In his important documentary about the Bernard Madoff scandal, Chasing Madoff, you sense Jeff Prossermanis taking the wrong approach right from the moody, film-noir opening credits. Apparently unconvinced he can hold an audience’s attention by relating the facts behind the biggest financial fraud in American history, the film’s writer-producer-director aims instead for a “financial thriller.” He flips between ‘40s era black-and-white and TV-garish color, conducts interviews in stylized settings with ominous black backgrounds, goes in for melodramatic camera angles and music, ratchets up the tension with shots of oozing blood and staged killings, then throws in old photos of murdered mobsters and Wall Street’s 1929 crash.
All he manages to do though is distract a viewer from what, even in this unfortunate overblown form, is one of the most vital docs to emerge about the financial crisis in America. For the Madoff fraud typifies everything that went wrong in the Wall Street meltdown and continues to go wrong as bankers and their protective politicians continue to resist real reform.
Well, a thriller has to have a hero and Prosserman has a good one in Harry Markopolos, the whistleblower whom no one would listen to for a decade. Harry was just your average ex-army major turned securities analyst when his Boston-based investment firm confronted him with a problem: How could they compete with the high rates of return on investments offered by an obscure Wall Street investment manager named Bernie Madoff?
Markopolos says he looked at the Madoff returns for maybe five minutes before determining it was a fraud. After a little more pondering and numbers crunching, he could only imagine Madoff was running an old-fashioned Ponzi scheme, where a defrauder pays investors not from any actual profits earned but from money paid by subsequent investors. The name, of course, comes from Madoff’s predecessor in Wall Street deception, Charles Ponzi, back in the early 1920s.
So the question is if it took Markopolos five minutes to figure this out, how did Madoff bamboozle so many investors, smart and not so smart, for so long? Then the even greater question looms: Once Markopolos assembled his documents and facts and presented these first to the SEC and then to the media, why did no one do anything for 10 years?
The SEC, ignoring its job as the protector of investors, sat on Markopolos’ report. One reporter did write an expose in May, 2001, but nothing happened. Then an editor at Forbes — the movie never says who — killed a story based Markopolos’ allegations about Madoff. A few years later, the Wall Street Journal did the same thing.
The team of Markopolos’ whistleblowers, self-dubbed “The Foxhounds,” grew to include investment industry veterans Frank Casey and Neil Chelo, journalist and hedge-fund conference organizer Michael Ocrant and corporate attorney Dr. Gaytri Kachroo. Still no one listened.
So in a sense, this is not a financial thriller so much as a financial mystery. Which gets a bit lost in the movie’s stylized presentation.
Perhaps the film’s greatest overreach comes in its dramatization of Markopolos’ paranoia. Fearing, not unreasonably, that he or his family might be the target of violence from cronies of Madoff, who was not unaware of Markopolos’ 10-year crusade against him, the film takes refuge in thriller clichés. In clearly staged scenes, Markopolos constantly loads and reloads a gun and checks under his car for bombs while the movie displays old photos of hit men’s victims. Yet the film offers not one scintilla of evidence that the Markopolos family was ever in any real danger.
Another section builds to the moment when Markopolos manages to get his file of documents into the hands of New York Attorney General Eliot Spitzer. Then the movie completely drops the ball. What happened? Couldn’t the filmmaker at least have called Spitzer, himself the subject of a doc last year, and asked him if he ever looked into the allegations? Spitzer was never shy about pursuing Wall Street crooks while Attorney General.
What this noir nonsense distracts you from is the real subject. Madoff didn’t pull this fraud off alone. An army of enablers such as the French aristocrat and feeder-fund hawker Rene-Thierry Magon de la Villehuchetaided and abetted the scheme. Markopolos handed him his files and made clear his concerns, but de la Villehuchet chose to ignore these warnings.
At least de la Villehuchet had the decency to commit suicide, but hundreds if not thousands more have escaped culpability. These are Wall Street denizens who should have known the returns were fishy but were too incentivized by greed and the huge fees Madoff allegedly paid to feeder funds not too look too closely.
Madoff, ultimately brought down by the financial crisis and not by Markopolos, got a 150-year sentence. Few others have been brought to justice.
The most heart-rending parts of the movie involve Madoff’s victims, who appear on camera identified only by their case numbers and speak about the dreams and retirement plans stolen from them by Madoff’s incessant greed. Ultimately, our government and media failed to do their job. There is no sign, however, that any lesson has been learned. To underscore this point, the film is dedicated to those who will fall in the next financial crisis.
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