Damned Heretics

Condemned by the established, but very often right

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Qualified outsiders and maverick insiders are often right about the need to replace received wisdom in science and society, as the history of the Nobel prize shows. This blog exists to back the best of them in their uphill assault on the massively entrenched edifice of resistance to and prejudice against reviewing, let alone revising, ruling ideas. In support of such qualified dissenters and courageous heretics we search for scientific paradigms and other established beliefs which may be maintained only by the power and politics of the status quo, comparing them with academic research and the published experimental and investigative record.

We especially defend and support the funding of honest, accomplished, independent minded and often heroic scientists, inventors and other original thinkers and their right to free speech and publication against the censorship, mudslinging, false arguments, ad hominem propaganda, overwhelming crowd prejudice and internal science politics of the paradigm wars of cancer, AIDS, evolution, global warming, cosmology, particle physics, macroeconomics, health and medicine, diet and nutrition.

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Henry Bauer, Peter Breggin , Harvey Bialy, Giordano Bruno, Erwin Chargaff, Nicolaus Copernicus, Francis Crick, Paul Crutzen, Marie Curie, Rebecca Culshaw, Freeman Dyson, Peter Duesberg, Albert Einstein, Richard Feynman, John Fewster, Galileo Galilei, Alec Gordon, James Hansen, Edward Jenner, Benjamin Jesty, Michio Kaku, Adrian Kent, Ernst Krebs, Thomas Kuhn, Serge Lang, John Lauritsen, Mark Leggett, Richard Lindzen, Lynn Margulis, Barbara McClintock, George Miklos, Marco Mamone Capria, Peter Medawar, Kary Mullis, Linus Pauling, Eric Penrose, Max Planck, Rainer Plaga, David Rasnick, Sherwood Rowland, Carl Sagan, Otto Rossler, Fred Singer, Thomas Szasz, Alfred Wegener, Edward O. Wilson, James Watson.
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Many people would die rather than think – in fact, they do so. – Bertrand Russell.

Skepticism is dangerous. That’s exactly its function, in my view. It is the business of skepticism to be dangerous. And that’s why there is a great reluctance to teach it in schools. That’s why you don’t find a general fluency in skepticism in the media. On the other hand, how will we negotiate a very perilous future if we don’t have the elementary intellectual tools to ask searching questions of those nominally in charge, especially in a democracy? – Carl Sagan (The Burden of Skepticism, keynote address to CSICOP Annual Conference, Pasadena, April 3/4, 1982).

It is really important to underscore that everything we’re talking about tonight could be utter nonsense. – Brian Greene (NYU panel on Hidden Dimensions June 5 2010, World Science Festival)

I am Albert Einstein, and I heartily approve of this blog, insofar as it seems to believe both in science and the importance of intellectual imagination, uncompromised by out of date emotions such as the impulse toward conventional religious beliefs, national aggression as a part of patriotism, and so on.   As I once remarked, the further the spiritual evolution of mankind advances, the more certain it seems to me that the path to genuine religiosity does not lie through the fear of life, and the fear of death, and blind faith, but through striving after rational knowledge.   Certainly the application of the impulse toward blind faith in science whereby authority is treated as some kind of church is to be deplored.  As I have also said, the only thing ever interfered with my learning was my education. My name as you already perceive without a doubt is George Bernard Shaw, and I certainly approve of this blog, in that its guiding spirit appears to be blasphemous in regard to the High Church doctrines of science, and it flouts the censorship of the powers that be, and as I have famously remarked, all great truths begin as blasphemy, and the first duty of the truthteller is to fight censorship, and while I notice that its seriousness of purpose is often alleviated by a satirical irony which sometimes borders on the facetious, this is all to the good, for as I have also famously remarked, if you wish to be a dissenter, make certain that you frame your ideas in jest, otherwise they will seek to kill you.  My own method was always to take the utmost trouble to find the right thing to say, and then to say it with the utmost levity. (Photo by Alfred Eisenstaedt for Life magazine) One should as a rule respect public opinion in so far as is necessary to avoid starvation and to keep out of prison, but anything that goes beyond this is voluntary submission to an unnecessary tyranny, and is likely to interfere with happiness in all kinds of ways. – Bertrand Russell, Conquest of Happiness (1930) ch. 9

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Science has its own, bigger Bernie Madoff

June 9th, 2009

Interviewing by Frontline suggests similarities with Tiny Tony (Anthony Fauci) of NIAID, who is more lethal

Pseudo religious impulse is source of sway of swindlers large and small, preventing questions

Billion dollar bricks sold to the public by those in the know in HIV/AIDS

The key lesson for whistleblowers in science in all this? Good luck!

(WARNING: LONG POST. EXPAND FONT TO LARGE SIZE AND ASSEMBLE 100 MULES AND BEARERS)

Book vs cover: Who wouldn't trust this man and wife team?  With Madoff (pron. Madeoff) languishing in jail awaiting delayed sentence at the end of June (June 29, 10 am), the PBS Frontline program on Bernie Madoff of May 12 (repeated June 2) recently offered an hour filled with witnesses of the way the discreet Jewish swindler worked his game, with key feeders insisting they were as surprised by the scam as the more than 9000 victims who have now filed claims (move cursor over pic for caption).

This may strike some viewers as incredible, given that Bernie and his operation had fake written all over them for years in neon signs. Yet it does seem that the only ones who wised up to his Ponzi play before the Fall were Harry Markopolos, now famous as the whistleblower whose thoroughly demonstrated tip offs were ignored by the sleepy watchdogs of the SEC, the reporters at MAR/Hedge and Barrons who wrote skeptical articles as early as 2001, and some professional investors with operating neurons who recognized that Madoff’s unwillingness/inability to explain his mathematically impossible feat was a blazing sign of wrongdoing in itself.

High priests don’t get questioned

2005: Michael Bienes and his wife of 32 years, DianneEven the reporters with those excellent early pieces didn’t quite convince themselves that massive skulduggery was afoot, it seems. So the question becomes, why not? Why did so many of the financial elite blindly trust Madoff to such an extraordinary high level – not just his unfortunate investors but even his original ‘feeders’? The first answer seems to be that the world of financial formulae was all mumbo jumbo to them. Frontline asks one early feeder, Michael Bienes, who is a trained accountant, albeit clearly not a very bright one, why he believed that his great benefactor was a genius not a crook:

“I don’t know. How do I know? How do you split an atom? I know that you can split them; I don’t know how you do it. How does an airplane fly? I don’t ask..”

Did you ask him?

Never. Why would I ask him? I wouldn’t understand it if he explained it. Something with arbitrage between bonds and stocks and blah, blah, blah, blah, blah.

But when I went downtown for the first time to deliver some papers to Bernie, … he walked in, Bernie, and it was like you were subsumed by him. He had an aura about him. Not charisma, an aura about him — a confidence the way he was set up, the way he looked, the way he spoke. The self-confidence — he just evoked confidence in you, that he knew that he was in control, and if he was around, everything was fine. And then when he moved to his new office building, I used to go down there, One Wall Street. He had a whole floor. Wow. Wow. Wow.
(see Michael Bienes’s extended Frontline video interview clips at PBS)

In other wprds Bernie was a high priest of an arcane science that the congregation didn’t understand, a miracle worker that people wanted to believe in, and given the trappings, they did. Here we have the religious or general social phenomenon, which like compound interest feeds upon itself. Success begets success, and trust fosters trust in ever widening circles. The more people believe, the more people believe.

In Wall Street or politics, religion or science, generally once a person climbs high enough in any organized human ideological system (in this case the gimme Wall Street of stock and bond market traders and their institutions) he/she enjoys not just the trust and confidence of those close to him, but soon enough, like any successful leader, the blind faith and imposed devotion of his or her followers.

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Congress says they’re looking into the Bernie Madoff scandal. So the guy who made $50 billion disappear, is being investigated by the people who made $750 billion disappear! (ICIS Chemicals Confidential)
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While few if any know what he is actually up to, no one risks questioning the great man. The pseudo-religious impulse of blind faith kicks in and there is a sort of billowing group trust in something that may make no sense at all, if questioned. (Which phenomenon is precisely why this blog exists, by the way – to counter in some small way that unprofessional impulse in HIV/AIDS and wherever else it enters into science, or any other social system of money, power and ideas, where it has no business being present, but is often found, abetting mis-leadership and tyranny.)

The skulduggery is perceived unconsciously and it is secular religion that enables denial. Thus Bienes, one of Madoff’s core feeders admits he did nothing much to earn his millions:

Q. So is this easy money, would you say, that you’re making with Madoff?
A. “Easy, easy-peasy, like a money machine. I always said I never lifted any heavy weights. People have said to me, even recently, “Oh, you must have worked very hard.” I said, “No, I didn’t.” “Oh, come on.” I said, “No, I didn’t.” I never worked hard, except when I was working as an accountant when I was young, yeah. But I never worked hard.”

And when pressed whether he ever questioned how he deserved millions just for passing money along to Bernie, he answers:

“I asked myself Why am I so lucky? My wife and I came up with the answer. God wanted us to have this, God gave us this.”

So the money was manna from heaven, with a semi divine Bernie as the angel Gabriel, a heavenly servant of Destiny for those lucky enough to be chosen, and no need to ask any further questions.

Which is the key: no questions can be asked of Heaven. Self deception and denial are at work, and trust and fear gell into the rationalizing belief that divine providence is at work. Any strong leader (eg Obama, see our last worshipful post on our Presidential Savior) engenders and benefits from this psychology, although if death is involved, there is more of it. Stalin was able to order the deaths of tens of millions, including his close supporters, and still die in bed. The characteristic of the pseudo-religious impulse in operation in society is that no one retains the ability or desire to question. The religious guru benefits from the unquestioning faith of his flock, even while he is handing them Kool Aid.

Three bricks at $150? Sold!

But there is no reason to plumb the psychology too deeply. The balance of trust and fear is the core of any successful confidence trick. This is the combination that casts the spell. Thus the New York street trickster perpetrates similar magic when he sells a sealed parcel containing three bricks to a passer by. We know one victim of this familiar scam whose very profession as a print reporter was to ask questions, yet in barely three minutes in a chance encounter he was persuaded to hand $150 to a stranger for a sealed parcel assumed to contain a “brand new VCR”. The embarrassed sucker could only report that the magic spell broke the moment the seller disappeared, after counting the cash and exchanging thanks. Only then did he, the professional reporter, rapidly place the parcel on a car roof and tear it open to see what it really contained: three bricks.

The conman as social engineer

Few of those caught in the $50-65 billion Bernie Madoff collapse asked any questions, Frontline made clear. If anyone did ask questions, Bernie acted offended at the very thought of their distrust and brusquely told them that if they felt that way he would return their money. Here again we have the conman as social engineer, fleecing the victim by dangling the carrot while making it impossible to question the price that has to be paid without breaking the social contract of mutual trust, and risk expulsion from the club.

Madoff’s resistance to questioning actually did tip some people off, it turns out. We know of a certain Bob who was one of the ten founding members of a club in the Hamptons, and an experienced businessman. Bernie was another founding member and one day approached him with an offer to let him in on his fund, saying that not much needed to start, $5 million would do to give him a taste. So Bob then reasonably asked Bernie to tell him a little about his operation. As Madoff talked Bob thought to himself, “this is not adding up.” He asked another question, and at this point Bernie backed off, saying, “You know what Bob, this is not for you!” and walked off.

But most people didn’t challenge Madoff, perhaps because added to the prospect of mutual rejection of a fellow member of the club there was also the general rejection one risked by questioning a man everyone else in one’s social circle, congregation, club or on Wall Street trusted so implicitly. At the time Barrons investigated him in 2001 Madoff was a grand old man of NASDAQ who had climbed into many high chairs over the years, including Jewish groups, charities, universities, advisory committees, and so on. In this way he acquired vast social sanction, which preserved him from official investigation even when the evidence that something was wrong was blatant and exposed to the SEC repeatedly.

(From the Wiki entry url above): Madoff was a philanthropist, who served on boards of nonprofit institutions, many of which entrusted his firm with their endowments.[13][15] He is a former National Treasurer of the American Jewish Congress. The collapse and freeze of his personal assets and that of his firm’s have had repercussions on businesses, charities and foundations around-the-world, including the Robert I. Lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation which were forced to close as a consequence.[13][31] Madoff donated approximately $6 million to lymphoma research after his son Andrew was diagnosed.[32]
Madoff served as the Chairman of the Board of Directors of the Sy Syms School of Business at Yeshiva University, and as Treasurer of its Board of Trustees.[15] He resigned his position at Yeshiva University after his arrest.[31] Madoff also served on the Board of New York City Center, a member of New York City’s Cultural Institutions Group (CIG).[33] He served on the executive council of the Wall Street division of the UJA Foundation of New York which declined to invest funds with him due to the conflict of interest.[34] Madoff undertook charity work for the Gift of Life Bone Marrow Foundation and also engaged in philanthropic giving through The Madoff Family Foundation, a $19 million private foundation, which he managed along with his wife.[13] They donated money to hospitals and theaters.[15]

In retrospect this was all camouflage but the bright lights from his medals blinded those in the socio-economic system in which Madoff moved, including the watchdogs at the SEC and in the media. Maybe we should be more skeptical of generosity in this day and age. Could be that some of it is cloaking theft. More to the point, let’s be suspicious of group wisdom, especially when it acquires a religious fervor. In the grand tradition of the Roman Catholic church, religion has been the cloak for gain throughout history. The religious impulse can have the same usefulness in war and secular politics, as Bob Dylan sang:

“The First World War, boys,
It came and it went;
The reason for fighting
I never did get.
But I learned to accept it,
Accept it with pride;
For you don’t count the dead
When God’s on your side.

“The Second World War, boys,
It came to an end.
We forgave the Germans,
And then we were friends.
Though they murdered six million,
In the ovens they fried,
The Germans now, too, have
God on their side.”
(Bob Dylan, “With God on Our Side”)

Science’s very own Bernie Madoff clone

Why are we emphasizing all this at great and even repetitive length? Because we want to suggest that the same process can be discerned in some scientific fields, where conventional belief has been demolished in the journal literature but is nonetheless propped up far past its shelf date by those high up who benefit from it, and the weapons they use to impose belief are the same as any acquisitive church. Among known examples are the reigning paradigms in cancer and in HIV/AIDS.

In HIV/AIDS in particular, the Madoff pattern of trusted high level figure who misleads strangers into ruining their lives on his advice – and don’t ask questions on pain of professional or even personal death – is exemplified by the short but remarkable Anthony Fauci, director of NIAID. Yes, sir. We’d say Fauci is chiefly responsible for the successful defense of the HIV theory of the cause of AIDS against all comers for over 22 years, even though his own writings in the literature show us that he now knows very well the HIV=AIDS hypothesis had nothing to recommend it in 1984 and even less since.

The grandson of Sicilian immigrants, Fauci grew up in the Bensonhurst section of Brooklyn. He credits his father, a pharmacist, and particularly his mother, who died when he was in medical school, for encouraging him to strive for excellence. The thirst for intellectual achievement was fueled by his Jesuit teachers at Regis High School, where he was captain of the basketball team, and later at Holy Cross College, where he learned—as he puts it—“precision of thought and economy of expression.”

The Jesuit order of the Roman Catholic Church “is driven by intellectual curiosity—rigorous academic pursuits, openness and honesty without having any intellectual constraints put on you,” Fauci explains. The training prepared him well for life in Washington, where “you only have a very short time to express what it is that you need to express (and) to make it very, very clear,” he says.

Medicine was a natural career path for Fauci, as it balanced his love of science with his need to be involved with people. He attended Cornell University Medical College (now the Weill Medical College of Cornell University), and as a young resident there, already was displaying strong leadership skills.

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SIDENOTE FOR NEWBIES
As all long time readers here know well from our posts, and as we incessantly repeat for the benefit of newcomers, the theory that AIDS is caused by a virus and that it is infectious has been thoroughly demolished in the best scientific journals since 1987, and by all the accumulating evidence since, and this is obvious to anyone who takes off the distorting spectacles of the standard trope and looks into it with clear gaze. But the strenuous efforts of those who benefit from this belief have managed to sweep the correction under the carpet, while they pretend it is refuted, and marginalize the reviewers, especially the exceptionally brilliant Berkeley scientist Peter Duesberg, who within two years (1987 on) wrote the major reviews concluding that the claim was impossible.

So contrary to the best science the prevailing belief of almost everybody around the globe is still, after all these years, that AIDS is caused by an infectious virus, labeled self servingly as Human Immunodeficiency Virus, or HIV. On this basis billions have been spent, and $55 billion more will now be dispensed by PEPFAR as the national budget permits, not to mention many other billions by those who believe they are helping supposed AIDS patients by ensuring they are fully supplied with the damaging drugs prescribed.

The kingpin of this intellectual and social scheme, perpetrator of one of the greatest scams of medical science ever, is none other than Anthony Fauci, director of NIAID for over twenty years.
END SIDENOTE

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Meet Dr. Fauci, the man of science who would curb free speech

Yes, despite his fine upbringing and avowals, we are sorry to say that this notoriously dapper modern bureaucratic medicine man has been the chief enabler of the ongoing survival of the unlikely, and still entirely undemonstrated, belief that HIV=AIDS, and its adamant protector from independent review, ever since his not too subtle edict in print twenty years ago, in an AAAS newsletter, to the effect that any reporter who asked him or anyone else at the NIH why the high level reviews rejecting the AIDS paradigm were being ignored in public would be counted incompetent, and never again receive any call back from him, his PR staff or any scientist under his sway.

No questions, in other words.

The net result has been that the funding and social politics of AIDS, which by 1987 had already turned the HIV claim into a belief supported with religious fervor by gays, who have always comprised the overwhelming share of victims in the US, but who are terrified of being blamed for it as a consequence of their “life style”, have relegated any questioner lay or scientific to social and professional Siberia.

HIV=AIDS is now a religion, in other words, in which questioning of the dogma is ruled out on penalty of excommunication, whether you are in the media, in medicine, in science or in the public at large. This religion has been successfully led by the suppressive Fauci for twenty years, with the cooperation of Robert Gallo and other top AIDS researchers, and senior scientific statesmen such as David Baltimore and Harold Varmus.

The many people – several thousand at least – who oppose the standard thinking on HIV/AIDS, who include over thirty authors who have written good and sometimes brilliant books on the topic, as well as the best scientist in the field, Peter Duesberg of Berkeley, are left in the position of Harry Markopolos, the man now famous for questioning Bernie Madoff and trying to bring the attention of the authorities to his crime in vain.

In other words, they are ignored and brushed off, or in the case of the scientifically qualified HIV critics, smeared, attacked as heretics dangerous to the body politic and the health of the believers, marginalized and ostracised.

A classic case of this political counter attack is the fate of Celia Farber, the exemplary investigative journalist and poetic writer of our last post, who even after publishing an excruciatingly well fact checked article in the leading liberal magazine, Harpers, three years ago, was not even then able to win the respect she deserves, such was the counter attack from the paradigm leaders, who like threatened octopuses filled the water with ink to obscure the truth.

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The Obama Administration rolled out its much-awaited foreclosure-prevention plan on Wednesday nicknamed “The Ponzi Policy”, saying if it could work for Bernie Madoff, it could work for the United States. The plan asks those facing foreclosure to simply send a cheque for a thousand dollars to the first name on the list, “Fannie Mae”, then place their name at the bottom of the list, and ask 275 million friends to do the same. (ICIS Chemicals Confidential)
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Actually, the more apt analogy is to say that the scientific and lay defenders of HIV=AIDS behave like skunks, who when kicked emit a stink so unpleasant that one leaves them alone rather than continue to try and cage them and transport them somewhere where they can do no damage, such as the federal jails where they deserve to be for robbing the public purse to support their personal religion, and endangering the health of gays and Africans in the process.

Those who wish to catch up with Celia Farber’s story can read other posts in this blog, starting with the latest one below, and the excellent article in Harpers which failed to win the Pulitzer it deserved. For our point here is simply this. Bernie Madoff may have achieved lasting fame by perpetrating the biggest ripoff in the history of Wall Street Ponzi schemes, but in science we have our own Bernie Madoff, and he is still going strong, and the billions in spending from the public purse that he has misdirected now amount to far more than the billions involved in the better known Bernie Madoff’s scheme, which are probably as low as $20 billion.

Why Fauci’s scheme won’t implode like Madoff’s

But surely, you may say, Anthony Fauci won’t survive very long with so many critics (see the “Accurate/Helpful” section of the blogroll on the right hand side of this blog for thousands of them) and a new President whose budget is so strained now that the White House talks up a saving of $20 billion? If $50 or $100 billion is to be misdirected by the officials who run PEPFAR and other HIV/AIDS programs, surely Mr Obama will be alerted, intervene and order an investigative review?

Sadly, we don’t think so. Take the wave of propaganda the paradigm enjoyed a recent weekend on CSPAN. Not only did Luc Montagnier visit the University of Maryland and appear with Bob Gallo at a seminar, but at that seminar it became clear that the recent award of the Nobel to Luc for discovering the supposed cause of AIDS, HIV, has had the predicted effect of at long last getting the Pasteur hero aboard the bandwagon, and he never will again suggest as he has so often that HIV is insufficient to cause AIDS, that you need a co factor, and that by itself HIV is easily dispensed with by any healthy human immune system.

Added to this revelation was the appearance on CSpan as well of Harold Varmus, once director of the NIH and now atop the highest perch at Cornell Medical Center here in New York. Harold and his life time mustache happily discussed his great career in the charming terms for which he is renowned, once again reminding us that he is the most agreeable man in science. He also said that when he was given the role of deciding the name for the new virus, and decided it would be Human Immunodeficiency Virus, thus ending all discussion about its role, this was a great triumph of nomenclature which was, he said, his first exposure to the politics of science. Reaping his reward for mastering that skill set, Harold is now the chief science adviser to Obama.

Harold Varmus likes boats and bicycles, and won a Nobel from his friends on a basis which Peter Duesberg had demonstrated led cancer research up the garden path for thirty yearsAll this was part of the theme of his CSPAN Q and A, which was the content of his new book, The Art and Politics of Science, as well as his new position at the right hand of the new president of the United States. To those au fait with the internal politics of this issue, it was all once again a reminder that the chances of the Champion of Change in the White House sniffing enough of the malodorous politics of HIV/AIDS science to order a review seem somewhat low, to say the least. Harold Varmus is another highly trusted figure at the top of science:

[A] unique work by a remarkable global leader: a brilliant scientist with the sensibilities of an artist and the leadership skills of a consummate politician. Harold Varmus has done it all—Nobel Prize–winning breakthroughs in cancer biology, masterful leadership of the National Institutes of Health (NIH) during its period of greatest expansion, statesmanship of the highest order in global health, and cheerful trench warfare to bring biomedical publications to the open-source Internet age. [This] book is captivating, fascinating, and ever instructive. It will be read the world over with enormous delight and benefit. (Jeffrey D. Sachs, director, The Earth Institute)

Where can activists turn in trying to get past this palace guardian of ruling wisdom in HIV/AIDS? Once again we at Science Guardian offer the not necessarily facetious suggestion that if anyone can manage to run into Michelle Obama and turn her on to this betrayal of science, sense and humanity, which has a particular relevance to the community in which she is rooted, the black community of America, perhaps they should try to tip her off discreetly to the necessity of reading a good book on the topic, now that there are over thirty (see blogroll on right) for her staff to choose from, including ones by for example Celia Farber and Christine Maggiore, that anyone can follow.

Of course the problem then becomes which book, and sadly we have to say that in our opinion that no one has written the right book yet. For that book would be have to a direct answer to Randy Shilts’ uninformed best seller, And the Band Played On, written by an author that died of his ignorance (we did warn him). It would describe not the fanciful bill of goods Shilts was sold, poor fellow, back in the early days of the supposed pandemic, but the realpolitik of HIV/AIDS, and why and how so much damage has been done and so many lives lost under a pseudo-religious belief that without the ministrations of its bureaucratic high priest, the fine-suited Anthony Fauci, would have been demolished by the brilliant commentary by Duesberg that thoroughly scotched it 22 years ago, and since.

Of course, the only reason Madoff’s castle in the sky came crashing down at last was simply that in the serious recession people needed to pull their money out rather than get by on the handsome dividends Madoff was paying out. In the case of HIV/AIDS the meltdown seems to make it less likely that Obama will play the white knight, since the AIDS money at stake is nothing compared to a total Wall Street and Main Street bailout now estimated at $13 trillion.

In such circumstances, what’s a $100 billion here or there?

Madoff wasn’t so bad – in comparison

How do Madoff and Fauci compare? One point in Bernie’s defense that no one seems to be making is that, for all the calumny that has been heaped upon his head, Madoff didn’t actually steal $65 billion, or $20 billion, or maybe even $2 billion, at least for himself. For a Ponzi scheme by definition is robbing Peter to pay Paul, not oneself, except for what one skims. You take the money that comes in from new suckers and pay it out in generous annual percentages – in this case 18 or 16 or 14 per cent – to all the old suckers, and the new.

Why the heck didn't I jump ship and hole up in Latin America?  Those that rode with him for years did very well indeed, making far more than they “lost” when it finally exploded. For example, we have the sad tale in Time of How I Got Screwed by Bernie Madoff:

All we knew was that my wife’s entire family had been in the fund for decades and lived well on the returns, which ranged from 15% to 22%….My wife’s family’s combined losses are close to $30 million.”

Decades of 15-22% returns on $30 million? Depending on how much was left in, a net gain of probably well over a hundred million, not much to complain about – unless you are the later investor whose money was transferred to this happy family.

Waiting for the clawback

Given that legally when a Ponzi scheme collapses, all participants are called upon to return all that they have ever withdrawn from the fund, in what is known as a “clawback”, a pile of money should in theory be reclaimed from all the funds and people that Madoff had paid out the :interest” to over the years. That will all be put into a pot, and shared out among the 9000 or so investors according to what they put in,

If this entire process is done thoroughly and perfectly, going all the way back to the beginning in 1959 or whenever Madoff began the process, everyone would be made whole, at least as far as their initial investment is concerned. They will miss out on the interest they would have been earned over the years from some other investment, of course, which could be sizable. That loss, and whatever Bernie took out over the years to support his company – which ran into trouble in some years, and only survived on this theft, according to the prosecutor – or to spend on houses and other possessions, including a nice Aston Martin, would be the total missing. The family seems to have done most of the living it up, though their circumstances have changed rather dramatically now. His sister is driving an airport taxi, reportedly. Attempts to secrete some of the loot were noticeably late, and at least some were blocked.

Madoff the conservative (non)investor

It appears, however, that Madoff did not ever invest any of it in stocks and therefore lost nothing in the market. Moreover, his possessions – $11 million Palm Beach mansion, $2.2 million 55-ft yacht “Bull”, 24 ft motor boat etc – have been seized by the authorities and as much as $1 billion or so may be realized by their sale, possibly not a great deal less than he took from the monies entrusted to him.

So is Bernie the vast villain that so many feel he is, ruining so many people? Perhaps not, or he wouldn’t be if the clawback is done fully. However, there are indications that many of those who took money back from Bernie are going to conceal the fact if they can, rather than allow it to be clawed back. Moreover the clawback is not going to go very far into the past, it is clear from news reports. So perhaps the small investors will never get much back, although many will be paid something from the insurance fund and be allowed to take taxes off their income, if they have any left. The outcome remains to be seen. But they should realize that most of their their money isn’t in Madoff’s pockets, but in the bank accounts of their fellow investors, who are busy trying to conceal the fact.
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“It looks like more than 13,000 people were caught up in that Bernard Madoff Ponzi scheme. You know what a Ponzi scheme is? That’s where you throw good money after bad, or as the government calls it, a stimulus package.” — Jay Leno
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The big problem, in other words, comes from the longevity of the Madoff scheme, which prevents a full clawback. One wonders if Madoff ever expected it to last so long. Perhaps he imagined that he would be able to escape the trap if his business made enough money. Of course he should have cut it short. But since prison loomed for a certainty if he did so, he was forced to continue year by year. It is hard to imagine that Madoff ever contemplated a number as high as $65 billion, but it must have had its own momentum from which he could not escape.

Why Fauci cannot escape his own trap either

A similar process has taken place in HIV/AIDS. Every year that passed without review and reform, the greater the difficulty of reversing course. It is now virtually insurmountable. The number of pages of Nature and Science, not to mention the New York Times, that would have to be torn out, the reputations destroyed, possibly even a mountain of legal suits for sickness and death, now render it virtually inconceivable that this globally metastasized tumor will be torn from the body politic in the current generation, of ever.

Again, it is hard to believe that Madoff could manage to run the operation without a lot of knowing office and backroom help. Similarly, it is impossible to believe that those who help Fauci maintain the impossible paradigm in HIV/AIDS against review don’t know they are wrong to do so. If the snappiest dresser in NIAID is ever brought to the witness chair, it should be in the company of all the clever scientists who by their own writings demonstrably are aware of the complete absence of theoretical foundation for their well funded research.

So perhaps until all the facts are in and who did what and participated in what and where all the money is and how much is clawed back and returned to investors, one should hold off from totally vilifying the genial, treacherous but really not so gigantic Bernie, who may have done little more in his distasteful crime than transfer savings from one acquisitive group to another, using a relatively small portion for himself. For this he became his own first and last victim, and given the largely empty satisfactions of riches in New York, those he personally betrayed in this sickening manner can be sure he is sorry he ever made such a bargain with the Devil, now that he will endure what in most ways is the worst punishment of all, life in a cell the size of his one of wife’s clothes cupboards.

Who is the bigger snake?

We are merely suggesting a little perspective, however big a snake Madoff was on the personal level. After all, from society’s point of view he did not threaten the health and lives of millions, as Anthony Fauci has. Furthermore, Madoff is far from the only untrustworthy money manager on Wall Street. Indeed from some points of view it is difficult to distinguish his behavior from those who knowingly sold toxic assets, or the speedy pocketing of the public’s cash by the managers of some of the biggest banks in recent months, in which there seems to be plenty of sleight of hand quicker than the eye can see, facilitated by the lack of overview.

In fact,, if you accept that the Wall Street wizards and institutions who traded and insured worthless assets are responsible for the global crisis, then according to the World Bank they are responsible for 100-150 million people falling into poverty, not just 9000 investors, and 200,000 to 400,000 infant deaths this year.

So is Bernie really in the world league of bad guys? Here’s some food for thought along those lines: What Makes Bernie Madoff Tick – Insights from the Criminal Mind of Sammy Antar. But Madoff’s smirk always suggested to us not arrogant psychopathy but a small time Wall Street thieving insider caught in his own trap, who knew he would be exposed one day and was probably surprised it didn’t happen earlier, and also that he had company in his moral quagmire, for whom he was taking the fall.

However, all those who wish Madoff everlasting purgatory can contemplate his fate as predicted in Inside Bernie Madoff’s New Home… for the Next 150 Years. Sentencing is now set for the end of this month, and currently predicted at 150 years incarceration for Madoff, who is 71 years old. We wonder how long he will survive such cramped quarters.

A system always ignores warning signals from outsiders

But what’s the take home lesson in all this for public policymakers? We think the important public lesson of the Madoff thievery is the way whistleblowers are resolutely ignored if the system they inhabit is large enough, and their targets high enough, even when everybody knows that by nature money trumps everything for many players in the game, and if they troubled to read the whistleblower file properly they would easily have seen that something was very wrong.

Markopolos and others saw what was up, once they studied and analyzed the data available on Bernie’s operation. Markopolos went to the SEC and it is now notorious how his fully explanatory memos were ignored year after year:

SANBORN, N.Y. (March 12, 2009) — Harry Markopolos, a 30-year veteran of the financial industry and Bernie Madoff whistleblower, will discuss “Blowing the Whistle on Bernie Madoff: Gift Wrapping & Delivering the Truth about the Largest Ponzi Scheme Ever” at Niagara County Community College April 21 at 12:30 p.m. in the Arts and Media Theatre on the Sanborn campus. Admission is free and open to the public and is sponsored by Niagara County Community College Student Government.

Markopolos blew the whistle on Madoff and his $50 billion Ponzi scheme, unearthing what is believed to be the largest financial fraud in history.

For over 10 years, Markopolos, a Chartered Financial Analyst (CFA) and Certified Fraud Examiner (CFE), diligently pursued the truth in the numbers of Madoff and his unbelievably huge profits. Figuring out the Madoff fraud before anyone else, Markopolos waved red flags and delivered detailed documentation to the Securities and Exchange Commission (SEC) in 2000, 2001, 2005, 2007 and again in 2008.

“It took me five minutes to know that it was a fraud. It took me another almost four hours of mathematical modeling to prove that it was a fraud,” Markopolos said.

(From his written testimony):
“I studied the Broyhill document and within 5 minutes suspected it was a fraud since the strategy as described was not capable of beating the typical percent return on US Treasury Bills less fees and expenses. Once fees and expenses were included, the Split-Strike Conversion Strategy as depicted in the marketing document would have had trouble beating a 0% return…

BM said he was earning 82% of the S&P 500’s return with less than 22% of the risk. More alarmingly, his returns only had a 6% correlation to the S&P 500 Stock Index when I would have expected to see something like a 50% correlation and wouldn’t have questioned any correlation figures between 30% – 60%. A 6% correlation was so low as to signal “FRAUD” in flashing red letters. The easiest explanation for why a 6% correlation is so low as to be wholly unbelievable is that if your returns are coming from the S&P 100 stock index, you had better at least partially resemble that stock index’s performance. Having only a 6% resemblance in a situation where, due to the price limiting performance of the put and call options, one would expect a 30 – 60% correlation, was outside the bounds of rationality.”

The difference in HIV/AIDS is that the whistleblower was Peter Duesberg, the best scientist in the field, and the watchdog was Anthony Fauci, whose political interest was in preserving a paradigm that had already elevated his career to the White House level.

All observers of the scene in AIDS and its science are familiar with this phenomenon and the way the established system suppresses any critique that threatens its rulers. An example which is more widely appreciated and accepted, however, is the resistance in NASA to explicit warnings from its own engineers that small pieces of the shuttle might fail and cause disaster for Challenger and Columbia.

The Challenger explosion revealed a culture where not only was the lethal disaster foreseen by engineers but the head of the investigating commission, Bill Rogers, pressured the panel not to detract from NASA’s reputation by revealing management problems. It was left to the totally independent minded physicist Richard Feynman to ignore politics and demonstrate on a table top with a glass of iced water how an O ring must have failed.

More broadly, the report also considered the contributing causes of the accident. Most salient was the failure of both NASA and its contractor, Morton Thiokol, to respond adequately to the design flaw. The Commission found that as early as 1977, NASA managers had not only known about the flawed O-ring, but that it had the potential for catastrophe. This led the Rogers Commission to conclude that the Challenger disaster was “an accident rooted in history.” (Rogers Commission, Wiki)

Hello, can anybody hear us?

In other words, there is systematic deafness to whistleblowers. This is the true lesson of Madoff and Duesberg both. Those in high positions in any social system will easily defeat any internal or outside attempt to bring correction to bear. Even the relatively investigative editors of the Wall Street Journal fell under this spell of reputation in Madoff’s case, as Markopolos informed us in his House testimony:

[Pat Burns, communications director at Taxpayers Against Fraud] put me in contact with John Wilke, senior investigative reporter for the Wall Street Journal’s Washington bureau. Mr. Wilke and I would become friends over the next three years. Unfortunately, as eager as Mr. Wilke was to investigate the Madoff story, it appears that the Wall Street Journal’s editors never gave him approval to start investigating. As you will see from my extensive e-mail correspondence with him over the next several months, there were several points in time in which he was getting ready to book air travel to start the story and then would get called off at the last minute. I never determined if the senior editors at the Wall Street Journal failed to authorize this investigation.

In his appearance Markopolos added that “I believe that senior editors of the Journal respected and feared Mr. Madoff” and wouldn’t let a reporter “get on the plane” and meet with him on the fraud.

The ineffectuality of whistleblowers

All those interested in repressed reform in science should be aware that whistleblowing of any kind faces this kind of handicap wherever it is attempted. Only if there is intense media coverage, or committed support from people of influence, does it have a chance of success. The Madoff scam was exposed only because it blew up in the fear and panic of the recession. The Fauci scam does not have the same internal time bomb, short of the death of its main players.

Individual whistleblowers have proved ineffective so far, despite impeccable scientific credentials (Duesberg), peer reviewed publication in the leading journals (Duesberg with others), established academic positions (Duesberg, Lang) and membership of the National Academy (Duesberg, Lang), very good books (Bialy, Bauer and more than thirty academic, professional, journalistic and lay authors), blogs (Bialy, Liversidge), websites (see blogroll on the right), and highly competent magazine articles (Discover, SPIN, London Sunday Times, and innumerable others, see blogroll), and groups (Rethinking AIDS, HEAL) have likewise made no significant progress.

The one glimmer of hope might be that if Fauci retires, the discussion over his replacement might trigger a review by the White House, and just perhaps open the door to some adjustment. But after 22 years wholesale replacement of HIV in AIDS science and policy now seems socially impossible without a political earthquake of some kind.

Time killed reform in AIDS, as in Madoff

In 1987 and 1988, however, this wasn’t the case, and for a short time the discussion was lively, and it seemed that only the naive would credit the brazen reassurances of Anthony Fauci and the other top scientists in the field that the distinguished, honest and highly critical reviewer of their favorite hypothesis, Peter Duesberg of Berkeley, and his endless expert peer reviewed critiques in the leading journals were wrong in the face of “overwhelming evidence” that HIV is the cause of AIDS, evidence that no one cared to parade in the same journals in direct answer to Duesberg.

For anyone familiar with Duesberg’s papers, the reverse was and still is obviously true. The claim that HIV causes AIDS was and is simply wishful thinking from those that knew to exploit a belief which turned on the spigot of federal funding to a level no one had imagined.

But Anthony Fauci in combination with Robert Gallo led the powerfully effective political suppression of Peter Duesberg’s clear explanations of why, according to its own findings, the paradigm was faulty. The media came to heel, impotent in the face of expertise that exceeded reporters time and attention span. And the media are now key, as Fauci has shown, to maintaining nonsense in place at the policy making level. If whistleblowers can’t win wholesale media support, they are done for. Neither Markopolos or Duesberg did.

That over two decades this carbuncle on the nose of science grew to become the cancerous football sized lymphoma that cannot be surgically removed without killing the patient dead is more than anyone else the fault of Anthony Fauci, director of NIAID and the man who, it turns out, is willing to sacrifice the health and lives of gays and Africans so that he can buy expensive suits.

Wait! How can an outsider credit such a lurid statement about a man widely respected by everybody from Ronald Reagan, who called him a hero, to Charlie Rose, who interviews him worshipfully whenever AIDS or flu is the topic?

Short of asking them to actually read some of this blog and the literature of the scandal written by over thirty authors from Harvey Bialy, Henry Bauer and Peter Duesberg to Celia Farber and Christine Maggiore (please see the blogroll on the lower right of the front page, the section entitled Accurate/Helpful), all we can say is this:

The wholesale evasion of Duesberg’s critique is the best evidence in terms of human behavior that he is correct, just as Madoff’s black box unwillingness to reveal his investing secret screamed silently at one and all that he was running a Ponzi.

Updates: June 26 Fri:Updates: ABC talks to Bernie’s secretary, who says his little black book contains co-conspirators and sexual masseuses. One principle noted: antisocial personalities tend to be control freaks.


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