Former SEC chairman Harvey Pitt, fund manager James Chanos, and Nobel laureate Elie Wiesel joined Condé Nast Portfolio Editor in Chief Joanne Lipman to discuss confessed fraudster Bernard Madoff on Thursday in Manhattan. (Read the news story here.)

About 160 people, including Dan Rather, Georgette Mosbacher, and the Daily Beast's Tina Brown, packed the 21 Club for the breakfast meeting.

A transcript of the discussion follows.

Elie Wiesel: Madoff is not the greatest story of our lifetime. There have been other great stories really. But let's say this: In the late years he is one of the greatest scoundrels, thieves, liars, criminals. How did it happen? It's almost simplistic. I have seen in my lifetime that the problem is when the imagination of the criminal precedes that of the innocent. And Madoff had imagination. And he imagined, of course, what he did. We have no idea that a person is capable of that. But then I should have learned, of course, that a human being is capable of anything. Exactly what, who knows? Only the criminal knows. So he knew before we did. To us it happened the way it happened to so many others, meaning we had friends who were very close friends of Madoff, and years ago [a friend] just came to us and he said, "Look, you work, you work so hard, what are you doing with your money?"

And we said, "Look, we don't know—shares here and there."

He said, "No, I have a friend. It's true you are not rich enough, but I have a friend, and this friend is so great and so good." He has known him for 50 years.... Our friend was a friend of Madoff; it was 50 years ago or so that our friend gave him seed money. And that's how we came to him. We met him twice in our entire existence. He made a very good impression, we had dinner together.... But we had no idea, of course. I know that we checked the people who had business with him, and they were among the best minds of Wall Street—the geniuses in the finance field. I am not a genius in finances; I teach philosophy and literature. I don't know anything about the economy or financing. The closest person in my life—she knows, I don't. And so it happened.

Joanne Lipman: It's been reported variously that you lost $15 million or $37 million. Can you just clarify what that situation is?

Wiesel: The $15.2 million [loss] is the foundation. And then personal—we gave him everything. We thought he was God, we trusted everything in his hands. As with every other foundation, we live of course on the generosity of people, and we gave two dinners—one two years ago for Oprah, a very close friend, and for President Sarkozy—and that brought in a lot of money, a lot, a lot of money. And of course, immediately it went to Madoff. However, I don't want to stop here and not mention something else. You cannot imagine the response of this tragedy to us, of the people to us. Unsolicited, hundreds of people, literally hundreds of people that we have never known sent us money through the internet: $5, $18, $100, one even $1,000, saying, "How could he have done it to you, how does he do it?" And it's incredible the generosity of people who want to help. It was just something about the American people. Just as in 9/11. [It] was the greatest tragedy, but it also brought out the best in the American people. I was here then. And to see people on the street, strangers, would speak to one another, would share the pain, give bottles, they stood in line to give blood.... And so, here again, the generosity, it cannot compensate, but it shows again, a human being is capable of both very great, good things, and very horrible things.

Lipman: Your friend is a money manager?

Wiesel: I don't think so, no. He just is a wealthy man, and nothing in finance.... He lost $50 million—

Lipman: When you met with Madoff, I guess he must have portrayed himself as a man of learning, as a man who knew a lot about the markets. What was your impression of him?

Wiesel: We didn't speak about markets. In my presence, I don't think that we speak about markets. [Laughter] Did we speak about history, about Jewish philosophy? Probably also about ethics, which I like, this is my favorite subject—

Lipman: Ethics, ethics—

Wiesel: My favorite subject is ethics, ironically.... I lobby wherever I go and every university to have chairs of ethics, always ethics. Our foundation created an ethics prize for university students, which hundreds of students sent in their papers. So it's ethics, we must have spoken about ethics! Well, some learn and some don't. But was he then already a crook? Probably, I believe. I don't think that great events change people. Great events simply make the good better, and the bad worse.

Lipman: I'd like to move to Harvey and Jim. And actually you raise a good issue, Mr. Wiesel, which is how long has this been going on, and how much money do we think he really collected? The $50 billion figure came from Bernie Madoff himself, and obviously the guy's a psychopath, so what do we think the real number is? They've only found a billion dollars, and he supposedly had $17.5 [billion] under management at the time of his arrest. So, do you have a sense of how big the scandal actually is?

Harvey Pitt: However big it is, it's larger than it should be, and it's an incredible amount of money. I also would say that I thought the $50 billion figure he uttered was supposed to indicate how much money had passed through his portfolio. It's going to take a long time to account for the monies he actually had, particularly since he seemed to have utilized a strip-mall accounting firm, which itself was very troublesome. But I would say that the number has to be south of $17.5 billion—that's what he claims he had under management at the time this all unraveled. They found a billion, so that would leave $16 billion, and he's probably inflated the amount of money he had under management. But there's no question that the amounts are probably north of $10 billion—and that's a lot of money by anyone's reckoning.