Lipman: He wanted you to go to Queens College?

Wiesel: Because his wife went to Queens College so they wanted to establish a chair, a special chair for me.

Lipman: So did he present himself as kind of, "I'm a senior adviser, I can give you advice," that sort of thing?

Wiesel: Not at all, I think that he presented himself as a philanthropist.... Because he helped so many other institutions, he belonged to so many other institutions. He gave money to other institutions. And nobody knew that it was our money! [Laughter]

Lipman: Did you start out with just the foundation money, and then increase—

Wiesel: On the contrary, no. We are too responsible for that. We started out with our personal money. And because we thought we did so well, we said, come on, we have so many projects. And it could help. And not only that: Everybody told us, literally, everybody we know in the field of finance, they told us, come on, you can do much more, more projects, because of Mr. Madoff, the savior.

Lipman: Are you thinking of legal action against him?

Wiesel: Oh, of course. We like everybody, I think we have a lawyer naturally who is doing what others are doing. I have an idea—I'm not sure it works.... I would like, actually, just as we bail out banks and car agencies, to bail out the charitable institutions. Only charitable institutions, the hospitals and the universities. The government should come and say "Look, we bailed out so many others; we can bail you out, and when you will do better, you will give us back the money." I think it would be a great gesture that the Obama administration should show, we really think of those who are helpless and who are doing with their money only good things.

Lipman: That brings up the question of what is the appropriate punishment for someone like Madoff. Given what you just said about how it's not a Jewish issue, you may disagree, but I'd love to run this by a rabbi.... Should the money be distributed amongst those who need it most?

Wiesel: What money? [Laughs] There is no money! What money? As for excommunication, come on, this is, what would he care—would it be a punishment for him? I don't think so. A man who doesn't think about the pain of poor people—you think that he could sleep at night and not be disturbed in his dreams by, by the misery, by the agony, of helpless people, so he would care whether he would be excommunicated? No, I would like really to have a group of judges with imagination, to imagine a punishment for him. [Laughter]

Lipman: Let me throw the question over to you two gentlemen. First of all, to the question of what money—do we think that there is other money hidden other than the assets that have been found so far?

Pitt: One assumes that there had to have been some kind of stash.... I have no direct knowledge of it, but it does seem to be a lot of money that's been completely frittered away, and that's part of the purpose of the accounting, but I have to believe that there's probably more money offshore somewhere. This was a very carefully thought-out fraud. I do this with great trepidation, but I do want to take a slight bit of an issue with Professor Wiesel, because one of the things that we saw at the SEC when I was there both times was this concept that you mentioned, Joanne, of affinity frauds—people who prey on others with either similar religious, or cultural, or social backgrounds. It's not overt. It's not somebody saying, well, invest with me because I'm in the same country club, but it is the fact that people who have a lot in common with those they are trying to fleece tend to be more successful at times because there's an initial element of trust. We always felt affinity frauds were the worst kinds of frauds in a sense, because [they] preyed on the human quality we all have, which is the believe the best of people in a very difficult environment....

Lipman: Jim, you have a highly attuned antenna for this sort of thing. What would be your theory—do you think we're going to find a large stash somewhere overseas?

James Chanos: I don't know that we're going find a large stash, but given his behavior subsequent to being caught, or immediately prior to being caught, with envelopes of jewelry... this is a guy who seemed to be attuned to moving assets quickly. So my guess is that there will be hopefully some trail to find something. I don't know how great it'll be. But as to Professor Wiesel's comments about the judges' imagination for punishment: I have some experience with financial sociopaths—and make no mistake, Bernie Madoff was a financial sociopath—and financial sociopaths, like any other kind of sociopaths, regard their victims with curiosity, not empathy.... And no amount of punishment will really ever cure us of sociopaths. They're always there, they're always among us, and unfortunately, they will make us victims from time to time. What concerned me more was the activity of the investors and their advisers, because every checklist of responsible behavior on behalf of fiduciaries broke down here. You know, "We're not going to tell you what we're doing, you can't see what we're investing in, no statements"... [The trades] were self-cleared, the strip-mall accountant... I mean, if you wrote a book like this I would throw it out. No one would invest billions of dollars in something like this. And yet there are still private funds out there, hedge funds in my industry and others, where they continue not to tell investors what they're doing. "You can't come in to see what we're doing with your money." Sitting on some investment boards, as I do, we have rules—if you can't go in and visit the manager and see the portfolio and talk to the auditors and talk to his employees, don't invest your money.