WASHINGTON, DC — Wall Street investment manager Bernard Madoff appeared before a congressional committee Monday to ask for $60 billion to reimburse investors who have lost money with his firm in what appears to have been a massive Ponzi scam.
A contrite Madoff expressed his regret at the pain caused by his failure to properly manage his clients’ investments, and outlined his proposal to pay everyone back. “If I could get 60 billion dollars from the federal government,” he said, “I will be able to pay back all my initial investors, while providing them with substantial returns.”
Representative Barney Frank, Chairman of the House Financial Committee, told Madoff that any federal assistance would be in the form of a loan and not a bailout. “What is your plan to pay the government back?” he asked.
“I will seek out more investors,” Madoff replied. “I will be diligent in seeking money from new investors that I will use to repay the federal government.” Madoff called it a “win-win” situation.
“And for these new investors,” asked Frank, “how will you ensure they don’t sustain insurmountable losses?”
“I will use the money from even newer investors to guarantee a profit for the previous ones,” said Madoff. “And then I will go back to the investors who have already seen returns, and ask them to reinvest; bascially, they just have to let me keep their money.”
“For the record,” said Frank, “you’re saying that all existing investors will be paid from the funds of even newer investors.”
“Yes, yes,” replied Madoff. “And furthermore, any investor who doesn’t pull their investment out would enjoy substantial returns for years to come.”
“Including the federal government?”
“Absolutely,” said Madoff. “Let me keep the money. Don’t ask for it back, don’t even think about it. Let your constituents enjoy substantial returns.”
“For years to come?”
“Exactly. Now you’re getting it.”
Rep. Frank was intrigued with the proposition, but still had some reservations. “What happens if all the investors pulled out tomorrow?”
“No investment is without risk,” said Madoff. “That’s on our letterhead.”
Frank praised the Wall Street businessman for trying to make right by his investors and recommended to his colleagues to authorize financial assistance. “We all make mistakes,” said Frank, “but it’s a sign of true integrity to correct your previous mistakes by intentionally making new ones.”
“One more thing,” added Madoff. “I need the money by four o’clock or none of this is going to work out.”