Across the pond

Bernard Madoff, pictured here, is one of the several financiers who made millions and billions for themselves during the boom years of de-regulation issued in by Margaret Thatcher in UK and Ronald Reagan in the US. With scant regard for financial probity and no regard at all for the law of the land.

Astonishingly Madoff got away with it. Not only that he had no difficulty in getting the world’s leading banks to back him. So that today, thousands of people are having difficulty in paying the mortgages of a few hundred thousand granted by the prestigious High Street banks, because Madoff built his empire on a £50 billion fraud.

The BBC, because its editors and reporters are dedicated to careful journalism, describes it as ‘an alleged fraud’.

In fact, Madoff has confessed.

He has admitted that his empire, which attracted the support of leading banks around the world, was based from the beginning on a quite deliberate fraud.

Madoff, as he has now revealed, got his millions from attracting huge investment funds. He paid his investors, not from the income of the investments he had made, but from the money he was attracting from new investors, who entrusted him with their money. One of the oldest scams in financial history.

According to prudent accounting methods, Madoff’s ventures, shourld have been highlighted as highly dangerous investments. Instead he was lauded by the financial communnity. Became the chairman of the Nasdaq Stock Exchange in US, which role meant that he was supposed to regulate their activities. And was renowned as a contributor to charitable causes. All from money he had made by fraud, as he now reveals.

Madoff’s crimes came to light, because when he realised the game was up, he tried to salvage a mere £500 million for himself and his family. And failed because the debts of his empire was so vast.

He is a self-confessed fraudster, who knew what he was doing throughout his career.

But what about all the auditors, the accountants, the stock exchange authorities, the banks and other investment institutions, who put their money in this extremely dodgy outfit.

Many other financiers have benefited from licence which Thatcher and Reagan gave to the world’s most unscrupulous financiers to make their millions, and billions, based on the hope that stock market prices and property prices would go on rising.

That the boom would go on forever.

Most of the professionals in the City of London and on Wall Street are not now on the breadline. They have invested their huge bonuses and can continue to live in the homes of their choice.

Unlike all those poorer people who were encouraged by the banks and the building societies to borrow far beyond their means.

It is the 1930s all over again. When the lengthy investigations during Roosevelt’s Presidency revealed that the slump of 1929 and the ensuing Great Depression, was caused not only by wishful thinking on the part of financiers, but deliberate criminal activity, right up to the level of the then chairman of the New York Stock Exchange.

So for the sake of our children and grandchildren, it is up to us to persuade Barack Obama and other world leaders like our own Gordon Brown, that they need to shape a world where the bankers and other financiers, will be properly regulated.

That their accounts be audited by independent accountants. That they disclose their accounts in full. And that they are not placed above suspicion because  they donate to ‘charitable causes’.