Bernard Madoff's Alter-Ego... Francisco d’Anconia?

Does Bernard Madoff have an alter-ego?

November 24, 2009

The question has become relevant in the wake of Madoff's Ponzi Scheme, which defrauded billions from investors. He was recently sentenced to 150 years in prison for his massive scheme which took money from new investors to pay old ones while no actual investments were being made. The scheme deployed elaborate accounting software that created false records that helped Madoff evade authorities for years.

Madoff was caught, and pleaded guilty to defrauding investors. The scheme was responsible for countless people being hosed while Madoff made out with all the profits. A few former invetors have committed suicide, and some of those who helped conceal the scam are still being prosecuted.

Bernard Madoff As I sit by and watch another fierce government debate unfold over how much more of private citizens' money the government will spend, on whom, for what purpose and from whom will they take it, I cannot help but wonder Madoff's motives. Is it possible that Madoff had motives beyond greed --- the pure, unbridled form that knows no conscience? It seems that a life-sentence is a pretty steep price to pay for any potential amount of money. Could he really be so smart, yet so stupid? Or did Bernie Madoff have another motive altogether?

As I sit and ponder the question, I cannot help but notice a feeling of deja vu coming over me as I scan through various scenarios and possible motives. I wonder what could have possessed a man with such an advanced understanding and knack for savvy investing to create an investment worth absolutely nothing and get rich off of uninformed investors who entrusted Madoff with their money based solely on his advanced understanding of Wall Street, the markets and investing in general.

All of Madoff's clients shared that much in common --- they simply figured that Madoff "knew how to make money" and had a record to prove it. None of his investors actually knew what they were investing in or how it was purported to work. The reality is that few if any of them even bothered to question Madoff's motives until after their investments had gone sour.

I ask myself, "where have I heard this before?"

Then, as I am reading a story about the Venezuelan government seizing four private banks in the latest in a series of nationalizations, suddenly it hits me like and NFL linebacker blitzing up the middle --- Bernard Madoff is the real-life Francisco d'Anconia!

WTF? Who's that?

Perhaps the better question is "Could it be?"

Madoff as the protagonist?

“Dagny, don’t be astonished by anything I do,” he said, “or by anything I may ever do in the future.”

Most people with any degree of familiarity with the situation regard Madoff as being about as evil as the Bilblical Judas, perhaps a little more so, and only slightly less evil than Satan himself. After all, money is "the root of all evil", right? Madoff destroyed livelihoods in pursuit of more of this evil greed-potion, right? The guy is evil, right?

Or, could it be possible that as opposed to merely being one to do the devil's bidding, Madoff's motive was something akin to "tearing the roof off of hell" so that men may look inside and see the horror first-hand?

Dagny enters Francisco’s hotel room to see him privately for the first time in twelve years. “Hi, Slug!” She answers irresistibly, helplessly, happily, “Hi, Frisco!” Then she continues — “I came here to ask you a question. … When you told those reporters that you came to New York to witness the farce, which farce did you mean?”

Francisco Domingo Carlos Andres Sebastian d'Anconia is the character from Ayn Rand's "Atlas Shrugged" who among other things, was known for his savvy investments and his great money-making abilities. He pilfered many a wealthy customer by persuading them to invest into the San Sebastian Mines, a copper mining project in Mexico named for one of his Spanish ancestors. The Mexican government nationalizes the mine, only to find it completely devoid of copper and anything else of value when they seize it.

San Sebastian Mines is a copper mining project in Mexico founded by Francisco d'Anconia and named after his ancestor Sebastian d'Anconia. Francisco's reputation as a businessman is so great that investors flock to him, begging to invest money in the enterprise. Investors include James Taggart and Orren Boyle. Taggart goes so far as to build a new branch of Taggart Transcontinental, the San Sebastian Line, to serve the mines, sinking $30 million into the project. When the development of the mines appears complete, the Mexican government nationalizes them as well as the San Sebastian Line, only to discover there is no copper and there never was.
(Source: http://www.spiritus-temporis.com/things-in-atlas-shrugged/san-sebastian-mines.html)

Before you stop reading and write this off as the ultimate attempt at playing devil's advocate (no pun intended), consider the following passage:

Dagny enters Francisco’s hotel room to see him privately for the first time in twelve years. “Hi, Slug!” She answers irresistibly, helplessly, happily, “Hi, Frisco!” Then she continues — “I came here to ask you a question. … When you told those reporters that you came to New York to witness the farce, which farce did you mean?” She is talking about the San Sebastián disaster and continues — now in the “solemn, merciless tone of a prosecutor” — “You did it consciously, cold-bloddedly and with full intention. … You knew the San Sebastián mines were worthless … You knew it before you began the whole wretched business. … You knew, before you brought that property, that Mexico was in the hands of a looters’ government. You didn’t have to start a mining project for them. What you were after is your American stockholders. … I came here because I wanted you to know that I am beginning to understand your purpose. … You had exhausted every other form of depravity and sought a new thrill by swindling people like Jim and his friends, in order to watch them squirm. I don’t know what sort of corruption could make anyone enjoy that, but that’s what you came to New York to see, at the right time. … They’re rotten fools but in this case their only crime was that they trusted you. They trusted your name and your honor. … And you find it amusing?”

Francisco does not find it amusing. “No. … They knew nothing about making money. They did not think it necessary to learn. They considered knowledge superfluous and judgment inessential. They observed that there I was in the world and that I made it my honor to know. They thought they could trust me honor. One does not betray a trust of this kind, does one?”

“Then you did betray it intentionally?”

“That’s for you to decide.…

The Farce

Francisco d'Anconia was in New York just as a major scandal broke alleging an affair between himself and the wife of a man by the name of Gilbert Vail. Vail's wife had shot her husband, then went on to tell the media all about her purported affair with d'Anconia.

After arriving in New York, d'Anconia is questioned by a reporter about why he had come to New York, as though the answer to the question was already known (the alleged affair) and that the reporter was more following procedure than pursuing a story. When asked why he had traveled to New York City just as the scandal with Mrs. Vail was about to break, d'Anconia says he is there to "witness the farce".

It is widely assumed he is referring to his supposed philanderous relationship with the wife of Gilbert Vail. That is, until the government of Mexico announces suddenly and without notice that it is nationalizing the San Sebastian Mines.

Dagny's brother James had been a major investor in the project, and had even had his railroad build a special line to run supplies to-and-from the mines.

I don’t give a damn about your brother James and his friends. Their theory was not new, it has worked for centuries. But it wasn’t foolproof. There is just one point that they overlooked. They thought it was safe to ride on my brain because they assumed that the goal of my journey was wealth. All their calculations rested on the premise that I wanted to make money. What if I didn’t? … Suppose I slipped up? I’m only human. I made a mistake. … My motive, Dagny? You don’t think that it’s the simplest one of them all — the spur of the moment? … Didn’t you enjoy the spectacle of the behavior of the People’s State of Mexico in regard to the San Sebastián Mines? Did you read their government’s speeches and the editorials in their newspapers? They’re saying that I’m an unscrupulous cheat who defrauded them. They expected to have a successful mining concern to seize. I had no right to disappoint them like that. Did you read about the scabby little bureaucrat who wanted them to sue me? … It seems that the copper fortune of the San Sebastián Mines was part of the plans of the central planning council. It was to raise everybody’s standard of living and provide a roast of pork every Sunday for every man, woman, child and abortion in the People’s State of Mexico. Now the planners are asking their people not to blame the government, but to blame the depravity of the rich, because I turned out to be an irresponsible playboy, instead of the greedy capitalist I was expected to be.”

Francisco continues to describe that the $8 million housing settlement he built was just “mainly cardboard” and everything else was built with scrap from “city dumps of Buenos Aires and Rio de Janeiro”. None could last more than a few months to a year, except the church — “they’ll need it.”

Dagny demands, “You, of all men, you should fight them! … The looters, and those who make world-looting possible. The Mexican planners and their kind.”

Francisco responds, “No, my dear. It’s you that I have to fight.” Dagny does not understand.

“My ancestors had a remarkable ability for doing the right thing at the right time — and for making the right investments. Of course, ‘investment’ is a relative term. It depends on what you wish to accomplish. For instance, look at San Sebastián. It cost me fifteen million dollars, but these fifteen million wiped out forty million belonging to Taggart Transcontinental, thirty-five million belonging to stockholders such as James Taggart and Orren Boyle, and hundreds of millions which will be lost in secondary consequences. That’s not a bad return on an investment, is it, Dagny? … First, I don’t think that Taggart Transcontinental will recover from its loss on that preposterous San Sebastián Line. Second, the San Sebastián helped your brother James to destroy the Phoenix-Durango, which was about the only good railroad left anywhere. … You realize that I named those mines in honor of my great ancestor? I think it was a tribute which he would have liked.”

Does this all still sound a bit farfetched for you? Are you still wondering what about this Francisco d'Anconia guy is redeeming in any way? Before I get to the second question, here are a few odd coincidences:

Francisco d'Anconia is allegedly involved in an affair with another man's wife when the news breaks about his mining project at San Sebastian being discovered to have been a hoax and a faux investment. Madoff fedrauded a bunch of investor while based out of New York, and after being caught for his faux investment scheme, an alleged affair suddenly surfaces involving Madoff and another woman, which has been disputed by some of the couple's close friends.
Bernard Madoff was good friends with Alan Greenspan, who was friends with Ayn Rand. Rand wrote Atlas Shrugged. Greenspan put the system in place while acting as Fed Chairman which Madoff took advantage of in orchestrating his scheme.
Madoff's ponzi scheme going up in smoke was part of a larger series of events that has left the global economic system in shambles, leaving governments around the world short for revenue with which to finance their exorbitant budgets.
The kind of people Madoff hosed have much in common with the investors who funded Francisco d'Anconia's wreckless adventure in the San Sebastian Mines, including that both groups were guilty of making the sake critical mistakes.

Still not sold? Read the entire book. I was both comforted as well as somewhat disappointed to learn when I first made the connection between d'Anconia and Madoff and began searching for the two names appearing together, that more than 800 people (or one person with 800 or so aliases) have documented similar thoughts here on the web.

Here are quotes from others around the web who have contemplated similar thoughts:

Jason at GoingJohnGalt.org writes:

"Consider this… was Alan Greenspan or Bernie Madoff playing the role of Francisco? Given Greenspan’s connection with Rand, it is very possible. And if so, his actions would fit. And one has to wonder WHY would Madoff construct such a scheme? He was already wealthy and an intelligent man. He must have known it would be discovered sooner or later and it would destroy his name. So why unless there was some other motive than making money???"
"D’Anconia Copper could have been the US Economy. And Greenspan certainly helped its demise by pumping the flow of money to those that did not deserve it. Madoff certainly helped it by bilking tons of wealth from idiots dumb enough to fall for his scheme. I know this is very simplified version of what happened… but it make sense. And then right when it was about to hit the fan, Greenspan retired??? Or Madoff went public??? Rather convenient if you ask me. Sounds like a blowing up of the docks!"

Snowman9000 at Bogleheads.org writes:

Madoff could have been a character in Atlas Shrugged. He's sort of the Francisco d'Anconia of today's scene.

Anonymous at Heavylifting.Blogspot.com writes:

The link to Francisco D'Anconia was the first thing that popped into my head when I read the news about Madoff. It will be interesting to see what Madoff's true motives were -- perhaps he was trying to stave off his financial ruin until after he had died, but this financial meltdown beat him to it. Or, maybe he did have very D'Anconia-esque intentions? I hope we get to find out.
# posted by Anonymous Anonymous : 9:54 AM

It was the first thing that popped into my head too. Also interesting is the Alan Greenspan angle (a close associate of Rand for many years before becoming Fed Chairman), whose monetary policies at the Fed seem tailor-made to precipitate the current economic crisis.and it would destroy his name. So why unless there was some other motive than making money???"
# posted by Anonymous Anonymous : 1:16 PM

Displayname at forum.objectivismonline.net writes:

Anybody want to buy into a great copper investment I know about?
Will Bernie someday reveal an alter ego??

All-in-all, I found more than 830 pages on the web that contained both the names Bernard Madoff and Francisco d'Anconia. The vast majority of those that I viewed were drawing a deliberate connection, and were not the result of the two names appearing in unrelated spots on the page as if by coincidence.

Am I sold on the theory? No.

However, the similarities are striking, and I'd find it just as difficult to completely rule out the possibility as I would to accept it as fact. I can't say for sure what Madoff's motives were and to what extent this global economic crisis is coordinated. That said, the newspapers these days are reading an awful lot like they did in the Ayn Rand's 1950's work Atlas Shrugged.

Oh, and one more question... What exactly does all of this have to do with the skyrocketing price of gold?

I'll close with a link to: Francisco d'Anconia's speech on money.

Tags: Conservative, Corruption, Economics, Government, Issues, Obama

Comment on "Bernard Madoff's Alter-Ego... Francisco d’Anconia?"

User Comments:

Anonymous on December 21, 2009
If you really want a Fransisco D'Anconia, look at Alan Greenspan. Not only did he read Atlas Shrugged, he helped to WRITE it.

This man was the author of Gold and Economic Freedom. He was a pall bearer at Ayn Rand's funeral. And he systematically rose to place himself into the position of Fed Reserve chairman in charge of the biggest fiat printing press in the world. And there, gave everyone everything they asked for. Low interest rates for free money for war, peace, the rich, the poor, you name it, he said yes. And now the whole house of cards is collapsing.

Either he was the biggest betrayer and hypocrite that the libertarian movement has ever seen, or the MOST CONSISTENT example of living the D'Anconia model that the world has ever seen. A whole career devoted to a single purpose, which he outlined in 1957 and again in 1964. One or the other. There are no contradictions. When you think you see one, check your premises. Invariably you will find at least one of them to be false.