Cat Fight On Capitol Hill

By CHEWY CARBONARA
Professional Snitch
Feb 7, 2009

WASHINGTON -- A whistleblower who repeatedly warned the Securities and Exchange Commission that Bernard Madoff was perpetrating a massive investment fraud testified Wednesday that the regulatory agency that oversees financial markets is inept, "financially illiterate" , far too cozy with the financial titans it is supposed to be regulating, and far too comfortable with the idea of cross dressing in the workplace.

"The SEC is also captive to the industry it regulates and it is afraid of bringing big cases against the largest most powerful firms," said Harry Markopolos, an independent financial fraud investigator. "Cleary the SEC was afraid of Mr. Madoff." Later adding, " because he was so large and flatulent and always forgot the safe word."

Markopolos began contacting the SEC at the beginning of the decade to warn that Madoff was a fraud. He sent detailed memos, listing dozens of red flags, laying out a road map of instructions for SEC investigators to follow,photos of Madoff in heels and fishnets,and even listing contacts and phone numbers of Wall Street experts, hookers, and drug dealers whom he said would confirm his findings. But, Markopolos' whistle-blowing effort got nowhere.

"I gift wrapped and delivered the largest Ponzi scheme in history to them and some how they couldn't be bothered to conduct a thorough and proper investigation because they were too busy on matters of higher priority," Markopolos told the House Financial Services Subcommittee. "Maybe I should have used a trendier easy access gift bag instead."

When asked which matters had such high priorty, SEC spokesman Simon Dinglenut responded,"Well, what with the office picnic coming up and all.....I mean , you know, these gatherings don't just plan themselves. There are committees and meetings, suggestion boxes....the whole nine yards." Adding, off the record that he was looking forward to the picnic, being a "three time sack racing champion and all."

Agency Squabbles

After at first receiving an encouraging reception from the SEC's Boston Bureau Chief, Edward Manion, Markopolos said the New York SEC office, which supervised Boston, blocked a further investigation.

"In 2000 Mr. Manion warned me that relations between the New York and Boston regional offices was about as warm and friendly as the Yankees-Red Sox rivalry and that New York does not like to receive tips from Boston," Markopolos testified." And Boston in return felt that the New York office was " a bunch of friggin' fairies' ".

Markopolos said it took him five minutes to conclude that Madoff was a fraud after looking at his reported investment performance, and four hours of actual number-crunching analysis to confirm his suspicions. After which, he made himself some soup and had a nice nap, in order to recharge his super sleuthing powers.

Bernard Madoff, who is now under 24-hour house arrest at his Upper East Side luxury apartment, constantly calls his attorney to complain about the horrible conditions he is forced to endure, from tepid caviar to low thread-count sheets and has already threatened to 'shank' his butler if he forgets the fourth olive in his martini again.

Markopolos initiated his investigation after one of his bosses at his former employer, Rampart Investment Management, asked him to replicate Madoff's investment strategy, because he too wanted to build an enormous Jenga-like empire of anguish and deceit.

As he dug deeper, Markopolos said he began to fear for his life, convinced that Russian mobsters, Latin American drug cartels, and pissed off hair dressers were Madoff clients. When he tried to deliver an investigative file to former New York Attorney General Eliot Spitzer( YES, THAT ELIOT SPITZER), Markopolos said he wore gloves ( 3/4 arm length, black satin- classic) to ensure his fingerprints would not be on the documents.

Markopolos said the SEC is in need of a major overhaul. Senior managers should be replaced, lawyers should be separated from financial investigators, and the agency should hire employees who have years of Wall Street experience, he said,"You want reverse age discrimination. Hire the old foxes to police the henhouse" , to which SEC Inspector General David Kotz blurted out "WHO YOU CALLIN' OLD ? BITCH !" Kotz, who is studying the SEC's failure to respond to Markopolos' warnings about Madoff, confirmed to LMR that on Thursday he is scheduled to meet with Markopolos.....in a lovely blue taffeta tea length dress. Again - classic.