As I’ve spent the last 18 months, give or take a week or two, in our home in Palm Beach, it’s freakish that I was away for the Madoff explosion. “It’s as if an atomic bomb hit us,” said my closest friend’s husband, speaking of Palm Beach’s Jewish community. He never invested with Bernie Madoff. “Three reasons,” he explained. “He never reported a quarter where he lost money. In his financial reports, the footnotes were at least twice the length of the accounts, and I had never heard of his upstate New York accounting firm in Muncie.”
The mushroom cloud is centred over the Palm Beach Country Club, founded as a rebuttal to the de facto exclusion of Jews from the island’s tony private clubs. Sidelined even to this day by many of Palm Beach’s old families, its founders were determined to reflect the excellence of Jewish values. “Mitzvah” is a club rule, which translated means a substantial philanthropic background is a prerequisite for membership. Guesstimates are that one third of its 300 members are Madoff victims. The result: charity recipients beached as endowments vaporize and charities close.
And poof goes discretionary spending. Some are gleeful as once-rich matrons cancel their trunk-show orders of gowns, but spare a thought for the hard-working sales staff whose entire income is commission-based. Palm Beachers who do continue buying are samizdat shoppers. “Wrap it up into the tiniest ball you can,” one woman in a Worth Avenue boutique told her salesgirl, carefully holding the newly purchased, freshly ironed dress. “I’ll put it in my cosmetics bag. The housekeeper can iron it out.” The high-priced garden landscapers that make this flat sandy bog bloom are not used to the question, “How much will it cost?” The 77-year-old British peer Lord (Anthony) Jacobs, a part-time resident of the island, told the Daily Mail the amount he had lost was “not peanuts” (it was rumoured to be US$200 million). He had recently sold his house in Cap Ferrat to a wealthy Russian for 120 million euros and transferred the funds to his “good friend Bernie to manage.”
Rumours travel and twist like tumbleweed in a tornado. Multi-millionaire Robert Jaffe, a pivotal social figure in Palm Beach’s Jewish social scene, who promoted Madoff’s funds, is whispered to have had little money in the funds himself even though he’s made the biggest show in town of selling his tuxedos and jackets to a consignment shop. Who knows? With this volatile mix of schadenfreude and loss, the wildest stories gain plausibility. Nothing can be verified; no one will permit their names to be used. This is a disaster zone where escaping the blast seems to have as many social dangers as being caught in it. “They made us feel so small,” said a woman who had not invested with Madoff. “It was an exclusive club that couldn’t lose money that we couldn’t join.”
If Madoff’s alleged confession is true, he was a con man in an old tradition. Like every con man’s hunting grounds, his was the social milieu that he knew. Being a Jew, most of his victims are Jews. But that is no protection against the ill will the Jewish community is feeling from outsiders. The perception of Jewish wealth has always been a double-edged accomplishment fraught with unpleasant overtones. Even in the best of times, “Jew” or “Jewish” can be used as an adjective of dishonesty or usury (in older dictionaries you can find it as a verb, too), and these are not the best of times. Who needed a Jew to establish some new fraud record now, just when the Jewish people are at their most beleaguered point since the 1930s and at exactly the time the world is undergoing a major unrelated fiscal crisis that hurts everybody? The state of Israel battles terrorists today who situate themselves by schools and in crowded streets. “Is it just ‘spin’ to claim that Hamas has been firing rockets into Israel?” a fill-in CBC news reader cheerily asked its reporter near Gaza, unconsciously confirming a lens clouded by years of anti-Israeli propaganda.
This constellation of misfortunes could hardly come together at a more inauspicious time for the Jewish people. For thousands of years rabbis have been explaining Jewish suffering as a glorious destiny. I can’t help recalling that the most notorious swindler of the Jewish people was the 17th century’s Shabtai Zvi, whose claim to be the new messiah took root in Gaza. I’m sure the rabbis can put this in perspective, but all I can say is that, like Shabtai Zvi, Bernie Madoff is one big disaster for the individuals he cheated and for all Jews, whether he cheated them or not.