Monday, January 5, 2009

The Devil is in the details

Washington, CT. 3:15 PM. Photo: JH.
1/5/09. Quiet, cold, snow-less, rain-less weekend in New York.

Back to the salt mines. Bernie Madoff was beautifully captured in yesterday’s Daily Mail in an excellent piece by Miles Goslett. It’s about his“likes” and “loves.” In the interview, the main source of which was his London office manager for more than seven years, Julia Fenwick, 38, we learn that Bernie was what we popularly call anal retentive and/or obsessive compulsive.

Bernie visited London two to three times a year.

His offices occupied two stories of a Georgian townhouse in an area of Mayfair known as “hedge fund alley.” It was run as a “proprietary trading house” investing the Madoff family assets which in 2007 were estimated at $220 million. Last year they negotiated a new ten-year lease and spent a million dollars refurbishing it, including with handmade desks.

He liked smoked salmon, cucumber and cream cheese sandwiches on brown bread. And Diet Coke. Only.
Bernie Madoff's $40 million private jet, Embreaer Regional Jet 145 in the Madoff colors (photos: Daily Mail).
He also liked a local restaurant in Mayfair where he could get pork sausages, Jewish or no, and what the Brits call a “fry-up.”

He also liked a good cigar. Davidoff, please.

His office was closeby his Savile Row tailors had – Kilgour -- who would come to measure him in his office’s boardroom.

He collected vintage watches mainly from a specialist George Somlo of Burlington Arcade in Piccadilly and bought wedding bands to match the color and design of each watch.

He stayed at the Lanesborough (NYSD 6.20.05) on Hyde Park Corner, a fantastic hotel, as NYSD readers may recall our visit. It is also fantastically expensive with suites up to $15,000 a night (the Royal Suite) and a fulltime butler service (for all guests).

Bernie even kept clothes there so that when he returned they’d be waiting for him all cleaned, laundered, pressed.
The Lanesborough on Hyde Park Corner.
He also liked to eat at George, the last great restaurant to be created by the late impresario of epicurean chic and taste, Mark Birley (Mark’s, Anabel’s, Harry’s, etc.).

He liked grey and black in his offices. Ms. Fenwick recalled that “the London office had to resemble as closely as possible the New York office – grey walls, grey carpets, black trim, black cupboards. Everything was grey and black .... We’d spend days before his arrival leveling the blinds, making sure the computer screens were an identical height, lining every picture up straight. No paper allowed on the desk .... We’d use black marker pens to touch up the skirting boards and the doors. Anything that looked as if it had a scratch or a mark on it, we’d have to retouch. Things like that would drive him nuts.”

His interior designer, Susan Blumenfeld of New York “even approved his wife’s clothes.”
George, a Madoff favorite.
Mrs. Madoff loved greasy spoon cafes and Boots faee cream that “had been shown to reverse the signs of ageing.” It was not sold in the US so Ms. Fenwick had “to buy tubs and tubs of Boots No. 7 Protect and Perfect Beauty Serum.”

Then there was the new private jet which he took delivery of only last March -- a $40 million Brazilian-built Embreaer Regional Jet 145 – black and grey naturally – with sofas and beds behind curtains and a cappuccino machine along with monogrammed crockery “BLM.” No luggage with metal on it was allowed as it might damage the seats. Bernie boasted that he’d been offered more than he paid for the plane by someone who was lower down on the waiting list.

The Mail article has a color photo of the man, at table with wife Ruth enjoying her dessert. It was taken last May in Mexico where he was celebrating his 70th birthday.

Why Mexico? It “coincided with a golfing trip.” Golf was a very rich mine for Bernie, as we know. Wherever he played golf, the men knew who he was. Mr. One Percent a Month. They boasted about it. People were eager to meet him, to put their money with him. This was May, only a very few months from the Collapse. By then he was very desperate and yet appeared to be operating as if everything was just fine. That’s steel nerves. Or something.
Bernie and Ruth Madoff in Mexico in May 2008 on the occasion of his birthday and a golfing trip (photo: Daily Mail).
There was an order to his pitch. First they met him. Then a meeting would be set up. There he would reveal the spectacularly steady results his funds showed: one percent a month. They could take it out monthly, quarterly, semi-annually, annually, or they could leave it in. By now wealthy people all over the world knew others who had their money with Bernie Madoff. It was like knowing the Best Private Label. And it made you richer.

To get in, it would take at least the mid-to-high seven or eight figures, maybe more. Rarely would a million be enough. Then, once a prospect seemed interested, he might learn that there was no more room in the fund. So even though they were interested, Bernie couldn’t take their money. Too bad. Tsk-tsk.

The very rich are not used to people turning down their money. However, as Shakespeare said, “poor is the man who has no patience ...” A few months later, that “prospect” might learn from a friend that there was a place opening up for them. Zap. Done. Thank God, no?

In Palm Beach that man who often brought the “good news” to a would-be investor was Robert Jaffe, the son-in-law of Carl Shapiro who lost hundreds of millions with Bernie Madoff. Bernie Madoff is now visiting another kind of ruin besides just financial on Robert Jaffe.

But that is now. This was then.

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