RC 6

Don't shoot the messenger is usually a good rule to live by. But it is hard when it comes to Bernie Madoff,

the former billionaire serving a 150-year jail term for running history's biggest Ponzi scheme.

Yet, in recent jailhouse interviews, Madoff has given a valuable insight into causes of the Great Recession,

whose awful impact has blighted millions of lives across America and around the world. No one can deny

Madoff's activities were an appalling fraud, but, he insists, what about the involvement of everyone else in

the global financial system.

"They had to know," Madoff told the New York Times, referring to the banks and hedge funds that greedily

reaped millions in fees from his operations. He pointed out to New York magazine that he refused to give

the banks any information as to how he got such high returns and would not let them do due diligence. Yet

they never complained.

"These banks and these funds had to know there were problems," he said.

No wonder that Irving Picard, the trustee representing Madoff's victims, has filed a civil suit seeking damages

from banks who did business with Madoff. They include big Wall Street names like HSBC, Citigroup, JP

Morgan and Merrill Lynch. Just because Madoff is a crook sitting in jail does not mean he isn't right when

he tells us to look elsewhere, too.

Yet, unfortunately, Madoff is the only one behind bars.

That is the worst thing about the whole sorry saga. Madoff and his scheme have become a useful foil for the

entire finance industry – and a distraction from its venality. It's always Madoff that the tabloids put on the

front pages. It's Madoff who is the ultimate banking bogey man. It's Madoff who spurs public outrage and

whose jailing has satiated a quest for justice. It is the classic "one bad apple" defence of the kind banks

and Wall Street specialise in. It is not the system's or the bosses' fault, they say, it is just a few rogue

operators and they have been dealt with.

But we should not be fooled. We should listen to Madoff when he fingers the whole financial sector and the

giant firms within it as part of the problem, too. He told New York magazine:

"It's unbelievable … no one has has any criminal convictions. The whole new regulatory reform is a joke."

He's not alone in being amazed that, despite the astonishing frauds and manipulations by Wall Street

during the boom years, not one top banking or hedge fund executive sits in jail. It is indeed jaw-dropping.

31. Which of these can be inferred as the 'insight' given by Madoff?

(a) The Recession was caused by a few rogue operators.

(b) The Recession was caused by the failure of the banks and financial organizations.

(c) The Recession was caused by the venality of the finance industry.

(d) The Recession was caused, in part, by the actions of the banking and 

financial industry.

32. Why does the author call Madoff the ultimate banking bogeyman?

(a) Madoff has come to represent the wrongs committed by the banking industry.

(b) Madoff has come to represent the type of agent that caused the recession.

(c) Madoff's actions were like those of a bogeyman.

(d) Madoff was to blame for the banking industry losing millions.

33. Which one of these would be the best title for the passage?

(a) Bernie Madoff – The new banking poster boy

(b) Beyond Madoff - Who else is to blame for the Recession?

(c) How did Bernie Madoff cause the Recession?

(d) How did the financial sector contribute to the Recession?