — they’d be collecting their winnings as I write. This, of course, in the Bernese Oberland region of Switzerland, where Gstaad lies. I suppose it had to do with something concerning the Madoff gang, most of whom live around these parts, and as of this moment are pretty pissed off with a certain poor little Greek boy. As I had predicted, the gang does not fight but screams and whines a lot. Their women, rather. If a member of the weaker sex insults one, the normal thing to do is to take a swing against her man. But what happens if the man pretends to be constraining the woman? Who does one hit? The concierge?

Actually, it’s very funny. A friend of mine ran into a banker and his wife in the grill of the Palace hotel where the banker was giving a dinner, and jokingly asked them how it felt to be broke. The woman got on top of a table and screamed insults at him, calling him a preposterous poofter—my friend’s openly gay—and threatening to drive him out of Switzerland. Unfortunately I was not present. And my ridiculous friend sent her flowers the next day apologising. In other words, the gang took investors’ moolah, gave it to Madoff and when the you-know-what hit the fan turned into posturing peacocks spouting rubbish about fair play and good manners.

Two things which are in very short supply around these parts. Now, let’s get down and dirty. If there are people out there who still believe Madoff acted alone, do come and join Elvis Presley and me, both in person, in the Eagle club next week. (John Lennon will also be there, although I can’t stand the son-of-a-bitch.) In May of 1999, a very nice Greek–American by the name of Harry Makropoulos, the world’s greatest expert on derivatives, sent a report to the SEC’s Boston office calling the Madoff operation the ‘world’s largest hedge fund fraud’. My fellow Greek stipulated that ‘my name not be released to anyone other than the Branch Chief and Team Leader in the New York Region without my express permission. I am worried about the personal safety of myself and my family. The report has been written solely for the SEC’s internal use.’ Whom was he afraid of? Those in the know say Mossad and Israel; I say rogue Mossad agents acting alone with Madoff.

Makropoulos nailed Madoff, listing the back-door marketing and financing schemes as if he were an insider. But the SEC did not respond. Powerful political voices ordered the SEC not to proceed. I am not naming names because libel laws mostly favour the criminal in Europe, and their names will never get past the libel lawyers. The largest investors were not Jewish charities as was reported by Jewish-owned newspapers in New York, but French, Spanish and Swiss private banks. It was Sonia Kohn, of the Medici bank of Vienna, a woman who makes Midge Dexter look like Ava Gardner, who involved Charles Fix, and not Andres Piedrahita, as I reported two weeks ago. (The latter screwed plenty of Spaniards and jet-setters but missed Fix. He has cancelled his 45-meter gin palace, and his G-2 lies on the tarmac in Madrid unused as of this writing.)

In his report, Makropoulos predicted the implosion of all the main funds (which he named) that dealt with Madoff four years before they imploded. That nobody listened or did anything about it is a major scandal in itself. But I’m betting the farm that no one in the SEC will go to jail for it. Which brings me to the unpleasant family of the crook. The idea that his brother, two sons, nephew and niece and, above all, his wife, Ruth, did not know of the scam is preposterous. Madoff knew the game was up at least 14 months before the end — i.e., the great con artist had more than a year to prepare how to con the government about who was in on the con. The so-called ‘feeder funds’ now claim they knew nothing and are themselves victims. But they should have known. Whatever happened to due diligence? Those leading investors with Madoff are meant to be smart. In fact much smarter than those Royal Bank of Scotland idiots who believed in Blavatnik and Deripaska and lent the two Russians billions.

What a world we live in. Banks won’t lend money to honest business people but will push it on to Russian oligarchs. But if anyone is waiting for the British government to investigate loans to Russians, do please also come to my lunch for Elvis next week. In the meantime, as my old friend Nigel Dempster used to say, watch this space. Gstaad is getting interesting at last.


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