How Does It Happen?

Today Bernard Madoff was sentenced to 150 years in prison.

It really makes me wonder. How does one man end up committing the largest Ponzi scheme in history?

Now, this may be a controversial opinion, but I don't believe that people are naturally good or well-intentioned. (Probably better for a different blog post, but I know that my default mode is more selfish, and I need to overcome that... I'm not naive enough to think I'm the only one who struggles with that!) However, I don't understand how someone can be depraved enough to swindle the kind of money that Bernie Madoff swindled from his investors. After all, a Ponzi scheme is not something you fall into accidentally because you need to cover up a mistake. A Ponzi scheme, where nothing is invested, is sheer fraud, in its entirety.

It's funny how our priorities can become so disjointed. We start to feel the invincibility of getting away with our actions, and we just go further and further down the road, until one day we get caught and suddenly find it's time to face the consequences.

My dad always said that if one of us girls was caught shoplifting, he wouldn't come and post bail right away. He'd let us suffer the legal consequences. Because I never did shoplift, this always made sense to me. Sometimes the best form of grace is getting caught early on. After all, if Madoff had been caught early, he probably would have been out of jail right now and enjoying the last days of his life with his wife. Instead, he gets to be the really bad guy everyone's heard of in jail.

It's easy to look at the Madoff story and think "I would never do that." But I think that these behaviours sneak up on us. There has been a lot of discussion among the MBA community about oaths. I don't know what I think about how effective that is, but I do know that integrity is absolutely the most essential character trait for a businessperson. Allowing cracks in integrity is never a good plan. If it's tempting to lie, cheat or steal to cover up a mistake or make a little extra money, then there is nothing to stop a big lie. My dad tells a joke that illustrates this point...

A man walks into a bar and sits down next to a woman. "Would you sleep with me for $1,000,000?" He asks. "Sure!" She replies. "Would you sleep with me for $50?" He asks. "What kind of woman do you think I am?" "Well, we've already established that. Now we're just negotiating the price."

Character is character. It is only developed after years and years of right decisions, but can be torn down by one wrong one. It's easy to look at what Madoff did and say, "that would never be me." But if we allow decisions into our lives that compromise our character, then we could easily be drawn down that path.