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tv   Today in Washington  CSPAN  April 14, 2012 2:00am-5:59am EDT

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claimed to have purchased were held in made-up account at wall street central clearinghouse. the depository trust and clearing corporations officially called the dpc p., but informally known among veteran traders as the dpc. this is the acid test for the masterpiece come a computer simulation of a live feed. here taking care to duplicate the clearinghouse is loco, page format, printers that and paper quality of the report. of course, those counterfeit records would always verify that the required number of shares for their innocent cow, safe and sound. so how could you not fall for the clicks it's terrifying. >> it seemed to me that all that absurd to put into legitimate trading would have produced the money. their creativity was really quite astounding. when people say folk should have
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known, i will give them that the statements will the little crude -- customer statements, not days. these reports provide up and exactly what a man like tucker would've dtc. but he kept old letterhead stationery from his earlier address is an old electric typewriter said that if he had to create an authentic looking document to satisfy regulatory query born accountants query, he could do so. he could get the old letterhead, have somebody type it out and stick it in the file and answer whatever questions that that would have to come down the pipe. dipasquale, his first big raker was in 1992 when one of madoff's early pick can do is, to account so i called up for contract of
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the story he could not make characters i've played this were fiction if they tell you, but these two characters have been sending money to madoff for years and then they got caught in 1992. this is one of his first big crises. and they supposedly at $440 million at the sec told them to hand it back to investors. well, madoff stole the money from another account, give it back to these investors. they'll promptly wanted to invest with madoff again. that these were the only people of god none of this ponzi scheme with all their profits and locked away safely, but the sec made madoff give the money back. all the earnings, all the prophets, if they just locked away. but they didn't. they wanted to come back and invest with bernie. but these two accountants only
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had six accounts. and through the six accounts, 3500 people roughly were investing. one outcome of ernie has 3500 people who want to invest. 3500 accounts. what does he do? feed is a new ibm computer. deepest values is a very simple mailmerge software program to create a program that can allocate a given set of trade across all of this account space on how much money they had and generate the thousands of account statements they made off now needed to produce. that was when he'd really automated his ponzi scheme. this is a man who helped automate the stock market, so it helped automate the ponzi scheme as well. >> it's often said a good rule of thumb for financial positions as if it sounds too good to be true, it's probably true. but this goes way beyond that
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and have a different take on it. >> every writer has some thing they wish they'd read that somebody else did. this is one of those. it is the most brilliant insight into the modern come and that to say, the madoff ponzi scheme. if this sounds too good to be true, you're dealing with the name is cherry. think about it. a professional nose to make it sound just good enough to tab to, but not make it sound too good to be too. and madoff was vaporetto. he never made it sound too good to be true. a smart ponzi scheme your while. so if you think you can defend yourself from a ponzi scheme or by staying alert to anything that sounds too could be true, back as an amateur. look at caught long before he gets to you. it's the pros who will make it sound just good enough to sound
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attractive, just good enough to interest you, but not so good that your red flags are going to start waving and your alarm bells will start going off. so that is another one of those lessons i think we need to learn about the modern ponzi scheme. >> any venue were taken in -- not financially, but -- >> i did, i did. just to give you a sense of how persuasive he was. i interviewed madoff in prison. i was the first journalist to be able to go interview him in prison in august of 2010 and a deal that the lawyer insisted on was the interview with embargoed for this book. he didn't want it thrown out into the media if there is a media firestorm engulfing his family at that point he get water fluid poured on the fire. so that was the deal. i will talk to you, but you can't use any of it until the book came out. i agreed, but a sad, it's a
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two-way street. you know, i will embargoed this material for this book, but you can't then go get this material to other people. you can't do other interviews. yack of course not, of course not. i waited 18 months to get this interview. bernie assured me in writing by e-mail subsequent, don't worry, diana, i won't let any other interviewers get ahead of this book. but of course he was lying. on my second visit with him in february 2011 i found a reporter from europe magazine. i unfortunately found out about it. i have very good sources and i confronted him. i said what are you doing? we had a deal. and he told me why he was doing it and maybe i misunderstood our arrangement. i did misunderstand anything.
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and that is from a second interview showed up on the front page of "the new york times" the next day. it is embargoed for the book when you are serving the embargo, but sure enough, said the the deal is off. and i was very agitated about that, but as i was racing for the prison to find a computer somewhere at the airport for the next day's paper, it occurred to me that i had actually trusted transport not to talk to any other authors. even though he was behind bars as a swindler when he made that promise to me. i mean, can you imagine how persuasive he must've been when he was a genius? he'd give me the insight into how convincing he was that i'm almost kind of glad it happened to me because you can understand something intellectually. you can you can type to people
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and i talked to dozens and dozens of madoff but tends to make tell you their experience. they can tell you how convincing they attacked their widowed mother and ensure that their money would be saved. and it's an intellectual understanding. yeah got it, he was a persuasive guy. what a happy new companies that being said great, bernie is not going to talk to anybody else. and you realize, why on earth did i trust him? whiners that i think he would keep that to meet? can you really understand the emotional magic but a first-class ponzi scheme or pass because that is the nonnegotiable job requirement for a ponzi scheme are. you must be out to make people trust you. if you can't do that come you've got to go into another line of crying. you know, embezzlement, bribery, something else. you cannot be a ponzi scheme or
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if you cannot meet people trust you. and this guy is so good he could make me trust him a little bit when he was already behind bars, so that is how good he was. >> along the same lines, you can't cheat an honest man, so the honest men and women here today, what can we learn from that? what can we learn to make ourselves less honorable? >> and "wizard of lies" commuter couple stories of people who had a chance to invest with madoff. and they were spared. i want to sell you one of those stories. there is a retired businessman. if i told you what retail chain, you would immediately recognize it. and he had angled for six months to get into manages money because he had heard so much about him. he had friends invested with ernie.
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he gets to the appointment, goes in with his accountant. the businessman's accountant. and they said they are in talk a about it. what's your feet kweisi says there's there's no feed, but i have a $5 billion minimum. $5 million minimum. i think bernie made it to many and assured based on who was sitting across the table. but in this case is $5 million. and the guy said, you know, i never get the first time money manager more than $250,000 to start but. the measure if you do well, i will put in more, but that is my limit. $250,000. and diana madoff says you can po an half million but it's got to be 5 million by the end of the year. the guy was tempted. he really wanted to invest in the sky, but he had this rule, a good, smart bro and he stuck to
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it. so he said, sorry, stood up, shook hands, walked out, never realizing he had just dodged a bullet because he didn't walk away because you suspect did when he was a crook. similarly, he chaired the online island had an investment with bernie madoff. dead donors who invested in a new date could be so much more good if their money could grow at a nice steady pace that bernie oscar. but they had a rule. they never invested with the money manager who didn't hold the asset in an independent custodio bank. some independent third party, a bank or trust company that held the stocks and bonds come a third-party custodian there called on wall street. so they said well, we only invested money managers to use a third-party custodian and bernie
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doesn't. could you make an exception just this one time? >> now, we will. so they too didn't invest, walked away not knowing they dodged a bullet. neither one of them suspected diana henriques was a crook. they both thought he was a genius. they both trusted him. but they had rules that were developed to keep them safe from excessive risk and as tempted as they were by this wall street wizard to waive those rules. they stuck to god and were spared. so that is what you can do. you can sit down and cannot figure out what your level of risk tolerance is, figure out what seems to you like a good smart way to manage your money and there's the basic commandments. don't put all your eggs in one basket. only invested some money uses a
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third party custodian or stick with tightly regulated mutual funds and bank cds that you understand and you nobrega leaders are watching like a hawk. so those are some basic rules. you can have those rules. many of madoff's victims have those rules. the trick is don't waveband for the people that you can't trust and admire and thinker geniuses. we all have wizards in our life. the people who think so bright, so successful and so good about debut that you trust them with anything. i mean, they're the tiger woods of golf, the wayne gretzky of hockey. at the george sorenson's coming to peter branches of the magellan bunch. these geniuses were larger than life and of course you trust them. well, trust them, but do not weep your rules for them. because that is what will keep you out of trouble. sticking to your rules, even
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when some glorious wizard is tempting me to waveband. >> just going back for a second, the guy that you mentioned, he is not identified in the book. wouldn't he be awfully proud to say i could not be church by bernie madoff clack >> is exactly the lion and the sales pitch i used and it didn't work. >> is the just very private clack >> yes. that's what i said to them. i said wouldn't you want to know that people should know -- >> he said he didn't walk away because he was so smart. he walked away because he had this will, but he still thought it bernie is a genius. he did not take you as a crook. he if he had discovered bernie was occur, i think he would've let me use his name, but he didn't. >> let's talk about the madoff family. his wife, ruth was really
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vilified from her hairdresser wouldn't do her hair anymore. she couldn't get a table at a few restaurants anymore. his son got a bit of a pass because they turned them into, although their life stories that did comment that you do seem to believe that they were not in on this? >> that is one of the most frequent questions i get is selected the family know? did ruth know? to marker and drew, madoff's sons know? i mean, we sit here more than three years after his arrest. the madoff bank rep trustee has reviewed -- i think there never is right, 20 billion documents that were drawn from the madoff firms, the storage area where they left their older records. not one fate of evidence that
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implicates debut. now one of the five people awaiting trial on criminal charges in the case had implicated bruce, mark or injury. not one of the five people who have pleaded guilty had implicated ruth, mark or andrew. i think at some point i have to say that people who say they must've known prove it. because i do not think that you can. i couldn't. i could not find anything that implicated them and i found a number of suggested bits of evidence going the opposite direction that suggests that they did not know. for example, madoff had a near death patch breaker in 2005. the excerpt on the back of the book jacket is from that episode. in 2005. he was facing $105 million redemption.
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he had $13 million left in his slush fund. if he wrote those checks, they would announce in the game would be. it would be over. $13 million was all he had. he scrambled. he borrowed money to his legitimate firm. move the money and ran back in his slush fund to use it to cover expenses. so from that experience, november 2005 until the following spring, his ponzi scheme is living hand to mouth. it is scrambling to get enough money to cover these regulate redemption demands without blowing up. during that period of time, neither ruth, his sons nor his brother altered their use of company cash is one at all. they continue to borrow money from the firm. they continue to use the firm's
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money to make entrepreneurial investments and capital investments. well i'm sorry. if they are your accomplice and they are down to your last million bucks, u.s.a. family, hold back, right click still say sorry, you cannot take that money out. they did not take all of their money out of their account as some of the employees did. they just continued to views they are madoff piggy bank as they always had. so that does not suggest to me that they knew that the ponzi scheme was in the dreadful peril that of the same. let's look at ruth situation. whether or not madoff was unfaithful to her with the particular people who claim he was unfaithful to her, she believed that he was unfaithful to her. what kind of lunatic, which he found a woman who could pick up the phone and call the fbi to
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cut a pretty good deal for herself, even if she was as accomplished? so that it makes sense. third game. from the beginning, from the date of madoff's arrest tallies deaths by suicide in the second anniversary of his father's death. he and his brother were represented by single defense lawyer. any lawyers in the room? you out immediately twig, did you click the two people are facing criminal investigation, they can't use the same criminal lawyer. why? at night because the various best thing is to roll him over and get a deal. the same lawyer cannot represent under those circumstances. the defense bar in new york knew as the months went by and the same lawyer continued to represent our commander that my commander were not facing criminal investigation.
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ruth was confirmed as an innocent spouse by the irs december 3rd madoff's arrest when she reached a settlement to forfeit all but $2.5 million at the $80 million she had in her own name. mark and andrew continued to use the family firm and were often in dispute with their father, which if they had this guilty knowledge, they should they would've won more often than they did. so i added all together. you'll have to keep an open mind and decide whether i have persuaded you, but i was persuaded that ruth, mark and andrew did not know about the ponzi scheme until madoff confessed to them. he by confessing comp by not playing and running off to someplace beyond u.s.
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jurisdiction that he would heal his family from the kind of vilification and typically that was hurled at them. it was one of the most astonishing things i've ever seen. but he was completely blindsided by the amount of anger and hate that fell on them anyway. and frankly so aside. it was extremely atypical for the family members are white collar criminal of any storage to fall under that kind of attack. to combat it. if you think that to michael milken. you think that to ken lay and jeffrey skilling. anybody remember their children being chased to the streets by photographers and paparazzi quiet though. monsters, organized crime figures, mrs. monster? anybody or rather her be dragged into the spotlight? no. the gotti family notwithstanding to speak to the spotlights
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themselves. that is noteworthy exactly because it's so unusual. so it's not unreasonable for madoff to expect they would be left alone if if he stood up to confess his crime and took the heat. he was absolutely wrong. and what they experienced was a remarkable trial by fire. if you accept that they were innocent and then read what happened to them, i think you'll find it hard not to feel some compassion for at least those members in the madoff family. >> what to think he was? the sheer numbers? >> i thought about that. why was it as a society we are so far out of our normal reaction. i think he was the time. i think it was the anger, the sense of public trail, that everyone felt in the fall of 2008. there were a lot of faceless
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villains that fall. remember lehman brothers -- name one person from lehman brothers. aig had derivative data. well, name one headliner from aig. outside the wall street world, most american citizens couldn't. those were faceless corporations that have somehow brought us to the brink of financial meltdown. and then we have bernie, a phase, a family, someone to be the target of all of their free-floating rage and anger come of this fence being betrayed because that is what he did rudy betrayed people who trusted him. well, that is the wall street did. it betrayed people who trusted it. but he was a ham and they hurt and it then. and i think it was the mood of the country that made him so much a target of public rage,
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rather than anything unique about them. >> broods stood by him in a lifetime. and he and she is still standing by at ernie had better things change. can you talk about that? >> it has changed and i was able to interview with this file for an article in the times about her life since then. she realized that her loyalty to bernie was costing her her family. now, why did she stay with him? the one time madoff lost his composure was when i asked him whether he regretted that ruth had stayed, with garish heat were issued made a different decision and they started to weep as he tried to answer the weep as he tried to answer the question.
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he clearly feels very deeply for ruth and she had left him from first sight at age team. she met him when she was 13 and he was his bronze to 60-year-old lifeguard. he was her home from the party and walked her through the next 55 years of their life. she married him at eight team. she adored him. she thought he was a genius. she worshiped him. and he needed her were shut in a very concrete way. she told me that she just after 50 years could not walk out on him at the most horrible moments of his life. it's a little hard for me to understand, but i've been married 43 years. i can tell there's some people out here who have been married
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longer than that. and she put it to me. she's a predator was a child? what if one of your children had committed some terrible crime? would you walk out on them? would you cut them off and never talk to them again? what would you do? very hard decision. and it was a hard decision for her. made even harder by the fact is she really didn't anyplace to go. think about it. her sons were talking to her. they walked out of the apartment because she is not what do with them, did cutter of. her friends, while they were all madoff pic ends. if any of them are inclined to take her and her lawyers would never let them do so. no one could even speak up in her defense in public without being vilified. so she really had nowhere to go. as she walked out on him she was essentially homeless. and she felt compassion for him. so she stayed.
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finally, in the early fall of 2010, she realized he was going to be impossible to reconcile. as much as she tried to reconcile with mark and andrew, and they refused to see her if she can to need to visit bernie. they spoke by phone quite regularly. she did not visit them that often because it is a long, long trip from florida where she was staying near her sister to north carolina. so she went to him and told him, i can't see you anymore or it will cost me my family. i have to choose. i have to stop coming here and you have to help me stop. so she attempted to pull away that fall and he kept calling. change your phone number. he kept trying to call and then she learned about her son,
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marks, suicide. the last time she spoke to bernie made us was to call him in prison and told them he was dead and she is not spoken to him since. so he is truly estranged from her in an absolute way. she is not spoken to him. she has begun to reconcile with her son, andrew, add she is hoped she would. but that was a very difficult decision and i am loath to be critical of her decision without standing in her shoes at the time. think of how not pressure she was under, how completely dispossess she was. i don't know if any of you follow publicity about the madoff options for the u.s. marshal auction off their possessions to raise money through some of the options should have been auctioned off. should attend and a half carat diamond ring.
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the homes -- you saw those. obviously the u.s. marshal service auction as a pairs of her pantyhose. her use geocode close. all of the moisturizers and shampoos from her bathroom cupboard. i can prove it because it's in the inventory that the u.s. marshal posted online. she was that utterly dispossessed. old pocket books, used shoes and boots, all of it scraped out of her house, put on display at the brooklyn navy yard and auctioned off. so i haven't been through something like that. i haven't experienced what she experienced in so i'm a little vote to question her decision. she had been somewhat not pampered person although certainly they had great wealth.
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they did not let that plutocratic levels as many we've come to know them. at the very, very wealthy. a little naïve, you little innocent and utterly unprepared to deal with what happened in the aftermath. i'm inclined to say and not sure what i would've done in their shoes. i just thank god i wasn't in her shoes. there is one body you should have, could have put a not to bernie made up for that is the security exchange commission. the book on that day in a detailed what the fcc to investigate madoff a little bit. two would go investigate and then stop and i would really file the report orinda shared by many would investigate a little bit. so this can sort of close a bunch of times some of the no one knew the others are doing. so after the whole thing unraveled of course they started taking it very seriously.
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and i'm an point in the book some fcc inspectors visited present and they want to know, how to deal with them for so long? and so i just think this is a really telling part of the book. the attorneys talk about the sony account statements that he generated for years and years and madoff of jackson says they were billy sony account statements. so the inspectors are sitting in credulous so there is upon us and then madoff says i can see how you might view them as false. but when i read that it really made me think about the phony war heroes who by the patches online and go to the parades and they do it for decades and decades and after a while they believed their own press. i wonder if there is some of that with trained for. do you think you really believe to is this genius of the world
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body was? >> i really do. as i said earlier, the first lab on the skimmer has to tell us to himself. the light he can somehow get away with it or he will somehow work his way out of it. the live is that at tcs, i thank you as as bad at keeping himself busy with other people. it was so high. this is the fcc inspector general who visited him in prison, in jail when he is held in new york. and he was outraged at the notion as i did and she filed false documents with the sec? and he said no, i sent the fcc the same documents i set my customers. [laughter] and inspector general said, but weren't the sole stock units? and that's when he uttered that line, after a long pause, i can see how you think they might be false.
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so he defended himself. i'm him as a psychiatric nurse and she has to tell me that the mind will not see what it cannot. c. that people will defend themselves against knowledge that they cannot bear to it now which. maybe there is something of that in madoff's assistance that he really was an honest and successful manager or many years. the government says no for most of this years to recruit. he really was failing on this record. while no, he wasn't. i think he can really bear to face who he really is. and until he does, i don't know that anything like the kind of remorse that we might expect to see a demand would cause such devastation, besides his son's suicide, two other investors committed suicide in the aftermath of the retired british military man who went into a
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park and blew his brains out in a french money manager who lost his veins in his office because all of his clients money. so aside from the financial refuge, charities that had to close their doors and people who are living a social security because they had been last, there is the human wreckage. and yet he still would argue with me in e-mails that we exchanged, that the dems are going to get enough out of the bankruptcy process to make all of this writer can i save dollars and cents could ever make it right again. so you know, i would press him on that. i don't just sit and listen when i'm dealing with nato. i don't waste time trying to argue, but i do price back on the side of reality and say wait a minute, you know, there is no way you can make these people hold, even if the trustee is able to get 100 cents on the
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dollar. people had to sell the family home they expected to lead to their kids. they can't get it back. the kids had to drop out of college because they didn't pay tuition. you can't kaposi are back. he kept this mess of broken eggs back together again. >> well, i can see how you would say that. >> other topamax your questions. there's microphones on either side. whoever make their first. go ahead, sir. [inaudible] -- with the sec, please? has consulting relationship with the sec. >> it was always an informal relationship. he was sent a a noted figure in the security trading industry. that's another to retail investors because suppressing if he didn't have any retail customers. he was a behind-the-scenes guy,
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and infrastructure guy. so the fcc consulted him and his brother frequently about rulemaking that would affect wall street trading. he was in the vanguard of pushing towards more automation of treating, 24 hour trading, globalized trading, things that have all come past the madoff was an advocate quite early years so he would serve on advisory committees, roundtable discussions. he would be part of the delegation that the industry would spend the fcc to argue that sun will change or another. but he never had official consulting relationship with them. >> how important was the notion of affinity fraud? i am from minnesota and at least in minnesota a large part of the jewish community was involved,
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not so much because they direct contact with madoff, but because they trusted their friends who have distressed in madoff. >> wonderful question. there is no doubt, and affinity fraud no doubt is the process of preying upon some affinity that you have a toothache time, whether it is ethnicity or country club membership for religious state, did she pray on that affinity to develop trust, which he then exploit through fraud. certainly at the beginning and it's a earlier it was. madoff's father-in-law who is a source of some of the investors who invested at a time when madoff insists he was legitimate and might've been. he knew people at his country club combat the jewish country for periods of those people got
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to know bernie. bernie served on the board. you see the university of jewish philanthropy. he became known and not community. so yes, initially it was an affinity fraud, certainly. he was playing on the trust that he gathered simply by being a member of that group, a respected, generous, philanthropic member of that group. but by its sand, paint it eat last ticket of its life, it is the last affinity fraud, far behind. you know, the sovereign wealth fund of abu dhabi fell forward $440 million. investors in the persian gulf who never dream a kid from queens is running their money or he did know that he was earning their money and thought of it only as a senior executive of
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nasdaq or investing with madoff. so far out it it's affinity root, but it began there. >> could you discuss the folks who withdrew phony profits and the rationalization that they really should keep that money, even though it was a ponzi even though it was a ponzi scheme by definition and came from other people's pockets? >> you know, the tragic thing about a ponzi scheme and that such a good question because it hits right at the kind of heartbreak that makes ponzi schemes the most diabolical financial fraud attempting to. it doesn't just hit the deck guns to get the balance. it pits one set of victims against another set of it ends. and there can be no winners. but what the law says another london second circuit in new york has set back the way that you weigh the equity in these
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cases is on a cash income or cash out basis. but the people who have argue with john the cash they gave madoff don't get anymore until the people who didn't get any cash out of their account has been made whole, too. and then if there is anything left, we can share and share late peers to the effort of the liquidation right now are to do it do not losers, and those who gave made madoff more than take a path. no winners, surely the most term effort because they are not winners by any definition that we would understand. they're just as tragically betrayed. they lost money they thought they had. but under the law, they received all the cash they had given madoff and in many cases even more. they received money for madoff stole from other people in the
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years to their withdraws which they thought were legitimate earnings on their investment. there's no way to make this whole. if you rob peter to pay paul, how do you undo that? you take it back from palm to give it to peter. paul isn't going to be happy about that. he is going to believe that was his money and i am sympathetic to that. but peter is going to say no, it wasn't your money. it was mine. so that's the kind of legal heartbreak that is stretching out now for years into the future as this tangle, this knot is unwound. you can see why did a little upset with made transept when he claims money can fit all this. no way. >> we have about one minute left here palmar question. >> with respect to mrs. madoff. it's called traditional love.
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i'm sure you would've shown the same thing. and she didn't. but the question i really wanted to ask was, had bernie managed to manage this until the day with the dow back at 13, would have dodged another one quite >> i think he would. i think he would. and groups defense they are, she settled with the government under forfeiture agreement that the latter to keep four and a half. she still is not reached a settlement with the bankruptcy trustee. so how much of that she will be allowed to keep when she's reached a settlement with the bankruptcy court we don't know yet. and she doesn't know either. yes, i do think if madoff had been able to weather the storm, he would still be going strong. i really do believe it. he was already dialing has returned down by june of 2008 he was only paying 4%. he would be paying 8% and a half
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now maybe. now, 75 basis point to be paying very little, but more that you could get in the money market fund and you'd be happy to have it, wouldn't you? ..
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>> good afternoon. you are here at the line in the sand panel, so if you are looking for whether poetry in the modern age, you are in the wrong room. we are going to be talking about drug cartels this afternoon, so -- >> sometimes marijuana. >> so in tucson anything is civil discourse. it's a pretty volatile issue and i hope we can all follow that principle today.
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just to introduce myself, my name is margaret regan and i'm a journalist or a tucson. i've written a nonfiction book about the border called the death of jostling. i'm very honored today to present these authors on this panel which by the way is sponsored by the university of arizona press so thanks to them. here's our format. we are going to introduce our speakers and they're each going to speak terry briefly about how their book deals with the drug issue if it does, and in what way and then we are going to go into questions. out that a lot of you have questions. i have got a bunch of questions, but then we will cut off my questions and we will get you guys going. we only have one hour and it's one hour sharp. we don't have the information yet but i do want to find out where you can find these authors selling their books afterwards. where is it? 10b and we hope there is an escort to leave them there and
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perhaps you will want to buy their books. okay so we will get started right away. we have peter laufer to my left. he is a journalist, broadcaster and documentary film make or who is now a james wallace chair in journalism at the university of oregon, meaning that as a writer he has said very prized commodity, a full-time job and a full-time salaried. peter has recorded all over the world. his first major exposure to immigration issue was the soviet invasion in afghanistan in 1980. he's going to give us some pretty interesting cross-cultural perspectives on the drug trade. from afghanistan he went to europe in the 19 80s. he started seeing lots of immigrants coming in from the middle east and asia and back in this country he was in
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california and around mexico struck by the similarities of that immigrants coming from mexico to our country the he is the author of more than a dozen nonfiction books on social and political issues including nation, the case for opening the mexican-american border. it kind of tells you his perspective right there. and today, today he is going to be talking to us about his latest book, "calexico" true lives of the borderlands. >> you would like me to take this up the drug stuff? i'm happy too because in fact what i attempted to do with the book "calexico" true lives of the borderlands was to look at the border through the lens of calexico, which is, it isn't the stereotype of the border town that you might think for most people and i went to calexico with the goal of trying to look
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at the border without looking too much at migration or add drugs, because these are the three things that i was trying to get away from, the magaw bolus, san diego, tijuana, el paso and juarez so often where there are borders and looking in looking at the borders as a drug problem or a migration problem. calexico is intriguing because so much is reversed in calexico. collects oh as many of you may know is a crossroads town. the cosmopolitan city is on the other side of the border, mexicali. that is where 1.5 billion people live in the sprawl of calexico. and in mexicali is the state capitol and the university and the symphony and the all-night body houses and really good
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restaurants. everything closes down at dinnertime, which is maybe 6:00. even in calexico and calexico is an imperial town which hits the bottom of everything in california, education, health, air quality, water quality, all of these things where california counties, imperial counties is the worst. and life in calexico as it has been, for those of you who are from here and know what it used to be like going back and forth across the border, life in calexico for calexico's was a mix life, going across the border and coming back and living until the wall went up. that which is called a fence in some places or a border in some places where there isn't even anything except say sand is awol in calexico. it's a wall that looks so much like the berlin wall looked when
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i lived in berlin and reported from berlin dryer to 1989 when the berlin wall came down. it is security and yes, it's wrong to equate the two but it certainly isn't wrong to compare the two. the architecture is so similar standing in downtown calexico and looking south as someone who lived up against that wall and west berlin, it is beyond e-rate. we don't have the automatic machine guns that are triggered by somebody crossing the free fire zone and we are not i think trying to keep ourselves in the way that the east germans were trying to keep their people in east germany. we are we think trying to keep people out, or so we say, but in
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fact what you learn from calexico very quickly is that wall is keeping us in and it is radically changing life and has radically changed life in calexico where the community, the communities of calexico and mexicali, something that was once one, is forcibly bifurcated against the will of the people who live there. they are at the mercy of mexico city and sacramento and washington were decisions made about their lives and these are decisions that they know our counterproductive. so the premise in my book "calexico," the conclusion, what i jump up and down about is that what we need to do with something different. one of the fascinating aspects of the border as an issue is that we can all agree about
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something, no matter our political point if you. no matter how we live in relation to the border and everybody in every state and on the border one way or another. we can all agree on this and that is that the border is broken. it is a tragedy and a disaster, and we can't fix it by putting a wall up because we don't have the political will or the social desire to have a complete wall. we are maintaining a fiction that we want to keep people out. and so what i suggest we should consider doing, and this relates berkley to the drug trade, is we let any mexican who wants to come up here, peer and to do whatever they would like to do. do they want to study? do they want to go shopping? do they want to see their relatives? do they want to go to disneyland? do they want to go to school.
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as long as there is system for knowing who is coming up and we are checking people who would want to, peer from any country and then we would use the power of the border control, all of their equipment, all of their men and women power to keep those big groups including the drug pushers. >> thank you peter. now sylvia comes from quite a different background. law enforcement i guess it's to say. sylvia longmire served as a senior intelligence analyst on drug trafficking and border violence in the state of california. she was also a specialist in the air force. her writing is regularly featured in home and today magazine and she is currently an independent insult patch consultant testified as an expert witness on the asylum case. sylvia's book is "cartel" the
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coming invasion of mexico's drug wars, which argues that cartels are moving their operations north of the u.s. and the drug wars are compromising our national security. and i have a nice quote on the book from an arizona and, terry goddard, the former arizona attorney general. he said that sylvia's book provides the much-needed perspective on a problem that has been hijacked by exaggeration, hyperbole and outright manipulation. so sylvia if you would take a few minutes right now to tell us the basic gist of your book in three to five minutes. >> the bottom line of sublive is drug war when a one. it's an overview of what's happening in mexico, why it's happening but more specifically how it's impacting our national security and white americans should care. i've been writing about the drug war for many gears and when people talk to me and asked me what do i do, and almost everybody in the country has heard at least one story about
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the violence in mexico and they'll think do you know what? it's really sad and it's really tragic but they kind of go about their day. it might as well be afghanistan, it might as well be something going on in cashmere and people in montana or illinois where i live or massachusetts or just kind if you know, why should i really care? it doesn't impact me. so my book is very u.s. centric as far as an american perspective and as qaeda from the strategic, where peter's book is a 1000-foot level where we focus on a particular area i am at the 30,000 levels taking a look at everything that's happening and then kind of drilling down on why americans should care, meaning that cartels are operating more than 1000 u.s. cities either directly operating there. 90% of the illegal drugs consumed in the indymac are coming from mexico. even where i live, live just outside the st. louis area and
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you'd think okay st. louis has nothing to do with mexico but we are seeing a huge spike in overdoses of heroin. not in urban and bad neighborhoods. these are 19-year-old caucasian kids who are middle class, upper middle class who are smoking this black tar heroin in their own homes and it's coming from mexico. hub cities like denver and detroit and atlanta, the largest methamphetamine lab ever busted in united states was run by one of the larger drug cartels in mexico and they have a huge problem in gwinnett county. again, not just along the border. i take a look at the challenges posed to u.s. law enforcement. i get a lot of questions about the somewhat, the title coming invasion and the town is really dire. it's not a world situation where you have armies of drug smugglers coming across with
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assault weapons and bombs and killing everybody in their path. think of it is an invasion like a virus. they are already here. their already here. they are already in violent confrontations. we are having an impact on what the cartels are doing with the mexican law enforcement and are having an impact on the cartels. but as they get squeezed tighter and tighter demand is not going anywhere. the drug demand is growing so the drug cartels want to keep moving those drugs into the united states so they are more willing every single day, every single year more willing to engage in violent behavior in public with u.s. law enforcement and with each other. the first beheading we had related to the drug war and chandler arizona just outside of phoenix, a pretty nice neighborhood. that only made the local news. that did not make the national news. we have had other beheadings related to the drug wars in the u.s. but that didn't exactly make the front page of the
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"boston globe" because it seems to be a local issue. cross-border kidnappings are exploding particularly in phoenix. there was a controversy because the numbers were pumped up for political reasons but even at two broke again in 2009 there were something like 260 kidnapping strictly related to the drug war, just a couple of hours away from here and it's not limited again, to the border region. in 2008 a 6-year-old child was kidnapped at gunpoint from his home because his grandfather wrote the drug cartel money. i had this great urge to write a book that explained it in very plain language to people who really wanted to know more but didn't want to drill into a lot of details about why it's happening and why they should care and why they should become, most importantly why it should become a national priority is supposed to just a side thing in folk saying that order is safer and more secure than it's ever been. i think we need to re-examine that, and that is what the book
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is about. >> thanks cilia. r. next up there is the very distinguished philip caputo. he has been coming here to the book festival i think every year since it started. isn't that right, phil? >> yeah. it's getting to be kind of old hat. >> it's still very popular. phil worked for nine years for the "chicago tribune." he shared a pulitzer prize in 1972 for his reporting on chicago and is a foreign correspondent for the tribune. he covered the fall of saigon in 1975. phil is the author of a work sufficient including "crossers" which you will be talking about today in into man o' wars including a rumor of war, highly respected book about his service in vietnam and more works of nonfiction. he divides his time between connecticut and arizona and
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"crossers" is a novel about the border. he tells me is just back from france where "crossers" is in french and i'm dying to ask bill, what is the name of your book in french? >> it's all -- is called clandestine. i probably mispronounced it. >> has book has been called a blistering novel about brutality and beauty of life along the the arizona mexico border. i'm going to direct my first question to phil since he lives down in cochise county. >> santa cruz county. >> santa cruz county, okay, but down in the southeastern part appears on it. in march of 2010, robert printz was murdered on his ranch in cochise county. law-enforcement officials immediately suggested it might have been killed by a drug smuggler and undocumented immigrant. to this day, princes murder
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remains unsolved. we don't know who killed him. nevertheless in the resulting fear and paranoia about mexico's drug violence spilling over the border, arizona passed punitive anti-immigrant law as the 1070 which targets undocumented immigrants who are living and working in arizona. so my question is, how much do our fears about drug smuggling feed into anti-immigrant sentiment that is already raging in the united states? >> well i think there is a kind of a general paranoia ball a long the border. it's probably strongest here in arizona because this has been for many many years were the most trafficking has been taking place. i think the fears about the drug smugglers and smuggling that does feed into a general kind of xenophobia that extends to the
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traditional jesus coming over to work in the holiday in. they are somehow lumped together with a really bad guy. i think people would do well to remember that there have now been something like 2000 people murdered on the mexican side of the line and printz, i think there were three murdered on this side of the line or two or something like that. so that, when the spheres are raised, they certainly have to be put into perspective, and somehow, and it won't happen here in this state with the arizona state legislature ever, but it's a very challenged
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group. [laughter] but you do need to make a distinction between the illegal migrant and the drug smugglers and even there you have to make distinctions between some guy he was just a drug mule, who generally is just carrying a load of marijuana over and say his boss, or a cartel leader or a sub lieutenant i guess is what the mafia might call the captain. so, yes, the answer to the question is i do think the fears about drug smuggling feed into it. again, a generalized xenophobia. >> anybody else want to respond to that? >> i totally agree with what he is saying it i've always tried to explain to people that they are two separate issues. josé maria who we should prioritize how we look at people
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because we can't stop everybody in my idea is we should stop dangerous people from coming first however those lines between those two groups are becoming increasingly blurred and that's making it very challenging for law enforcement because we are we are increasingly seeing a number of migrants who are just looking for work, who were being forced to become mules so they are being forced to carry drug loads either at gunpoint or their families and their children are threatened and they find out where their families in the united states are, their families in mexico and is not traditionally how the cartels of operated because the normally allow one hired hands or third hardees to bring those drugs across because, can we really rely on these immigrants to take the stuff across? they are also looking for risk reduction so it's a pretty good as this practice to let -- to threaten somebody in migrants are scared. they are scared out of their mind and they will do anything just to get out of there with her life intact. so it reduces the exposure to
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law enforcement for those drug cartels to just send a forced mule to send some dope across and if they get busted, at least they are not the ones that are going to jail. there is a lot of, a lot of -- and i love how it wrought that reality into his novel. so it's really challenging in border control. i consult with the "national geographic" channel on the border series which is very fascinating. if you have never watched it, watch it. and talking to the field producers in the folks who are out there who are dealing with the border patrol and working with them on a daily basis, east of it they could more clearly delineate between looking on their scope sore -- and saying this is a group and they are drug smugglers and this is a group of migrants when they get out there sometimes it's the
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opposite. when they catch these migrants who are forced to carry these loads, it's very difficult to tell whether or not they are telling the truth and they were at gunpoint or if they are working directly for the cartel and becoming very muddy. it's been recently challenging for folks who are working for security on our site to differentiate between the two and politically speaking to differentiate between how riled up should we get about this issue? >> and this is exactly why it's in our self interest to come up with a system to a lao those that we want to have up here, because they wouldn't be coming up here, the bulk of them, if we didn't have the need to have them appear. that's why it's in our self-interest to figure out a way to open the border to those who are not in a kind of a threat to us or our way of life
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or reinforce our way of life. once we do that, those who are coming up who are not a threat, those who we want, then those who are were hiding in the shadows, those who are identifiable as people we don't want up here, the drug pushers, the drug cartels fighting for their territory, the drug mules and one could add to that -- are we afraid of some terrorists coming up here that were signed by somebody that's not in mexico? all of these people can be separated from those we choose to just let up here without the excruciating wait that is now to try to get people to come up here often which is denied. you can just imagine the potency of the border patrol, the training that they have, the personnel that they have, and equipment that they have if they were running after people that
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are going to get here anyway and we want them here anyway, then those really bad guys which you identify in your book, we have a chance of keeping out of this country. >> thank you. phil i didn't give you a chance to explain your novel. would you like to do that now? >> well just real quick, i think sylvia mentioned it too, but the novel doesn't deal with illegal immigration or with drug smuggling as an issue. they are the background against which a different drama unfolds. that's partly a family saga about a ranching family here in arizona, partly a love story and in some parts the kind of novel, sort of a good tale.
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so i think what would speak more to the subject, it makes me feel more important as a novelist seems kind of frivolous. >> excuse me? >> oh, but i did do a story on the mexican drug wars in juarez for the atlantic a couple of years ago and that probably speaks more to the point of what we are discussing today and what i do remember from being down there was this, really was this sense, at least there, of being in a failed state almost, and of his a true service where people were afraid to talk to us and when i finally did get somebody to talk to us about what was
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going on, and this was down in the town called the way those casas grandes, he had to go into a backroom in a soundproof radio station with the door closed before they would say anything to the press. so, again, i think that probably has more foisted my novel. >> i am a huge fan of it and there are a lot of actors because there is one thread in this book that talks about drug smugglers that are coming onto ranch lands and kind of tearing up defenses and the violence in those ranch lands. i worked with the texas -- finding out what is happening with the ranchers and there's so much accuracy having to do with the issues that ranchers of having in arizona and texas so there's definitely a lot of
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crossover, what we are talking about here. >> like elvis. [laughter] >> okay, getting back to that whole issue of the things that are happening in mexico, the estimate of those dead in the drug wars in mexico is something, somewhere between 40 and 50,000. am i correct? in february the mexican president calderon came up to the border to juarez and he made a plea to the united states in english and he said, no more weapons. please, dear friends in the united states, mexico needs your help to stop the terrible violence we are suffering. sylvia and her book details how we already all know this that the market for the drugs being peddled by the mexican cartel is right here in the united states but she also details that the guns used in that violence are primarily coming from the united states. sylvia, my question is if we are
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providing both the market and the guns for the cartel, how complicit is the united states really and the death of the people in mexico? >> man, you know i always make people mad whenever i get asked about guns the matter what i say so we are off to a great start today. >> we love guns in arizona. >> you can hear me talking about it and texas. at dover's -- goes over real well. here's the things with the guns. is a polarized situation so we know that the cartels are using a lot of guns to engage in their violent behavior and it's kind of ironic. the mexican constitution allows for private ownership. they have their own version of the second amendment, they really do put their federal law prohibits private ownership by most people. you have to go through you now a congressional entry in a letter to santa claus in order to buy a gun in the one gun shop which is run by the military in mexico city so technically you can own
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one but in reality you can't. that is a reason why the cartel has to go elsewhere to get their guns. so you have two groups. you have pro-guns that has come everybody has the agenda when you are lobby group but they argue that the vast majority of weapons that are being used in mexico are coming from central america, former eastern block countries in asia. it's not in their best interest for, to say that the majority of guns that are coming here because they are afraid of weapons assault bands will be reinstated and they are worried that the government is all of a sudden going to start breaking into their homes and taking their guns away so that is what they will argue until the end of the world. then you have the other side who says it's the federal government to make up the vast majority of guns in mexico are coming from the united states and that is relying very heavily on the bureau of on the bureau of alcohol, tobacco and firearms data. there are obviously a huge
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issues where something around 2000 guns were purposefully allowed into mexico under that operation, so that skews the statistics a little bit. here is where the problem comes in nobody likes hearing it. the only paying -- thing that people don't like being told more than they are wrong, they don't like being told that they don't know so that is very frustrating. i am analyst and i have my own personal opinions and my own personal politics but i can take a look at the information i have in the information i have tells me that no one knows exactly how many guns in mexico are coming from exactly what countries are wet places and in what proportions, because it's the nature weapons trafficking. it's a black market trade. so we know that many of the guns have been traced back. we know thousands of those guns have been traced to point of origin here in the united states and it's not just arizona and texas. the number for state, the most
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popular state to buy guns and ship them into mexico, washington state and there is no drug war going on in canada. it's the wrong order, folks. they are coming from other states far away from the border and it's because of the gun laws they're so yes we do have a black gun laws in some particular areas but the bottom line is the cartels are using our own laws against us. they are u.s. citizens with clean backgrounds who passed a background check to hire cartels to go do these gun stores and buy the guns and give them to a middleman who gets it to a courier to send it to mexico so even if you reinstate the assault weapons ban which by the way his 17 is 17 weapons on the assault weapons ban and only two are the favorite listed the mexican cartel. there are so many ways to modify weapons. it's easy to convert a semiautomatic rifle into a fully automatic right of. the cartels are smart.
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they are businessmen, their profit makers which means they want to get their products or whatever they need fast, cheap and easy. a black-market ak-47 in honduras will run about dirty 700 to $4000. if you get in and texas about $2025 depending on how far you want to take it. it. honduras is an exactly, technically next-door but it's a long ways to get it there. it's only a day's drive to go from monterey into texas and turn around and come back so looking at it from a business perspective from a logical perspective, logic tells me as an analyst that the easiest place for them to get the guns they want us to come to the u.s.. but such a small percentage of the guns being used in mexico are actually seized and the small percentage of those are actually trained in a way that tells us something. part of those came from fast and furious. many of the guns that are seized
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are destroyed and never submitted for tracing, stolen, sent back to the cartels, so we have to little reliable data, to little reliable information for anybody anywhere on the political spectrum to say that they know exactly what percentage of guns, so if the nra tells you something or the mexican government tells you something or the federal government tells you something and they are 100% sure that is the truth, don't believe them because nobody knows. it's a terrible answer to say that we don't know. i don't like it is an analyst. it drives me crazy but that is the reality of it and it's because of that disparate information and the lack of facts and the lack of data we are at a stalemate when it comes to policy or to a slowing down that south down flow of weapons and i don't think we are going to see a lot of movement because of the political issues surrounding it.
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>> would you just speak about arizona? i know you mentioned arizona of being being a source of guns. >> as far as specific? i mean, obviously arizona is the home of fast and furious. came out of the phoenix field office. i don't know if you want me to talk about that in particular. is one of the top source states but that is going on atf trace data which is reliable in some cases and others not so anytime the trace data comes back from mexico from a particular store in arizona, especially going back anywhere from 2900 fast and furious really started, some people automatically assumed well it was part of the fast and furious program and now it's even harder to find out and separate, is this gun genuinely purchased by a straw buyer somewhere in arizona by the cartel in mexico or was it part
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of the fast and furious program? that is becoming even more challenging but yes arizona -- the gun laws are lax compared to many of the other states in the union and the guns are cheap and it's easy for cartel to higher straw buyers so it is one of the top states in my opinion. >> maybe we could talk a little bit about possible solutions. what we are talking about is the lack of gun control laws. peter do you have any thoughts on guns? >> i have my uncle hugo's on. my uncle hugo managed to escape from prison in siberia and spent six years getting across asia and europe, back home to budapest where he asked his kid on the street who was about six years old where the house was and his family because they had moved in the intervening time. he said i will take you there, it's my house. it was his own kid and they had
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this terrific gun. >> that's quite the story. >> and that gun, if you pulled -- put it up your nose and pull the trigger you might manage to get a nosebleed. regardless, there is another part to this equation of making the border more secure and safer by allowing for the transit of mexicans who we have no problem having up here and that is as bill said, mexico can be with all respect identified as a failed state. and whatever responsibilities we may feel that we have or not, it is only in our self-interest to try to figure out how to work with mexico if we can imagine any possibility of repairing it
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to some extent. so, when you look at the border and many of you i am sure have gone back across the border, going into mexico the straw buyers in the middlemen you are, when they take those guns into mexico they are not screening anyone. it can be in a safeway bag. just doesn't may kinney bis -- difference because of the nature of the border. once they are in mexico, when they are doing whatever they're going to do with these guns likely there is somebody who also has a badge in his pocket that they are dealing with because it's a corrupted police force most everywhere, except maybe with some of the better -- some, some. i said some. >> all two of them. [laughter] spisak but true. so we can from her privileged
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position here get a laugh out of that and it is perversely funny but until and unless there is improvement in the political reality that makes up that part of the mexican social life, we are going to have problems. >> margaret if i could just interject? there is no doubt that the u.s. as a drug market, and i might add also a market for cheap and exploitable labor, as well as to whatever degree it is, supply, and i believe there is a lot of mythology about how much weaponry goes drum the north to the south. all of that said, one of the things that really gets my hackles up is when calderon makes a, it like that. nobody is trying -- he's trying
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to do with the elite in the mexican government society have done and that is to call attention away from the political corruption. it isn't just that it's expensive. it is systemic. >> it is endemic. >> is within the very dna. and not just the politics. >> in journalism, the cash payouts in government without which so that so many journalists in mexico could not make their heads. >> or those who, like a gentleman i met a couple of years ago named gutierrez, who would not take any payoffs and was critical of the activities and actions of the mexican army as well as the straw wars, was
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finally threatened with death and escape to el paso where to this day he is still seeking political asylum. >> we have been talking about the death of migrants and it's appropriate to talk about how dangerous mexico is for journalists and after iraq it is the most dangerous place for journalists based on journalists being murdered. >> what would be the impact of legalizing drugs or even legalizing marijuana? how much of this thing would it come out of the drug cartel? it's one of my favorite things to talk about. >> i wrote an op-ed for "the new york times" and i got a huge response. i never wanted a polarizing topic but you know that is what i live for. you have to understand how the drug income breaks down. the cartels are involved in the trafficking of drugs, marijuana,
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cocaine, methamphetamine and there one that accounts for the highest volume of drugs however cocaine accounts for the largest profit they are making from bringing it across, so you take a look at it and again it's black market, it's not like they have pricewaterhousecoopers doing their books for them and putting it on the internet for everyone to see so remember it's only an educated guess. we are only stopping 10% that's coming across are you have to extrapolate from that but the limitations of an educated guess, the rand institute did a study on this, but roughly 25% at the high-end of the cartel process is coming from marijuana and, not just the other drugs but now they have branched out into kidnapping, extortion, even if fuel theft, cattle rustling, mining. if there is money to be made in mexico, the cartel has their hands and his oath you take away
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marijuana and in my opinion you're going to have a -- just like all of a sudden if you say were going to cut off oil. we will get it from somewhere else and then he will be stuck if you have nowhere else to send it. so you cut off marijuana and you're going to have a short-term debt in the market as far as for the cartels but they are going to make it up using cocaine, heroin and methamphetamine and still bring in that across and they're still making money hand over fist especially with kidnapping because kidnapping of migrants coming more from central america and from mexico is absolutely exploding. so unless you legalize every single one of those drugs from top to bottom from production to consumption you're not going to have a serious impact. you're not going to stop the cartel. it may go down a little bit. >> we are just about ready for our audience questions, but before we go to that i just have to reach read you guys this
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letter that philip caputo rattu are daily newspaper this week. our legislature in its wisdom has passed a bill saying that they are going to offer warnings to everybody not to go to southeastern arizona if i understand it correctly. >> that's right. >> the a 62-mile corridor. they warned people not to, and as we all know we have a lot of tourism down there. here is a quote from philip caputo from the "arizona daily star" on march 7. i travel the highways and county boards of southern arizona for four months a year for the past 16 years and never have been threatened by anyone, citizen or alien. i have also hunted, hiked, camped in written horseback in the backcountry over the same. lack of time. i've had numerous encounters with illegal migrants and even drug smugglers are going number of times i've been shot at or otherwise threatened, menaced,
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zero. so phil that is a public statement made about the safety over the rural lands. if anybody would like to ask a question, we have microphones on the other side of the room. >> you forgot to add that i did say the sponsor of the bill, representative peggy -- claims she asked people everywhere in arizona and i want to bring this out and i did state that that's her problem. [laughter] cnn he goes on to say in these tough economic times, the last thing this area needs is to scare visitors away by raising imaginary fears. so mr. philip caputo, in our paper. [laughter] [applause] start with this i. >> i like this push on the
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question, how do we do this? if you were to absolutely trace your perfect path, how would your book result in action that would improve the situation? testifying in congress, would have to country read the book and say this is what we have to do? how are we going to get some action out of it? >> i want half the country to read my book. [laughter] >> what would be the process? the process likely could be administrative, to change the rules regarding what is needed to, from mexico as a mexican into this country. and if we instituted a process that would likely go through the
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state department that would indicate what type of identification we would mandate and what kind of a check we would institute, what are siege or would be, this is something that could just be put into place. we are constantly making changes. brazil decided to charge $100 for a visa fee for americans to go to resell and we respond we start charging $100 for the visa fee for brazilian to come up here. we have these bilateral relationships with the foreign ministries or whatever they call them in the various countries that we have agreements with and we could institute this and just make it happen. >> let's have one person answer each question because we have several people lined up. >> is the son? this question is mainly for you,
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but i am reminded because peter and phil also used the same language defining mexico as a failed state. and my question is, they call the mexican democracy so fragile in the cartels are increasingly more powerful. from the analyst point of view, do we have to fear the total collapse of the democratic state of mexico? >> that is one of the few things that i disagree with my fellow panelists here. i don't think mexico is a failed state and i don't think it's a failing state. mexico has the 13th largest economy in the world and it's actually expanding believe it or not. tourism has expanded. the private sector has expanded by a small percentage and their economy is hurting pretty bad but they do have a functioning democracy. the local elections, local and sometimes at the state level
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have been impacted by the drug war by coercion etc. but they still do have a functioning democracy. yes the judicial system is totally screwed up but at least they have one. they have a functioning military that works. they have like i said, grouping -- booming private sector in their tourism is still exist in. when i think of failing state or failed state i went -- i look at somalia and pakistan being on the brink. if you take a look at somalia and take a look at mexico and put them next to each other and compare the two, just can't do it. looking at what's going on in afghanistan trying to compare the situation in the tribal areas, it's two totally different situations into totally different world. yes there are several parts of mexico that are under cartel control and not under government control but the same as the case in colombia for decades. it was only maybe a decade ago
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for the colombian government could say the of the government present in every single department and even that was maybe one person who worked for the government and that is not in my opinion government control. we never said columbia was a failed state. so i understand where some people are coming from when they say look, the situation with the cartels and the fact that they own the police and they own the government and at this date -- the local level and sometimes the state level but overall i don't think they are -- but that is just my opinion. >> phil? >> i guess i would have to direct this question to sylvia. i saw the back of the beaufort police car there written in very large letters, this vehicle was purchased with confiscated drug money and i have read numerous articles about the amounts of money that the police departments confiscated from people who are suspected or
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actually involved and i'm curious if you thought that there might be developing just as there is an mexico is symbiotic relationship between the people who are in the drug business and the people who are in the law enforcement business, if they are becoming very much dependent on each other for their own survival? >> you are not the first person to suggest that. ian, there is a writer out there and he lives out in arizona. he doesn't like me very much. he believes that, he believes that it's a huge industry that border security as an industry and there is a lot of money involved in the border security. if it wasn't for the extra police and the extra money going into it and the fight against drug dealers and drug cartel as a whole, is a huge industry so i can't argue with that.
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there are also an increasing number of corruption cases dealing with the drug war along the border and elsewhere and not just border control and not just customs, looking at the sheriff as far as that is concerned. so at one level i would say yeah. it's big business and there a lot of state department to rely heavily on grants from the federal government because they are dealing directly with border security issues in those grants are not always use in a way that they are supposed to. but i also know there are a lot of police departments out there who are very underfunded and they don't have nearly enough resources to deal with the challenges that they are being faced with because of the increase in confrontations and the increasing border security. 's be. >> overhear. >> this question is for anybody but sylvia. thank you for mentioning
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columbia because i have been concerned for years about the billions of dollars that the u.s. given to colombia knowing that the military was enlisted in displacing over a million people and now there is the merida initiative by which we have, i don't know the figure, but the panel knows that the police and the local police and so forth are corrupt and yet the u.s., i mean a book by a former border patrol agent who is retired now, he was really mad at kos they had to share permission with the corrupt police. could someone please tell me why we give money to people that we know are corrupt? not you, no, not you. >> this is a common misconception.
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that is completely spent on u.s. resources and u.s. companies who manufacture and provide equipment to the mexican police and the mexican army and it's provided to the mexican -- american contractors and american businesses are going to mexico to provide training to the mexican police or military or private training here in the united states so not red cent of the merida initiative is provided to the mexican government. >> just the material. >> the material yes, and that equipment yeses possible that equipment to get into the wrong hands but we are talking about helicopters, night vision goggles. the cartels already have the stuff so they want to get more but there is obviously you know, they could always use more but as far as the training provides the bulk of it and they are actually pulling back a lot of the heavy equipment because they are changing the merida initiative focused to focus more on state and local because the main problem with corruption is
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it's at the state and local level and not at the military level. they do have the problems but that's a common misconception about the corruption and are we just pouring the money into the hands of politicians? >> so all that material and training goes to those that phil was talking about? >> that's right. and they are in fact asking for asylum. [laughter] >> but you know it's possible, and i have no expertise on this but i have heard that same story about the reason we keep up this policy of her liberation enforcement and interdiction is because it has become an industry and it could be that the merida initiative has led to american contractors and they can make a lot of money selling whatever to limit who can army or the mexican federal police
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are in a way part of this industry. >> at the same with border control and certainly in calexico were it not for the infusion of border security, the economy would be in worse shape. that is recognized in calexico. the border patrol is associated with the economic realities. >> okay. we have about five minutes, or three minutes. if we can get a few questions answered. >> this is a follow up question to sylvia who spoke earlier about legalization of drugs in the u.s. and what impact that might have on cartels. some in latin america are taking steps to legalizing drugs and i wonder what your thoughts are on the impact of legalized drugs in other countries that it could have on the cartel problem and also what impact does it have on u.s. policy in relation with those countries? >> one thing that i want to make very clear is that a lot of
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people don't understand the difference between decriminalization and -- decriminalization and legalization. what -- a lot of people talk about portugal having legalized -- they have decriminalized meaning that if you are busted with a couple of joints are not going to jail. it's like getting a traffic ticket. it's still illegal in every country in the world to manufacture and produce all these different drugs. mexico itself quietly decriminalized personal use, i mean everything, everything, and the local drug markets in mexico have exploded. the drug use in juarez has actually gone up so unless you want to truly legalize, meaning from growing the poppy to injecting it into your arm and and make all of that legal for all of the drugs, only that, and you have to have it happened
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several countries. as far as the u.s. taking a look at other countries, don't really think it will make that much of an impact. there is that whole little thing called the united nations single convention against illegal drugs and we are one of the signatories along with 186 other countries and that requires that all signatory countries have anti-drug policies. bolivia just pulled out of that because they are big on pro-illegal coca and having the legal market but they want to go back in. they want the u.n. to make changes to it and bolivia relatively speaking or are standing on the international, the international world there's really not that high so no one is seeing a decline but the u.s. has a long moral history of being anti-drug. so i think even if all of latin america were to decriminalize or looking at the corolla station i don't think the u.s. would change their mind. >> overhear.
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>> the or mr. laufer. you talked about changing our policies to allow those we love to cross the border and focus on keeping out those we don't want. you may have answered this in part but how do you distinguish between them? >> you distinguish between them with concern and accepting the fact that you are going to make some mistakes but we do have some method of identification that you are going to accept, then that will allow you to have some sort of a check on the person. then you ought to be able to determine who you want to have been then and who you don't than we do that with countries all over the world that we allow much easier passage into this country. a passport or a card, gas and get it in this room and let's search you or whatever it takes so you're happy that the person who is coming in is probably okay. but that way, when the border
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patrol is out there looking for people that are running you can be pretty sure they are somebody we don't want and hear. >> wouldn't that open it up for the cartels to hire people to get these cards? >> of course and there are probably some of you that will drive home tonight over the legal limit because you stop off at a bar and maybe some of you that drove here, and your licenses have been revoked. you probably went over 65 on the freeway or whatever the speed limit is underway here. of course. it isn't perfect but what we have now is a disaster. it's chaos. it's a human tragedy. it is causing nothing but problems, so i say let's try something different and this is the idea i've come up with. >> thank you. i would like to see that happen. [applause]
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>> i think that brings us to the outcome is that right? we have no time left. the authors are going to -- tenth b for so those of you that's a question to you can make your authors down there and maybe buy some books. [applause] campbell, professor f
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women's studies at the university of arizona. this is an hour. >> welcome to the leadoff batting session of the tucson book festival.
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our session is called a emerging from the shadows, women in the lives of wilson, jefferson and twain. i enter the temple. i teach in both english department and and a gender and women's studies and i will be your moderator for today. i sent the esteemed authors for questions to think about and they are free to range widely or to answer some of the specifically. so i'll just go through them quickly. what is the most intriguing discovery he made about your biographical subjects? what were the challenges of balancing the women's lives of the more famous men to whom they were attached. but audience did you imagine reading your book and how did this influence your writing? i bet they were thinking of a paying audience. and what is a mystery or question that still puzzles you about the wanted for the women
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quiet each of our authors has agreed to speak for eight minutes, which should be the thing that it's time for questions and answers. our first author is christy miller, who was a research fellow at the university of arizona south west center. she is the author of four books. her enormously popular biography, isabella greenway and enterprising woman was followed by a volume of friendship, letters between eleanor roosevelt and isabella greenway. today shall be focusing on her latest book, alan and edith, woodrow wilson's first ladies of the time i cannot eat it would be wilson's second first lady. [laughter] ..
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who is a secret woman president for 18 months. jian-li was wrong about all of these people. [laughter] in research and came to realize that woodrow wilson was a deeply passionate man. i discovered he had an eight year intimate relationship with another woman during his first marriage. now i was surprised but that wasn't really an intriguing discovery because it was in the first time a presidential candidate had had that type of
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relationship in his background. [laughter] the really intriguing discovery for me was that the importance of his lives was the opposite of what i had imagined. allin as far from a complete non-entity. she had a major influence on the ladies of the 21st century. while edith merely provided a cautionary example of the limits of the first lady's power. ellen's influence could not have been predicted from her early life. she came from a small town in georgia after earth the civil war. but she was a perfect partner for the ambitious young professor. she was unusually well-educated for a woman in her time and place to come and she helps her husband with his studies. she learned german so that she could translate political monographs for him.
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she helped him with his speeches, she critiqued them and provided at quotations because she knew a lot of poetry. and with her help, woodrow wilson became a successful professor, he became president of princeton university, governor of new jersey, and finally, 100 years ago, he was elected president of the united states. so in 1913, ellen willson found herself in the white house. now this is not a place that she ever imagined she would be or wanted to be. she thought being a professor's wife was the pinnacle of achievement. about once she found herself there, she determined to use her position to do good. she'd been interested in social work ever since she was a student in an art school in new york and she began to look around for a project in washington, d.c., and she discovered that behind the capitol building there was a
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maze of alleyways. they were dark and dirty. they bred crime and disease and ellen wanted the buildings torn down and replaced with modern hygienic once. at that time, the district of columbia was run by federal government. so, ellen took a white house carter and began to drive the congressman through the alleys to show them the squalor that extent right behind the marble halls of the capitol building. as far as i know, she was the first first lady to campaign for a cause that was not her husband outside of the white house. however, during woodrow's second year in office her health began to suffer. he had kidney disease, and she had to give up her activities. by june of 1914, she could no longer get out of bed. jennifer 1914 saw the assassination of the arch duke the transferred of austria and
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soon boon world was at war. by august 6th, ellen was dying. she realized she was running out of time, so she asked her husband's chief of staff to go to capitol hill and tell the members of congress she would die more easily if she would just pass an alley bill. so the senate took action in time for her to hear about it before she died. the house took action shortly thereafter the legislation was never implemented because of the entry of world war i. at this point, ellen's life seemed fairly inconsequential putative would be 20 years before her influence would make itself known. meanwhile, she left a grieving husband a year after her death she married a lively widow ellen who became his partner, too.
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she worked closely with him during world war i decoding secret telegrams as they came in from europe. together after the war they went to paris where he negotiated the paris peace treaty of riverside, and that provided for a league of nations, something he very much wanted. but he was ahead of his time. the senate and the united states objected to the league of nations and refused to ratify it. so, woodrow with edith undertook a trip across the united states to try to rally support among the american people for the league of nations. the trip proved too much for him. his health broke down, they sped back to washington, d.c. but it was too late. he had suffered a massive stroke. he was partly paralyzed. he could hardly speak, and nobody knew what his mental
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faculties were like as a president he was completely incapacitated. so edith wilson stepped in and assumed more power than any first lady before or since. she instructed his doctors and the white house staff to keep his condition a secret. if his condition had been known, his opponents would have forced him from office. she knew that woodrow wilson would not have wanted that, and she always did what he wanted to read during the next 18 months, the remainder of the term, ebit decided who would be allowed to see what role willson, and what issues would be brought before him. but mostly, she just postponed decisions hoping she would get better and deal with them himself. he was actually to take more action for the sake of the country, and she said i'm not thinking about the country, i am thinking about my husband.
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but i realized then was that edith wilson was a very traditional life. also today she has a reputation of being a half breaker. i found instead that was allin willson it is when to break the new rounds. as the secretary of the navy, his wife was a tall, shy woman. she knew alan willson, her name was eleanor roosevelt. in her years after her death, no other first lady lobbied for any legislation. the first things roosevelt did on entering the white house was to go to capitol hill and began to lobby for another rally will. as you know she went on to lobby for many of their causes and and
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for a modern first lady now respected to lobby for their own causes and their husbands interest. whether it is michelle obama or ann romney or someone else, we will be expecting her to follow the lead fighter she knows it or not. [applause] saxby for so much. virginia scharff known to many of us as gingey astana director of the center for the southwest at the university of new mexico with scholarly books and taking the wheel in the coming of the motor age and 20 il's and rhodes the women's movement and the rest has to textbooks. she was a research fellow at the university in 2008 and is the
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women of the west share of the national center in los angeles. she was president of the western history association in 2008. in case you have extra reading time under the name of virginia swift she's the author of several mysteries. today she's speaking to us on the women at jefferson loved. >> it's great to be back in tucson and see judy again. i did get my ph.d. the university of arizona, and i am thrilled to be actually back in my neighborhood, so thank you for having me. this book, the women at jefferson loved is about the women that thomas jefferson felt he had made secret promises to. so it's about his mother and his wife and his daughters and his granddaughter's and the women of his great her family. when i say the women jefferson loved, what name comes to mind? i know why you are all here. [laughter]
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sally hangs, of course, the person that is family tried hardest to erase. this is his granddaughter, ellen rim of coolidge and she took it upon herself to try to erase the entire story about thomas jefferson and sally hemingses and she said this relationship, the relationship between my grandfather, my grandfather and this slave girl could not have existed, but in tough, couldn't have come he wouldn't have done it. she called it a moral in possibility. i'm going to guess the people in this room know there are lots of things that are not moral in human relationships but there are hardly anything that is impossible. so, what the kind of story that ellen could little about thomas jefferson's family looked a lot like a sentimental image of what thomas jefferson would have called the enemy is that of domestic life. the women over here with the other granddaughter mary in
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virginia randolph, and they are coming you know, out there having a nice time. dumoulin possibility that his wife's side of his family tried to say that this relationship would have been it wasn't an impossibility, it was a family tradition. so i put this thing together, putting things on the boards and then harper collins cleaned it up and made it look nice. what you will see here is this is in the books and you can tell the players because you have the program here. when you will see is over there if you can find thomas jefferson mine sorry i don't have a laser pointer, right next to him is martha wales, and marshall willson father, john wales up in the first generation there had three wives, she married and buried three women and the first was the mother of thomas jefferson's life. after his third wife died he
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took up with a half african come have english slave woman named elizabeth hemingses, so she's over there and with devotee hemings he had six children. the youngest of whom is sally hemings so the first interesting thing i found is that thomas jefferson's wife and sally hemings were half sisters. half sisters and they couldn't have known it. if there were six kids running around the house i'm going to guess you know who the father is. but then the most interesting thing that happened next, thomas jefferson's relation with sally is the second generation in this family of man of english ancestry to have a relationship, intimate relationship with children with a hemings woman, so sally hemings had one african grandparent and three english grandparents. her children with thomas jefferson then are moved down into mostly english ancestry in
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a very fast way than what happens is her niece devotee hemings, after thomas jefferson's daughter died, he takes up with john wilson there's yet a third generation in this family comes to a moral and possibility, certainly not. what we have is an interracial family, house divided, to shadow families that live together and i found the question that intrigued me the most, the thing that really got me going was the question of how did they deal with each other? what was it like when they were all in the same room? call can we understand the kind of lies, secrets and silences that this family lived with? all families. families or where the secrets and silence go to live. but we don't have that. so how do we draft our head around that story?
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these are the places these women live and one of the surprises i got right in the middle of the map there was more of the jefferson monticello and if you read the but you can find out more about the place that she cared about most. thomas jefferson actually bought where she lived with her first husband. that told me he loved her. how many guys buy a house of a life lived with their first husband and that told me she had a certain influence over him as well so that was something else i learned about from this book. we have very few documents about these women, so thinking about that, finding sources of would be very difficult. here is an example of the amusements of domestic life. this is a page from martha jefferson's journal and you see this lovely doodle with the birdies on a branch and historians have loved that but i took a look at it and i thought what word appears on these pages more than anything else?
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killed, killed, killed. we are deep in blood at monticello, and if you read the book, you can find out about that. well, i guess my most interesting conclusion out of this sort of a thing that really made me feel as if this was a book that people would want to read is a question about how we deal with thomas jefferson's interracial family because there has been so much energy put into denying it. and i guess i want to say so thomas jefferson had a complicated family. why would we want the most complicated man in american history to have a simple family? does anybody in this room have a complicated family? [laughter] i think if we give up the story we get something that is a lot better and we get is a founding father for all of us. thank you. [applause] >> i'm sure there won't be any questions about that.
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our former author is floor of trombley. when she walked in i was going to carper. [laughter] dr. trombley attended pepperdine university at age 16 and after graduating received her ph.d. in english. while in her ph.d. program she discovered the largest known cache of mark twain's letters to date. she has appeared in the pbs documentary. she is the author of five books, three about mark twain and putting mark twain in the company of women. the most recent book she's going to talk today is the other woman, the hidden story of his final years, and she's going to call the other power plant. we are having a technical moment. >> thank you. it's great to be here, and i appreciate your interest in all
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of our work. if you recognize the guy up there, that is exactly what he wanted. in fact they are all part of his plan, and you are just helpless purchase participants making sure he remains one of the most iconic writers. when i say that i don't say it likely to read in many ways we all live in a mark twain world and it's a lot easier if we just give ourselves up to it. the woman standing next to the plane is isabel and she is the subject of the biography that i wrote, and she was a very interesting character and possessed an enormous amount of power over her subjects. now, when most people think of mark twain, this is who they think of, this is the face they see and if that is true for you that is the face that he wanted
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you to envision 102 years after his death. and he was absolutely determined that she was going to write the piece ends of his life for you to remember whether they had any bearing to reality or not. as when you try to work with a speaker that is so well known and so beloved and spent the last decade of his life working every day to create his own edifice and legacy as a boy of rigorous difficult to come in and try to collect a leader because no one else was never supposed to figure this out. so what that means as i spent 16 years to figure out his last because he's an awfully good writer and it's hard to pierce that. so here are some images that perhaps most people are not so familiar with is tween as a younger man he considered himself to be wildly attractive.
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about 5-foot eight, she had red hair. here he is the naked mark twain. you don't often see this photograph but here he is posing for a bust of himself. he rarely blocked by a camera without stopping and here is the young 20 and probably the one that most people have never seen before, and this is a photograph that he took of himself just before he left missouri to work as a journeymen printer and traveled to new york. if the clothes look ill fitting that is because they were not his. he was so poor that when he went to have his photograph taken the had rental suits that you could wear so that he could look nice triet here is between i spent 16 years trying to get to. there she is. it was very, very difficult to try to pull back all of the different kinds of stories and fictions that he had written, and the purpose is so that you would never meet this person, and isabel came to work for him
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in 1902 before his wife olivia past week. at that time he was the world's first global celebrity. no one was as famous as mark twain, and he had traveled the world by this point she was wearing his white suit pretty much 24/7. he was very astute when it came to branding himself and his family could never keep up with the correspondence because everyone wanted mark twain for everything. so she was cited as a social secretary. in 1904 his wife olivia past week. up until that point in time, isabel always lived outside of the home as soon as she passed, she asked her to move in with him and she lived with him for six and a half years and she kept a record of her time and what he did on a daily basis how she was feeling and what he was eating and what he was reading in who he was seeing.
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his thoughts and expressions, and isabelle was determined to remember should be part of his life. however at a certain point, she was equally determined she would not and so for those of you that might be thinking about legacy, how would you want to be remembered 100 years into the future? i will tell you what mark twain did and you can decide whether you want to often. first, you hire your own by augur. and you make them financially dependent upon you, which is exactly what he did when he hired elbert. he even had him live with him. he drank with him and he paid billiards with him and round up a building his house next to him in storm field connecticut to get he wasn't about to write anything that he didn't approve of and in fact correspondence still exist where he would threaten him. he started to read things or have access to letters he wasn't completely comfortable with. so lesson number one, your your
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own writer. lesson number two, write your autobiography which he did starting 30 years before his death. she was slipping his life as if he was recounting his life, and the first volume of his of about murphy was published last year and it met with a great critical success in fact on "the new york times" best-seller list it was ranked higher than keith richards autobiography and i find that interesting cultural moment. good for us. however, in the autobiography which by the time the third volume is published, you will have access to 5,000 pages of mark twain over half a million words, and as he was dictating the biography, she made it very country clear. this isn't about my life as it happened. this is about my life as i wanted it to be, which is a great strategy. you are always right, you're funny, your kids think you for
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your advice and this is what he left for us to read. at that point in time he thought that his only real competition was shakespearean he knew shakespeare wasn't coming out with anything new. so, that's why he put in a stipulation that this had to be published 100 years after his death. in the last thing that too, and this is crucial for you. there may be people who know you to welcome people who know your secret. you don't want anybody to know about this. so, do what she did. he wrote a 475 page black male manuscript about this woman. and this is the lost manuscript that he wrote in his life. he spent his last months writing for hours and hours about isabelle. he gave the manuscript to his only surviving daughter, clara come his mittal bader if you ever try to step forward,
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published this and it will destroy her. and so she went and met with isabel and said no. but if you ever try to have a role in my father's life and any claim of relationship to my family, this will be published. she was so terrified she actually moved to canada and lived there for awhile. so this manuscript was something that the scholars never could make any sense of and does not agree with any of the other documents he left about his life and so what his scholars did for decades is ignore it because it really didn't fit into anything else that was being written at the time and so when i wrote my first biography, i started to hear bits and pieces and i became intrigued with her and then i ran across the writings are kept at the project in berkeley california and realized is the treasure trove no one has
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ever done anything with and i couldn't figure out why. as it turns out, until she died in the early 60's, no one was to know of this because actually is a well stipulated that all of her papers remain secret because she was convinced that if she found them, she would have them destroyed. and so, you had this blood feud that existed decades after his death in 1910. however, once the writing became public so to speak first scholars to look at, because no one really knew much about her and there was also a gender bias because she was his secretary there was the sense that perhaps she didn't have all that much to say after all so i decided once i became a little more familiar with her and saw her papers that i would transcribe them and publish them and the 50 scholars would be very happy with me. however, has started to transcribe the writings i realized that there was an alternative narrative that was
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emerging and that she told a completely different story of his final years and was a very human story, it was the story of a family that really couldn't deal with the weight of his celebrity, his little daughter hated her father, she was utterly estranged from the point she was five months pregnant with his only grandchild she refused to tell him. the youngest daughter was ill and suffered from a policy and died as a result tridymite a time there was a huge stigma associated with adel si and nothing could be shared with her disease and in fact she knew too much and didn't want that more human side of him to emerge. she was more satisfied with that figure that he is left for all of you and so it was a really exciting journey for me. i learned things that were utterly unexpected and also talking about family secrets
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this was a secret that has been actually remained intact for almost a century after his death so he would be thrilled that you are here because you're supposed to be here in mark twain's world today he would be less thrilled that i am here. [laughter] but he is dead and by not and i would tell you all of the secrets. thank you. [applause] >> if you are weak enough to ask questions about secrets, silence, shadows, y ase come etc. we are being live streamed up on c-span so they've given me a microphone. we are going to probably ask you to do your question by a microphone and if that becomes an wielding if you can keep it a brief question i will just repeat it into the microphone.
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does someone want to start? >> i would direct this to all of authors. how successful do you feel that you know what they were thinking >> i think that is a hard question to answer because these guys were good at trying to obscure their feelings from us and this is exactly what laurel was talking about. in the case of jefferson, rather than writing, he burned. so, what you had to do is go through every piece of paper that he left behind and try to look for the patterns of burning, and it was like a war shot contest. so yes, to a certain extent when somebody is trying to hide things from you, you cannot have certainty about what they are feeling and what they're doing that you can deduce both from the kind of things they choose not to leave behind so that they are highlighting other things,
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and also, from all of the behavior that they do i feel very confident that i know how thomas jefferson felt about the women i wrote about and some of the time because he was writing to them and about them in other cases because he was acting in particular ways that let me know. he freed all of the children that he had with sally hemings. they were among the only people that were freed in his will. most of the people that he owned have to be sold to pay his debt. i think that knowing that tells us a great deal about how he felt about sally hemings so we can get all kind of evidence to find these things out. >> i don't think it is too hard to find out any one that puts in the kind of leader that mark twain did in order to fictionalize his life was someone who was deeply insecure and his determined that he was going to be remembered in a particular way. i think what the surprise me is learning about just how driven
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he was and he was driven by fear of hitting if he wasn't going to disappear. he was going to make a name for himself and was a name for ever more. what i was surprised about was how there didn't seem to be any boundaries for him. she was right to be remembered as the greatest author, the best husband and the most loving father and he didn't care who he had to destroy in order to make sure that this was going to happen. and at the same time, i have to look at what he managed to accomplish with a degree of all respect and fear because he was so extraordinarily successful but doing so, and in fact when i first published this book and there was a lot in the book i haven't mentioned to force his daughter into a loveless marriage she did all kinds of things. the community's was quite a think disturbed by what i had written because there was a
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sense that we shouldn't speak of those things, and i felt it was first as a biography incredibly important we talk about these things and i also felt it gives us a dutch better perspective than we've ever had before to read it's important for the whitewashing. >> i was interested in why of scum and what i never could understand was why ellen willson tolerated his eighth year relationship with mary peck. i have a fury that maybe she just wanted, she believed mary was a family friend almost immediately after the relationship began she had woodrow wilson visited mary at her hollen massachusetts and mary was actually the social hostess in bermuda, and mark twain was there. there's a picture of mark twain,
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the girlfriend and woodrow wilson, that i felt i was rather funny. i can't wait for the next volume to see what they had to say about them but ellen and wilson defended her and pretended that she was a family friend, and accepted discuss and i just have all these furies i'd love to test them but there is absolutely no evidence. the summer after she discovered the intensity of the relationship and woodrow wilson has female friends and she encouraged that because she wasn't very high spirited. woodrow wilson again surprisingly enough was extremely high spirited and he loved to sing and dance and tell jokes and lyrics and she wasn't like that, she was a very studious woman said she encouraged friendships, but she knew this one was different, she was much more emotionally involved. so all of her letters this summer after she discovered this are missing to refine sure she
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destroyed those. it's the pattern of things that are missing or very eloquent. but, i think she wanted to try to protect him from scandal and in some ways woodrow wilson protected himself from scandal by that image during the campaign of 1912 when theodore roosevelt was running on a third-party ticket and william howard taft was running people came to theodore roosevelt and said we have letters between woodrow wilson and mayor retek and if you publish them, you will win and roosevelt said no, that would be wrong. [laughter] as though nobody would believe me triet he's going to think the man as romeo, he looks like the apothecary clerk. [laughter] >> great. okay.
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>> there's one word, denial [inaudible] it would happen so thorough that they just didn't recognize that these other people were relatives. >> you know, that's something that i spent a lot of sleepless nights wondering about. and i think that it's possible that in some cases you are able to convince yourself that what is right in front of your eyes isn't true. if you are interested enough in that story. at the same time the people that
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you are looking at who when they cocked their head, the kid that is carrying out your bed can or will ever come in your chamber pot, or making the fire in your room, they cocked her head and looked just like your aunt martha so there will be these moments use your children's faces changing before your eyes, and suddenly you see these characteristics and you just look over. i think these are eloquent moments. they were very effective in this the model. but at the same time, that the enslaved side of the family, and i say enslaved although they were enslaved for two generations for the rest of their history, they cut to that story alive. so in order to tell yourself this isn't true you have to be actively denying something that somebody else was saying so that is really in fact you have to
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decrease that legacy and the same way that twain did the descendants of the rebel side, the legitimate side made a point of hiring the right biographer to tell the story. they gave the official story. this became the officials repeated pulitzer prizes have been won on that story, and it has taken until really the dna evidence of 1997 so that the weight of science has weighed in on the side of the family story. but this is something the act if we had to be my for years comes of the idea that we just didn't see it, maybe you can say that to yourself a even as you are saying they are liars every one of them is a lawyer. think about that kind of a complex psychological exercise and you have human beings stem a tide of think they were in denial, i think they were in a cover-up which can be quite different. they did not want other people to know it, but i think one of the reasons that ellen willson
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tolerated his friendship with mary peck is that she knew her husband and felt he needed this woman in his life and love him very much and was willing to tolerate it. the second wife was not so tolerant and confessed the relationship to her. he described it as a relationship that he had long ago wove and repented. that kind of language makes me think there was something to lows and repented although there is no direct evidence of exactly what was going on. but she put an end to it. but i don't think they were personally in denial. - did they all knew what was going on. estimate is a great richard pryor joke i feel compelled to share with you. on deutsch to tell this joke in bed with another woman and walks in and seize this very upset, runs off site and follows her
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and she says how could you cheat on me? he says i wasn't cheating on you. what you mean? are you going to believe me or your office? [laughter] so, there's the question about the lobbying always, and so to make sure you are going to believe him whether it is true or not, but isabel was very transgress if so at the end of her life she was determined she wasn't going to be lost forever. as i said, she secretly a range for her papers to be kept at the archives making a secret deal they would be kept in a locked room so she could never find out about them. she had also come up and had written a transcript of her writing again based on the assumption that if clara pass refers to could be published but this is a bill passed away she hoped someone would indeed publish those for her but that never came to pass, and she passed after isabel but one of
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the most important things she did is in the 50's she held a series of meetings that the young actor who at the time and was thinking of creating a one-man stage show about mark twain but she had all the stipulations for these meetings to take place and he had to come to the apartment and could never tell anybody about the meeting and how holbrooke can and met with her and he has now been doing trained longer than twain did twain and its what isabel gave so she taught how he walked and talked and delivered a joke to risk and it isn't it amazing story. in going to have to repeat the question because it turns of this microphone is bleeding into the other room, which is getting more questions for completely different authors. [laughter] [inaudible] >> the question is the purpose of time that mark twain was in
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paris. she loved year and often visited europe. i'm not sure what you want me to sit about it but he loved the parisian way of life and he was a man of letters and he had many friends, she first went to paris when he was on the first and first highest tourist trips to you're not coming and he wrote about that in essence a broad, and in the innocents abroad that is where he stood to perfect the persona mark twain who was a kind of wisecrack westerner who would make jokes and you were never quite sure whether he was making fun of the character he had created, himself, you, the parisians, credit like a fun house mirror and i will paraphrase here she said i never could quite figure out of those french. when we were there we would speak french to them that they
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never seem to understand what we were sent. if [laughter] >> [inaudible] continuing saphenous paris, did you include maria in your coverage of jefferson? >> you know, my original intent is her section in the book because this is the woman, the anglo italian artist and musician jefferson was in love with when he was in paris and of course all of you saw the def less par trail y nick mills -- nolte, the worst decision of hollywood, right, merchant and ivory should be stricken from the record on that 1i think, but , so i actually went to italy to the archive which wasn't anything like the library of
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congress, you know, they are kind of leaning against adult and the cobwebs are getting down and this is a historian stream to get into a place like this and i had to do with an italian friend and was a great, it was a kind of mysteries momentum and i did write a lot about her in this book about my talk about the women jefferson loved i think that he was in love with her but i don't feel like he had a sacred obligation to her in the way that he did with all of those women of his family. and so, she becomes the kind of a figure in there who is almost a full leal in some ways to the relationship he had with sally hemings because maria i think was too much woman for him or too much public of a woman. what's interesting is the way in which their lives got more a similar because he treated her
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as well bag. if you've seen pictures of her famous self portrait we now have is only like a tintype but in the action was done by somebody else and so we've lost the painting there's a self portrait of her when she's young become a very beautiful woman, and he treated her like somebody he didn't have to take very seriously but she was a very serious artist, she was a very devout catholic who altered to leave you ultimately found at religious schools for girls and she was made a baron as of the austrian empire because of her good work and educating girls and when it came time to educating girls, thomas jefferson said you know, i on the subject of a female education it's never been a subject of serious contemplation with me, he said, but i decided i should educate my daughter's above their sex because i calculate their chances of marrying a blockade of 8-1. [laughter]
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and if you read the book that happened several times, the cltv has had a question -- this lady has a question. >> [inaudible] twenty, 21 years. estimates of the question is about the state of biography when we and a longer have letters. the one to start with about one? >> i will come and i'm sorry about that, i do think obviously it is easier to work with letters if you can get a hold of them, but i'm glad that we have e-mails because it was looking there for a while as if everyone was going to communicate with
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everyone else will telephone. >> and now i hear much more frequently for my children by e-mail and text than i do by telephone, so they are not going to be as full and edited the correspondence between eleanor roosevelt and isabel and green light of arizona, this woman did a 50 year correspondence in the early days they didn't really have anything else to do and they would just sit down and write these letters and we probably won't have anything like that but i am glad for e-mail, which looks like it is going to be archived somewhere on some plauen forever and 20 keyword searchable and retrieval indymac chollet modestly encouraged by the advent of electronic media. >> i agree i think there is a lot of information out there. in fact come since it took me so ridiculously long to write this
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book i actually crossed from one year and into the next. i started this pre-cyberspace, and when i first started to work on this book, i have letters few archive. i read thousands of pages looking for one thing in particular and then all of a sudden in 1996 you have the web being invented and so much material is digitized now that when i'm looking for someone, i can just go and hit the finding and search for "the new york times" from 1908 and i can have that kind of information retrieved. as president of the kawlija talked to my students quite a bit about, you know, keeping in mind that what seems wildly amusing today to post on facebook at some point may not seem quite so.
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so, in some ways this is a real gold without any of the boundaries that used to exist between private and public space. so i think it will create challenges for biographers but i don't think that there will be a dearth of federation it's just a different kind of information. >> i think our tools are going to get almost too good. so when christie says things will be archived on the cloud you may think that you deleted that e-mail but they don't go away, right? we think several of the central mission goes away but it is retrievable at some point. if i were a elizabeth if i could find out anything i want to know about anyone of you. so, maybe in the future there will be tools for biographers that can make everyone her own, and we will be able to -- sorry, but maybe we ought to go back to writing letters we can burn.
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[laughter] >> back there in the gallery. yes. >> i wonder if you can speculate on how they would feel -- >> i think that's an interesting question. how would the wives, daughters, jefferson's daughters, how would they feel about their lives being held it? >> in the case of the wilsons, they were presidential families come and wilson came after theodore roosevelt who was the first american president whose daughter was a celebrity and i think that his wife tried very hard to keep in the shadows and helen taft wanted very much to have recognition, so i think
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that even had they wanted to, they had already given up the great deal of their privacy of the time to read and has said, they did take steps to burn letters to read a great friend of woodrow wilson bought a lot of the mary peck letters after woodrow wilson's def, and he kept some of them and put them in the library of congress but he also burned a lot of them. so, i have a feeling of what ever they left, they knew it was going to be there and they did know that their family would be in the public scrutiny forever. >> i don't think i could have written this book had any of the descendants still been alive. his only granddaughter kimmage suicide in the early 60's, and so there are no more direct descendants. his daughter would have immediately sued me and he instructed her to keep lawyers
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on retainer to make sure that the story was never changed rothkopf. the past is past, and when i was doing all this research, i pulled called her grandnephew and spoke to him and they were furious about the things that he had said, and he was 85 that time to get he is still alive and well and just stopped playing softball. i went to meet with them come and for that family it was such an open wound, it was as though this happened last week. they were furious at the scholars and really felt mistreated, and so i talked to them about what i was doing and earned their confidence, and when my book was published, his
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daughter called me, and things get free crazy because it is a huge figure and there's a kind of madness if so i was concerned with the inaction might be and was the first of my book tour in atlanta she said well wife read the book and this is what i have to say to read somewhere in heaven is a bill is looking down and she's smiling he finally gave her her voice back. and i thought that is a great sense of my having done something for the record. >> i think it varies from a woman to woman. some of them wanted to keep their lives private as much as possible and i think for example martha, jefferson's wife, was very much a private person, and that she did not anticipate the wall of separation between his public and private life would better be breached. it's a phrase we know he used
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adult church and state that was true how he felt about his public and private life and i think when the wall was breached during the revolution when wallace came boiling up the river and out to the occupied which was the place that she loved this was a terrible thing to have the public and private life come together. so for her i think it would have been a difficult thing. i think for some of the other women in the story commensurately for his moderate think that his father never anticipated that her story would be told in no way that it was. she died in march of 1776 so he wasn't even the thomas jefferson we think of as thomas jefferson when she died. he hadn't become that guy had yet. but when you talk about his daughter, patsy course of his granddaughters, it's a different story to it i think they wrote letters and expected to be preserved or to preserve them in their own edited fashion. the road every literary letters and with some expectation this
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would be a legacy for them and a couple of his granddaughters were just absolutely, you know, they really would have liked to at one point when the family was broken his granddaughter said i wished i was a man because i could do all kind of things to save the family fortunes that i can't do being a woman. what we should start a school. at least we could do that. and in fact they did in that kind of saving some of what they had died the women starting a school as they were doing at that time. so it's going to vary from person-to-person in the same way that over the generations i think things change from a point of view of their attitudes towards relationships between masters and enslaved when so that the jefferson's fifer think is more accepting of the idea that men in her family might have these kind of extramarital relationships and by the time
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you get to the victorian granddaughters, there to become the original vision that kentucky is the moral and possibilities in a way that their grandmother would not have recognized. >> we have time for one more question before we follow their defeat to the authors to the signing. yes. >> what started you on these books? >> excellent question. what is the spark that started to on your decades long journey for the books? let's go in opposite. >> when people ask me how long i've been writing this pricing i'm not sure, it might be 50 years or it might be five because i love thomas jefferson as a child when i became a historian of women working with karen anderson, i was interested in writing a dissertation about jefferson and his view on women and the women in his life, but all of my -- karen and others said jefferson, he's been done to death. so i kind of put off for a long
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time and then after i'd written a bunch of other things and four mystery novels and have an agent that took me to lunch and said i'm ready to start paying attention to your history, tell me what book. >> so spark and burned. >> as that moment. you've lived for somebody to ask you that question to be on didn't even know i wanted that question, and i said i don't know. >> i guess it was a series of odd defense that kept popping up that made no sense to me and completely deviate from the narrative of the final years, and as i kept doing research, more and more of these strange episodes kept coming up, like one of the things i learned is that clara never told her daughter to her grandfather was until she was in her 20s. or that she had never directed a monument in her father's honor until her first husband died,
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and then she chose to create a monument honoring them both and called her father why his pen name or the fact that when you go to the clemens' plot in the cemetery, the second husband who has my favorite title of anybody come an itinerant russian gambler and musician -- 20 years younger than the life she was the first tudor you could argue. >> his grave has no marker. one of the things i heard this that's because they hated. and all these weird little things kept popping up, and i thought none of this giants including the 475 page manuscript that makes sense in the context of the other story so i decided i read a lot of nancy drew when i was a kid and i was going to figure this out.
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.. who is leading us to define an area? there she is. so we can follow out there is like the pied piper. thank you so much for being here.
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in the u.s.a. itself horrendous dining area, which is dining area we are attacked, so we hope to see you out there. before writing this book, dan has been a writer for "the new york the "new york times" since 1989 before that she was a writer for affairs magazine, it was your correspondent for the "philadelphia inquirer" in investigative reporter for the trenton times in new jersey. in 2005, she's a finalist for a pulitzer prize and won a george polk award, the worst for investigative reporting and herbert goldsmith prize for her cds exposed in insurance and investment ripoffs of young military consumers. she's also a member of "the new york times" team that was a pulitzer finalist for its coverage of the 2008 financial crisis. "wizard of lies" is her fourth book. it may be her first baby. hbo and robert de niro tribeca films have commissioned a smith being written right on this too at the end of the month. so keep your fingers crossed for
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that one. [applause] and now, let's welcome him diana and recount. [applause] one game that is wonderful about this book is if you really are very unfamiliar with wall street come with the markets, hedge funds, with bernie madoff, it is a book anyone can understand. however if you are someone who is a sophisticated investigator and hedge fund manager, you will enjoy the book, to and won't feel that it talks down to you at all. so today we'll talk about bernie madoff, who he was, what he did or we don't want to leave anybody behind. so if you're not familiar we will start with who is bernie madoff, what he did and i think importantly why he did it. what he says in the book is that he really did intend to be a
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great financial advisor and he intended to get great returns for his clients and he just banged things got going on and he dug himself and he said julie couldn't get out. so i think to get your take on that. >> that is a classic ponzi scheme rationale. >> in fact is usually true. i ponzi scheme is for a typically and lasted themselves, thus the first big via ponzi scheme or has to sell this to himself. and they almost always ironman. i don't know why, but you can count on two hands the number of female ponzi skimmers. so i'm using my pronoun advisedly. i don't know if madoff is telling the truth about that. i do believe the ponzi scheme he constructed begins sooner then
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you claimed it did. but his story, that is footnoted was least reviled source in history, but his story is that some of its large client got nervous after the 1997 market crash and started to make with draws the fun they had promised they continue to invest in that preston and preston back into a corner and in 1992 he finally started stealing a little money coming in from hedge funds to cover withdraws from long-term clients, thinking the market would recover in this strategy would work in and he would be able to work his way out of this hole. by 1998, the whole was billions of dollars deep and he said he knew he would never get out. and he spent the next decade to
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expect dean to fall at any moment and dsa describe and trained to it almost did several times. so this is me not more cliffhangers then pauline. showing my age they are. he had so many near death experience as in fact that i'm convinced that at least for most of 2008, when the markets began that precipitous climb, he thought he might make it through this storm, to because you dirty survived so many. if i was highly liquid. this was their liquid asset. whenever i'm in the market started to get so nervous in the fall of 2008 and demanded their
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money back or they're going to get the money to pay those guys back. a lot of those are not liquid. they're locked up in chinese for mankind than he ariz real estate developments. but they had to cover these withdraws. they trusted him. he was their rainy day fund. he didn't start pulling money out because they suspected something was going wrong. instead, they thought he was a trustworthy place to take the money out of. money poured out in an astonishing rate. by one estimate from the trustee was liquidating the madoff estate, $13 billion poured out of madoff stretched on into destiny. half of that in the last 90
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days. he was circling the drain very rapidly and told me that he knew right after thanksgiving put through the least reliable source in his dreams that he had decided rather than to try to keep it going one more time. he claims people were still offering money and those latter days, still trying to give them money to invest and he could've kept it going, but he decided to quit. but that i think made off hasn't pathological fear of admitting later it's interesting that he won't even admit that his ponzi
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scheme failed. no, no, he was inspired he quit. but when he was arrested, arrested after his son whom he had confessed turned him in to law enforcement, what they found was a man who was privately quite secretly managing more money than goldman sachs. more money than jpmorgan, much more money than george soros. this is a man who was allegedly managing almost $65 billion. so imagine that he was your money manager and he went to bat on december 10, 2008, thinking your retirement fund was a billion and a half, 2 million, 7 million, 10,000,002 see-through retirement and by nightfall on december 11, it was all gone.
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it's like what happened in tales. it is what happens in the made-up scandal. i knew early afternoon on december 11 that madoff had been recognized. it is a name i recognized. had this not happened he would've been a minor footnote in history and the formation of the modern and the counter markets. then i saw the headlines. how big are we talking about here? he said he was. anyhow not.
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this was such a profound trail of trust by him and then he was indeed per trade. i felt there is something universal about it. by any measure, it is the largest ponzi scheme in history. whether you count the $65 billion in paper wealth of people thought they had the day before his arrest for the $20 billion in out-of-pocket cash all, the amount of money people it given madoff in terms of dividends or withdraw, and is the largest in history. it is also the first global ponzi scheme. the victims included funds in
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korea, catholic school in st. croix, victims all over the world so it was historic by every measure and i think had some timeless lessons for us. as you can tell, i am obsessed by the story and it is one of the most interesting criminal cases and one of the most interesting human dramas i've ever encountered. >> it is often said of ponzi schemes and the people that spend that they played a role that human fate. but they were greedy and should know better to exercise due diligence but a lot of investors with madoff or financially sophisticated people who thought they were exercising due diligence. so let's talk about the role of trust in our financial position. >> now someone smart in the audience will stand up and say, you know, does it dims were
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greedy. if they had been greedy they never would've gotten caught. now one of made us brilliant innovation in the ponzi scheme is he did not appeal. 100% in the money is a classic. you'd have to be crazy to 5% being like that or it has to be creepy or ill-informed. but made-up wasn't making that. it was under forming the fidelity of magellan. let me say that another way. is that dems would've made more money by investing in the magellan fund and they made in investing with bernie madoff. they were greedy. they were frightened.
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the market had become increasingly volatile from the increasingly complicated. everyone is trying to run their own 401(k), their own pension plans and their spare time with him make the money to put in a and madoff offered consistency, not high return. so that is another twist of the night. his big dems are people who thought they were beaten more conservative than anybody else, you thought they were taking less risk than anybody else. they were going to give up the money they might have made in the magellan fund in order to be safe for bernie madoff. it is not true that ponzi schemes always that denies. madoff understood the times are volatile investors are straight and are desperate you convict denies. a master worries right now is
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that in this for the interest rate environment, those trying to save for retirement on a half of a percentage point are going to be scared about what to do with their money, how to make money and they will be vulnerable to the next bernie madoff figures that if they don't offer you the sun and stars just 2% a year. that's all. so the notion that the ponzi scheme has always been an outside personality, not true. the concept of ponzi schemes are always greedy joe wyatt madoff teaches that there's a lot of what we knew isn't true and that is why we need to learn about this ponzi scheme were not for
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us actually long time and if ira kraken wanted to know how to do it, i might take some pages from bernie madoff's story. i think it is important that we know that story. and when you read the book to be really struck. it's an incredible amount of hard work and creativity that went into sustaining this thing. "wizard of lies: bernie madoff and the death ofbernie madoff at deputy right out of high school and became really this computer wizard. the two of them set up this incredible amount of trickery. i just want to read a passage to show you what i'm talking about. there were two stories in the media. one was a publication for a hedge fund managers. one was then parents magazine. the book question made out and a
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lot of what he is saying doesn't make sense. a lot of things that he is saying he is doing in the market, for example, there is not enough money in the market. it's not possible to what he is saying is true. so neither of those got a lot of press. they're pretty obviously knew about them and was concerned and he called one of his biggest investors and he depend on for a lot of money. it had the guy come over. let me show you how i do what i do. his name is tucker, the guy who comes over. kentucky arrived for this visit, madoff was ready thanks to his efforts. besides the phony trade confirmations and account statements generated for more than a decade county set up a bogus trading platform to make it appear as if actual traits were conducted with european counterparties good of others
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perceptible traitor was an employee on another computer terminal hidden in a different room and he is a clincher, a paratroop that all the stocks he claimed to have purchased were held in made-up account at wall street central clearinghouse. the depository trust and clearing corporations officially called the dpc p., but informally known among veteran traders as the dpc. this is the acid test for the masterpiece come a computer simulation of a live feed. here taking care to duplicate the clearinghouse is loco, page format, printers that and paper quality of the report. of course, those counterfeit records would always verify that the required number of shares for their innocent cow, safe and sound. so how could you not fall for the clicks it's terrifying. >> it seemed to me that all that absurd to put into legitimate
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trading would have produced the money. their creativity was really quite astounding. when people say folk should have known, i will give them that the statements will the little crude -- customer statements, not days. these reports provide up and exactly what a man like tucker would've dtc. but he kept old letterhead stationery from his earlier address is an old electric typewriter said that if he had to create an authentic looking document to satisfy regulatory query born accountants query, he could do so. he could get the old letterhead, have somebody type it out and stick it in the file and answer whatever questions that that would have to come down the pipe. dipasquale, his first big raker was in 1992 when one of madoff's
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early pick can do is, to account so i called up for contract of the story he could not make characters i've played this were fiction if they tell you, but these two characters have been sending money to madoff for years and then they got caught in 1992. this is one of his first big crises. and they supposedly at $440 million at the sec told them to hand it back to investors. well, madoff stole the money from another account, give it back to these investors. they'll promptly wanted to invest with madoff again. that these were the only people of god none of this ponzi scheme with all their profits and locked away safely, but the sec made madoff give the money back. all the earnings, all the prophets, if they just locked
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away. but they didn't. they wanted to come back and invest with bernie. but these two accountants only had six accounts. and through the six accounts, 3500 people roughly were investing. one outcome of ernie has 3500 people who want to invest. 3500 accounts. what does he do? feed is a new ibm computer. deepest values is a very simple mailmerge software program to create a program that can allocate a given set of trade across all of this account space on how much money they had and generate the thousands of account statements they made off now needed to produce. that was when he'd really automated his ponzi scheme. this is a man who helped automate the stock market, so it helped automate the ponzi scheme as well.
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>> it's often said a good rule of thumb for financial positions as if it sounds too good to be true, it's probably true. but this goes way beyond that and have a different take on it. >> every writer has some thing they wish they'd read that somebody else did. this is one of those. it is the most brilliant insight into the modern come and that to say, the madoff ponzi scheme. if this sounds too good to be true, you're dealing with the name is cherry. think about it. a professional nose to make it sound just good enough to tab to, but not make it sound too good to be too. and madoff was vaporetto. he never made it sound too good to be true. a smart ponzi scheme your while. so if you think you can defend yourself from a ponzi scheme or by staying alert to anything that sounds too could be true,
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back as an amateur. look at caught long before he gets to you. it's the pros who will make it sound just good enough to sound attractive, just good enough to interest you, but not so good that your red flags are going to start waving and your alarm bells will start going off. so that is another one of those lessons i think we need to learn about the modern ponzi scheme. >> any venue were taken in -- not financially, but -- >> i did, i did. just to give you a sense of how persuasive he was. i interviewed madoff in prison. i was the first journalist to be able to go interview him in prison in august of 2010 and a deal that the lawyer insisted on was the interview with embargoed for this book. he didn't want it thrown out into the media if there is a media firestorm engulfing his family at that point he get water fluid poured on the fire.
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so that was the deal. i will talk to you, but you can't use any of it until the book came out. i agreed, but a sad, it's a two-way street. you know, i will embargoed this material for this book, but you can't then go get this material to other people. you can't do other interviews. yack of course not, of course not. i waited 18 months to get this interview. bernie assured me in writing by e-mail subsequent, don't worry, diana, i won't let any other interviewers get ahead of this book. but of course he was lying. on my second visit with him in february 2011 i found a reporter from europe magazine. i unfortunately found out about it. i have very good sources and i confronted him. i said what are you doing? we had a deal.
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and he told me why he was doing it and maybe i misunderstood our arrangement. i did misunderstand anything. and that is from a second interview showed up on the front page of "the new york times" the next day. it is embargoed for the book when you are serving the embargo, but sure enough, said the the deal is off. and i was very agitated about that, but as i was racing for the prison to find a computer somewhere at the airport for the next day's paper, it occurred to me that i had actually trusted transport not to talk to any other authors. even though he was behind bars as a swindler when he made that promise to me. i mean, can you imagine how persuasive he must've been when he was a genius? he'd give me the insight into how convincing he was that i'm
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almost kind of glad it happened to me because you can understand something intellectually. you can you can type to people and i talked to dozens and dozens of madoff but tends to make tell you their experience. they can tell you how convincing they attacked their widowed mother and ensure that their money would be saved. and it's an intellectual understanding. yeah got it, he was a persuasive guy. what a happy new companies that being said great, bernie is not going to talk to anybody else. and you realize, why on earth did i trust him? whiners that i think he would keep that to meet? can you really understand the emotional magic but a first-class ponzi scheme or pass because that is the nonnegotiable job requirement for a ponzi scheme are. you must be out to make people trust you.
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if you can't do that come you've got to go into another line of crying. you know, embezzlement, bribery, something else. you cannot be a ponzi scheme or if you cannot meet people trust you. and this guy is so good he could make me trust him a little bit when he was already behind bars, so that is how good he was. >> along the same lines, you can't cheat an honest man, so the honest men and women here today, what can we learn from that? what can we learn to make ourselves less honorable? >> and "wizard of lies" commuter couple stories of people who had a chance to invest with madoff. and they were spared. i want to sell you one of those stories. there is a retired businessman. if i told you what retail chain, you would immediately recognize it. and he had angled for six months
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to get into manages money because he had heard so much about him. he had friends invested with ernie. he gets to the appointment, goes in with his accountant. the businessman's accountant. and they said they are in talk a about it. what's your feet kweisi says there's there's no feed, but i have a $5 billion minimum. $5 million minimum. i think bernie made it to many and assured based on who was sitting across the table. but in this case is $5 million. and the guy said, you know, i never get the first time money manager more than $250,000 to start but. the measure if you do well, i will put in more, but that is my limit. $250,000. and diana madoff says you can po an half million but it's got to be 5 million by the end of the year. the guy was tempted. he really wanted to invest in
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the sky, but he had this rule, a good, smart bro and he stuck to it. so he said, sorry, stood up, shook hands, walked out, never realizing he had just dodged a bullet because he didn't walk away because you suspect did when he was a crook. similarly, he chaired the online island had an investment with bernie madoff. dead donors who invested in a new date could be so much more good if their money could grow at a nice steady pace that bernie oscar. but they had a rule. they never invested with the money manager who didn't hold the asset in an independent custodio bank. some independent third party, a bank or trust company that held the stocks and bonds come a
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third-party custodian there called on wall street. so they said well, we only invested money managers to use a third-party custodian and bernie doesn't. could you make an exception just this one time? >> now, we will. so they too didn't invest, walked away not knowing they dodged a bullet. neither one of them suspected diana henriques was a crook. they both thought he was a genius. they both trusted him. but they had rules that were developed to keep them safe from excessive risk and as tempted as they were by this wall street wizard to waive those rules. they stuck to god and were spared. so that is what you can do. you can sit down and cannot figure out what your level of risk tolerance is, figure out what seems to you like a good smart way to manage your money
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and there's the basic commandments. don't put all your eggs in one basket. only invested some money uses a third party custodian or stick with tightly regulated mutual funds and bank cds that you understand and you nobrega leaders are watching like a hawk. so those are some basic rules. you can have those rules. many of madoff's victims have those rules. the trick is don't waveband for the people that you can't trust and admire and thinker geniuses. we all have wizards in our life. the people who think so bright, so successful and so good about debut that you trust them with anything. i mean, they're the tiger woods of golf, the wayne gretzky of hockey. at the george sorenson's coming to peter branches of the magellan bunch. these geniuses were larger than life and of course you trust
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them. well, trust them, but do not weep your rules for them. because that is what will keep you out of trouble. sticking to your rules, even when some glorious wizard is tempting me to waveband. >> just going back for a second, the guy that you mentioned, he is not identified in the book. wouldn't he be awfully proud to say i could not be church by bernie madoff clack >> is exactly the lion and the sales pitch i used and it didn't work. >> is the just very private clack >> yes. that's what i said to them. i said wouldn't you want to know that people should know -- >> he said he didn't walk away because he was so smart. he walked away because he had this will, but he still thought it bernie is a genius. he did not take you as a crook. he if he had discovered bernie
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was occur, i think he would've let me use his name, but he didn't. >> let's talk about the madoff family. his wife, ruth was really vilified from her hairdresser wouldn't do her hair anymore. she couldn't get a table at a few restaurants anymore. his son got a bit of a pass because they turned them into, although their life stories that did comment that you do seem to believe that they were not in on this? >> that is one of the most frequent questions i get is selected the family know? did ruth know? to marker and drew, madoff's sons know? i mean, we sit here more than three years after his arrest. the madoff bank rep trustee has reviewed -- i think there never is right, 20 billion documents that were drawn from the madoff
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firms, the storage area where they left their older records. not one fate of evidence that implicates debut. now one of the five people awaiting trial on criminal charges in the case had implicated bruce, mark or injury. not one of the five people who have pleaded guilty had implicated ruth, mark or andrew. i think at some point i have to say that people who say they must've known prove it. because i do not think that you can. i couldn't. i could not find anything that implicated them and i found a number of suggested bits of evidence going the opposite direction that suggests that they did not know. for example, madoff had a near death patch breaker in 2005.
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the excerpt on the back of the book jacket is from that episode. in 2005. he was facing $105 million redemption. he had $13 million left in his slush fund. if he wrote those checks, they would announce in the game would be. it would be over. $13 million was all he had. he scrambled. he borrowed money to his legitimate firm. move the money and ran back in his slush fund to use it to cover expenses. so from that experience, november 2005 until the following spring, his ponzi scheme is living hand to mouth. it is scrambling to get enough money to cover these regulate redemption demands without blowing up. during that period of time, neither ruth, his sons nor his brother altered their use of company cash is one at all.
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they continue to borrow money from the firm. they continue to use the firm's money to make entrepreneurial investments and capital investments. well i'm sorry. if they are your accomplice and they are down to your last million bucks, u.s.a. family, hold back, right click still say sorry, you cannot take that money out. they did not take all of their money out of their account as some of the employees did. they just continued to views they are madoff piggy bank as they always had. so that does not suggest to me that they knew that the ponzi scheme was in the dreadful peril that of the same. let's look at ruth situation. whether or not madoff was unfaithful to her with the particular people who claim he was unfaithful to her, she believed that he was unfaithful to her.
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what kind of lunatic, which he found a woman who could pick up the phone and call the fbi to cut a pretty good deal for herself, even if she was as accomplished? so that it makes sense. third game. from the beginning, from the date of madoff's arrest tallies deaths by suicide in the second anniversary of his father's death. he and his brother were represented by single defense lawyer. any lawyers in the room? you out immediately twig, did you click the two people are facing criminal investigation, they can't use the same criminal lawyer. why? at night because the various best thing is to roll him over and get a deal. the same lawyer cannot represent under those circumstances. the defense bar in new york knew as the months went by and the
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same lawyer continued to represent our commander that my commander were not facing criminal investigation. ruth was confirmed as an innocent spouse by the irs december 3rd madoff's arrest when she reached a settlement to forfeit all but $2.5 million at the $80 million she had in her own name. mark and andrew continued to use the family firm and were often in dispute with their father, which if they had this guilty knowledge, they should they would've won more often than they did. so i added all together. you'll have to keep an open mind and decide whether i have persuaded you, but i was persuaded that ruth, mark and andrew did not know about the ponzi scheme until madoff
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confessed to them. he by confessing comp by not playing and running off to someplace beyond u.s. jurisdiction that he would heal his family from the kind of vilification and typically that was hurled at them. it was one of the most astonishing things i've ever seen. but he was completely blindsided by the amount of anger and hate that fell on them anyway. and frankly so aside. it was extremely atypical for the family members are white collar criminal of any storage to fall under that kind of attack. to combat it. if you think that to michael milken. you think that to ken lay and jeffrey skilling. anybody remember their children being chased to the streets by photographers and paparazzi quiet though. monsters, organized crime
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figures, mrs. monster? anybody or rather her be dragged into the spotlight? no. the gotti family notwithstanding to speak to the spotlights themselves. that is noteworthy exactly because it's so unusual. so it's not unreasonable for madoff to expect they would be left alone if if he stood up to confess his crime and took the heat. he was absolutely wrong. and what they experienced was a remarkable trial by fire. if you accept that they were innocent and then read what happened to them, i think you'll find it hard not to feel some compassion for at least those members in the madoff family. >> what to think he was? the sheer numbers? >> i thought about that. why was it as a society we are so far out of our normal reaction. i think he was the time. i think it was the anger, the sense of public trail, that
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everyone felt in the fall of 2008. there were a lot of faceless villains that fall. remember lehman brothers -- name one person from lehman brothers. aig had derivative data. well, name one headliner from aig. outside the wall street world, most american citizens couldn't. those were faceless corporations that have somehow brought us to the brink of financial meltdown. and then we have bernie, a phase, a family, someone to be the target of all of their free-floating rage and anger come of this fence being betrayed because that is what he did rudy betrayed people who trusted him. well, that is the wall street did. it betrayed people who trusted it. but he was a ham and they hurt and it then.
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and i think it was the mood of the country that made him so much a target of public rage, rather than anything unique about them. >> broods stood by him in a lifetime. and he and she is still standing by at ernie had better things change. can you talk about that? >> it has changed and i was able to interview with this file for an article in the times about her life since then. she realized that her loyalty to bernie was costing her her family. now, why did she stay with him? the one time madoff lost his composure was when i asked him whether he regretted that ruth had stayed, with garish heat were issued made a different
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decision and they started to weep as he tried to answer the weep as he tried to answer the question. he clearly feels very deeply for ruth and she had left him from first sight at age team. she met him when she was 13 and he was his bronze to 60-year-old lifeguard. he was her home from the party and walked her through the next 55 years of their life. she married him at eight team. she adored him. she thought he was a genius. she worshiped him. and he needed her were shut in a very concrete way. she told me that she just after 50 years could not walk out on him at the most horrible moments of his life.
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it's a little hard for me to understand, but i've been married 43 years. i can tell there's some people out here who have been married longer than that. and she put it to me. she's a predator was a child? what if one of your children had committed some terrible crime? would you walk out on them? would you cut them off and never talk to them again? what would you do? very hard decision. and it was a hard decision for her. made even harder by the fact is she really didn't anyplace to go. think about it. her sons were talking to her. they walked out of the apartment because she is not what do with them, did cutter of. her friends, while they were all madoff pic ends. if any of them are inclined to take her and her lawyers would never let them do so. no one could even speak up in her defense in public without being vilified. so she really had nowhere to go.
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as she walked out on him she was essentially homeless. and she felt compassion for him. so she stayed. finally, in the early fall of 2010, she realized he was going to be impossible to reconcile. as much as she tried to reconcile with mark and andrew, and they refused to see her if she can to need to visit bernie. they spoke by phone quite regularly. she did not visit them that often because it is a long, long trip from florida where she was staying near her sister to north carolina. so she went to him and told him, i can't see you anymore or it will cost me my family. i have to choose. i have to stop coming here and you have to help me stop. so she attempted to pull away that fall and he kept calling.
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change your phone number. he kept trying to call and then she learned about her son, marks, suicide. the last time she spoke to bernie made us was to call him in prison and told them he was dead and she is not spoken to him since. so he is truly estranged from her in an absolute way. she is not spoken to him. she has begun to reconcile with her son, andrew, add she is hoped she would. but that was a very difficult decision and i am loath to be critical of her decision without standing in her shoes at the time. think of how not pressure she was under, how completely dispossess she was. i don't know if any of you follow publicity about the madoff options for the u.s. marshal auction off their
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possessions to raise money through some of the options should have been auctioned off. should attend and a half carat diamond ring. the homes -- you saw those. obviously the u.s. marshal service auction as a pairs of her pantyhose. her use geocode close. all of the moisturizers and shampoos from her bathroom cupboard. i can prove it because it's in the inventory that the u.s. marshal posted online. she was that utterly dispossessed. old pocket books, used shoes and boots, all of it scraped out of her house, put on display at the brooklyn navy yard and auctioned off. so i haven't been through something like that. i haven't experienced what she experienced in so i'm a little vote to question her decision. she had been somewhat not
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pampered person although certainly they had great wealth. they did not let that plutocratic levels as many we've come to know them. at the very, very wealthy. a little naïve, you little innocent and utterly unprepared to deal with what happened in the aftermath. i'm inclined to say and not sure what i would've done in their shoes. i just thank god i wasn't in her shoes. there is one body you should have, could have put a not to bernie made up for that is the security exchange commission. the book on that day in a detailed what the fcc to investigate madoff a little bit. two would go investigate and then stop and i would really file the report orinda shared by many would investigate a little bit. so this can sort of close a bunch of times some of the no
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one knew the others are doing. so after the whole thing unraveled of course they started taking it very seriously. and i'm an point in the book some fcc inspectors visited present and they want to know, how to deal with them for so long? and so i just think this is a really telling part of the book. the attorneys talk about the sony account statements that he generated for years and years and madoff of jackson says they were billy sony account statements. so the inspectors are sitting in credulous so there is upon us and then madoff says i can see how you might view them as false. but when i read that it really made me think about the phony war heroes who by the patches online and go to the parades and they do it for decades and decades and after a while they
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believed their own press. i wonder if there is some of that with trained for. do you think you really believe to is this genius of the world body was? >> i really do. as i said earlier, the first lab on the skimmer has to tell us to himself. the light he can somehow get away with it or he will somehow work his way out of it. the live is that at tcs, i thank you as as bad at keeping himself busy with other people. it was so high. this is the fcc inspector general who visited him in prison, in jail when he is held in new york. and he was outraged at the notion as i did and she filed false documents with the sec? and he said no, i sent the fcc the same documents i set my customers. [laughter] and inspector general said, but weren't the sole stock units? and that's when he uttered that line, after a long pause, i can
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see how you think they might be false. so he defended himself. i'm him as a psychiatric nurse and she has to tell me that the mind will not see what it cannot. c. that people will defend themselves against knowledge that they cannot bear to it now which. maybe there is something of that in madoff's assistance that he really was an honest and successful manager or many years. the government says no for most of this years to recruit. he really was failing on this record. while no, he wasn't. i think he can really bear to face who he really is. and until he does, i don't know that anything like the kind of remorse that we might expect to see a demand would cause such devastation, besides his son's
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suicide, two other investors committed suicide in the aftermath of the retired british military man who went into a park and blew his brains out in a french money manager who lost his veins in his office because all of his clients money. so aside from the financial refuge, charities that had to close their doors and people who are living a social security because they had been last, there is the human wreckage. and yet he still would argue with me in e-mails that we exchanged, that the dems are going to get enough out of the bankruptcy process to make all of this writer can i save dollars and cents could ever make it right again. so you know, i would press him on that. i don't just sit and listen when i'm dealing with nato. i don't waste time trying to argue, but i do price back on the side of reality and say wait
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a minute, you know, there is no way you can make these people hold, even if the trustee is able to get 100 cents on the dollar. people had to sell the family home they expected to lead to their kids. they can't get it back. the kids had to drop out of college because they didn't pay tuition. you can't kaposi are back. he kept this mess of broken eggs back together again. >> well, i can see how you would say that. >> other topamax your questions. there's microphones on either side. whoever make their first. go ahead, sir. [inaudible] -- with the sec, please? has consulting relationship with the sec. >> it was always an informal relationship. he was sent a a noted figure in the security trading industry.
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that's another to retail investors because suppressing if he didn't have any retail customers. he was a behind-the-scenes guy, and infrastructure guy. so the fcc consulted him and his brother frequently about rulemaking that would affect wall street trading. he was in the vanguard of pushing towards more automation of treating, 24 hour trading, globalized trading, things that have all come past the madoff was an advocate quite early years so he would serve on advisory committees, roundtable discussions. he would be part of the delegation that the industry would spend the fcc to argue that sun will change or another. but he never had official consulting relationship with them. >> how important was the notion of affinity fraud? i am from minnesota and at least
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in minnesota a large part of the jewish community was involved, not so much because they direct contact with madoff, but because they trusted their friends who have distressed in madoff. >> wonderful question. there is no doubt, and affinity fraud no doubt is the process of preying upon some affinity that you have a toothache time, whether it is ethnicity or country club membership for religious state, did she pray on that affinity to develop trust, which he then exploit through fraud. certainly at the beginning and it's a earlier it was. madoff's father-in-law who is a source of some of the investors who invested at a time when madoff insists he was legitimate
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and might've been. he knew people at his country club combat the jewish country for periods of those people got to know bernie. bernie served on the board. you see the university of jewish philanthropy. he became known and not community. so yes, initially it was an affinity fraud, certainly. he was playing on the trust that he gathered simply by being a member of that group, a respected, generous, philanthropic member of that group. but by its sand, paint it eat last ticket of its life, it is the last affinity fraud, far behind. you know, the sovereign wealth fund of abu dhabi fell forward $440 million. investors in the persian gulf who never dream a kid from
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queens is running their money or he did know that he was earning their money and thought of it only as a senior executive of nasdaq or investing with madoff. so far out it it's affinity root, but it began there. >> could you discuss the folks who withdrew phony profits and the rationalization that they really should keep that money, even though it was a ponzi even though it was a ponzi scheme by definition and came from other people's pockets? >> you know, the tragic thing about a ponzi scheme and that such a good question because it hits right at the kind of heartbreak that makes ponzi schemes the most diabolical financial fraud attempting to. it doesn't just hit the deck guns to get the balance. it pits one set of victims against another set of it ends. and there can be no winners.
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but what the law says another london second circuit in new york has set back the way that you weigh the equity in these cases is on a cash income or cash out basis. but the people who have argue with john the cash they gave madoff don't get anymore until the people who didn't get any cash out of their account has been made whole, too. and then if there is anything left, we can share and share late peers to the effort of the liquidation right now are to do it do not losers, and those who gave made madoff more than take a path. no winners, surely the most term effort because they are not winners by any definition that we would understand. they're just as tragically betrayed. they lost money they thought they had. but under the law, they received all the cash they had given
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madoff and in many cases even more. they received money for madoff stole from other people in the years to their withdraws which they thought were legitimate earnings on their investment. there's no way to make this whole. if you rob peter to pay paul, how do you undo that? you take it back from palm to give it to peter. paul isn't going to be happy about that. he is going to believe that was his money and i am sympathetic to that. but peter is going to say no, it wasn't your money. it was mine. so that's the kind of legal heartbreak that is stretching out now for years into the future as this tangle, this knot is unwound. you can see why did a little upset with made transept when he claims money can fit all this. no way. >> we have about one minute left
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here palmar question. >> with respect to mrs. madoff. it's called traditional love. i'm sure you would've shown the same thing. and she didn't. but the question i really wanted to ask was, had bernie managed to manage this until the day with the dow back at 13, would have dodged another one quite >> i think he would. i think he would. and groups defense they are, she settled with the government under forfeiture agreement that the latter to keep four and a half. she still is not reached a settlement with the bankruptcy trustee. so how much of that she will be allowed to keep when she's reached a settlement with the bankruptcy court we don't know yet. and she doesn't know either. yes, i do think if madoff had been able to weather the storm, he would still be going strong. i really do believe it.
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he was already dialing has returned down by june of 2008 he was only paying 4%. he would be paying 8% and a half now maybe. now, 75 basis point to be paying very little, but more that you could get in the money market fund and you'd be happy to have it, wouldn't you? ..
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>> good afternoon. you are here at the line in the sand panel, so if you are looking for whether poetry in the modern age, you are in the wrong room. we are going to be talking about drug cartels this afternoon, so -- >> sometimes marijuana.
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>> so in tucson anything is civil discourse. it's a pretty volatile issue and i hope we can all follow that principle today. just to introduce myself, my name is margaret regan and i'm a journalist or a tucson. i've written a nonfiction book about the border called the death of jostling. i'm very honored today to present these authors on this panel which by the way is sponsored by the university of arizona press so thanks to them. here's our format. we are going to introduce our speakers and they're each going to speak terry briefly about how their book deals with the drug issue if it does, and in what way and then we are going to go into questions. out that a lot of you have questions. i have got a bunch of questions, but then we will cut off my questions and we will get you guys going. we only have one hour and it's one hour sharp. we don't have the information yet but i do want to find out
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where you can find these authors selling their books afterwards. where is it? 10b and we hope there is an escort to leave them there and perhaps you will want to buy their books. okay so we will get started right away. we have peter laufer to my left. he is a journalist, broadcaster and documentary film make or who is now a james wallace chair in journalism at the university of oregon, meaning that as a writer he has said very prized commodity, a full-time job and a full-time salaried. peter has recorded all over the world. his first major exposure to immigration issue was the soviet invasion in afghanistan in 1980. he's going to give us some pretty interesting cross-cultural perspectives on the drug trade. from afghanistan he went to
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europe in the 19 80s. he started seeing lots of immigrants coming in from the middle east and asia and back in this country he was in california and around mexico struck by the similarities of that immigrants coming from mexico to our country the he is the author of more than a dozen nonfiction books on social and political issues including nation, the case for opening the mexican-american border. it kind of tells you his perspective right there. and today, today he is going to be talking to us about his latest book, "calexico" true lives of the borderlands. >> you would like me to take this up the drug stuff? i'm happy too because in fact what i attempted to do with the book "calexico" true lives of the borderlands was to look at the border through the lens of calexico, which is, it isn't the
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stereotype of the border town that you might think for most people and i went to calexico with the goal of trying to look at the border without looking too much at migration or add drugs, because these are the three things that i was trying to get away from, the magaw bolus, san diego, tijuana, el paso and juarez so often where there are borders and looking in looking at the borders as a drug problem or a migration problem. calexico is intriguing because so much is reversed in calexico. collects oh as many of you may know is a crossroads town. the cosmopolitan city is on the other side of the border, mexicali. that is where 1.5 billion people live in the sprawl of calexico. and in mexicali is the state
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capitol and the university and the symphony and the all-night body houses and really good restaurants. everything closes down at dinnertime, which is maybe 6:00. even in calexico and calexico is an imperial town which hits the bottom of everything in california, education, health, air quality, water quality, all of these things where california counties, imperial counties is the worst. and life in calexico as it has been, for those of you who are from here and know what it used to be like going back and forth across the border, life in calexico for calexico's was a mix life, going across the border and coming back and living until t

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