The magical ‘Get Out of Jail Free Card’ (Part 2): Leona Helmsley, Bernie Madoff

Leona Helmsley

Leona Helmsley was painted in the media as a shrew, and was branded that for supposedly having said “We don’t pay taxes. Only the little people pay taxes.” This goes back to 1989, and so may not be fresh material for most readers here, but is still useful to try to understand.

She claimed not to have said that. The words were attributed to her by a former housekeeper, and are not credible – that is, even if Helmsley held that opinion, she would not have shared it with one of the “little people.” The Wiki footnote on that quote is “11.”* Yet the words became her brand. It was almost as if she was railroaded.

Two other names pop up in this affair, Alan Dershowitz, and Rudy Giuliani. Both names raise red flags, as Dershowitz, in addition to being Noam Chomsky’s foil, would be one of the actor-lawyers in the OJ Simpson show trial (to be covered in another segment), and Giuliani, then a United States Attorney, would turn up as mayor of New York on 9/11/2001, surely a trusted insider to that gigantic hoax.

So what’s up with Helmsley? People did not like her. My first instinct when I find someone so utterly unlikable is to try to like that person. Surely there is more to her than her public image. Though a millionaire in her own right, her husband Harry Helmsley divorced his wife of 33 years to marry her (footnote 8). She earned a bad reputation during the time when rental units in New York City were being converted to condominiums, often involving displacement. She seems to have failed in that venture, and so moved on to become a hotelier and advertising icon, called “The Queen” who wanted nothing but the best for her tenants. Later is was changed to “Queen of Mean.”

In 1988 the Helmsley’s purchased a mansion in Connecticut, and during the remodeling process were said to have charged the remodeling expenses (a personal residence) to their business, aka, tax fraud. There was also a lawsuit for failure to pay the little people, the contractors, that they lost. It is during this period that the prospect of jail entered the picture. Rudy Giuliani, then United States Attorney, chose to publicly prosecute the Helmsley’s for tax fraud. The question is, why?

I have long assumed that Helmsley’s statement that only little people pay taxes was her undoing, for even it if is true, things like that are not to be said in public. Once those words hit the newspapers, her fate was sealed. She had to be prosecuted, otherwise word would get out that rich people don’t pay taxes. But suspecting now that she did not say that, I have to revise. While it is easy to conclude from this affair that people did not like her, there is also this gem in Wikipedia:

“She was forced to give up control of her hotel empire, since most of her hotels had bars and New York does not allow convicted felons to hold alcohol licenses. Mrs. Helmsley spent her final years at her penthouse atop the Park Lane Hotel.”

Could she have been driven out of the hotel business by others who wanted to take control of the business from her and her ill husband? (He died in 1997, and during the public trial was ruled unfit to stand trial. I would take a stab and suggest that dementia had set in. Leona had to face the jackals alone.)

Did she really go to jail? Her Wiki page is loaded with red flags, so let’s explore further: As noted before, we have the presence of Giuliani and Dershowitz, two men who frequently turn up in public hoaxes. So the prosecution and defense could not have been terribly serious. (Dershowitz was used later to get her sentence reduced, after her conviction.)

“On August 30, Helmsley was convicted of one count of conspiracy to defraud the United States,^[14] three counts of tax evasion,^[15] three counts of filing false personal tax returns,^[16] sixteen counts of assisting in the filing of false corporate and partnership tax returns,^[16] and ten counts of mail fraud.^[17][18]”

That all adds up to 33 counts by the way, but all save 8 of the convictions were dropped. She did collapse in public when it was “clear she was going to prison.” She may have realized more than just that – the extent to which she had been framed and betrayed. Eventually, her sentence was reduced to 19 months, and she was ordered to appear for incarceration on 4/15/1992. We are told she was under control of the Federal Bureau of Prisons, and that BOP number was 15113-054. For those who pay attention, those digits add up to an ’11’ (1+5+1+1+3) and ‘9’ (5+4), which also reads as 9/11, a spook marker. My take: her prison sentence was fake.

After prison she lived alone, and kept in touch with a few friends, including the Noriega family. That is an interesting touch, as Manuel Noriega is on my list of people with the “Get out of Jail Free card.” He was a CIA agent used as a public whipping boy in justification of the 1989 US attack on Panama, and who was sentenced to jail in Florida  under some strange rendition of law where the US  is allowed to jail leaders of other countries in its own prisons. In other words, he too never went to jail. She was also close to the shoe lady, Imelda Marcus (an odd parallel), and to Rick Hilton, father of Paris Hilton, or so we are told. (Straight has a theory that Paris is not really related to the Hilton family, and is just a hired actress. Otherwise they would not tolerate her debauchery and shenanigans.)

All very interesting, but not a smoking gun. My best indication that Leona never served a prison sentence is that she was at the minimum security facility at Danbury, Connecticut, the same one that was the first choice of Martha Stewart. I would assume that “inmates” there come and go as they please, only showing up for photo opportunities. I could be wrong, but fail to see the point of having a prison that has so little security that it is considered a picnic. Why not just let them go free?

Based on what Wikipedia says and what it quietly  flags and what it does not say, I suspect that word got around that Harry Helmsley was suffering dementia and was vulnerable. Since he left management of his affairs to Leona, and because she lacked his expertise, the jackals circled and attacked.

Sure, she didn’t pay her contractors, she cheated on her taxes, but in that class such behavior is common and ignored.

This was an opportunity. They hired the fake prosecutor Rudy Giuliani to go after her, and bribed Elizabeth Baum, the former maid, to claim she made the “little people” comment, which was then put through a megaphone of the controlled national media. She possibly faced real jail time, and realized she was beaten.  She stayed down. Alan Dershowitz offered to help, and Leona accepted not realizing he was actually on the other team. She lost control of the lucrative hotels and bars, the whole object of this affair, but never spent a day in jail.

Her public collapse may have been real, once she realized how badly she had been trounced by all of these actors and charlatans, some of them wearing robes.

Bernie Madoff

My first indication that Bernie Madoff might actually be in jail is that the people he supposedly scammed are some of the wealthiest and most powerful people in the country. It could be that was his undoing.  If he pulled his stunts on little people, doing telephone marketing, selling Amway products or perhaps pharmaceutical products, he’d be a free man today. But he is worth a closer look.

There is a problem. His Wikipedia page is littered with spook markers, so many in fact that I had to print the entire 20 page report to highlight them all. I came up with 89. Sometimes a number is just a number, but this whole Madoff business reeks of monkey business. His crimes are so flagrant and occurred over such a long period without detection (1992-2008) that I have to ask: Did they happen at all?

Madoff was convicted of running a Ponzi Scheme. Those are not complicated, and are in fact easy for regulators to uncover once tipped, as they leave a rich paper trail. People invested with him, and he put the money in his personal Chase Manhattan Bank account, and when new investors came along he used the funds from original investors to pay off old ones. In the meantime, he had fraudulent account statements prepared by his staff for his clients. His auditing firm consisted of one accountant and three other people.This stuff cries out “Look at me! I’m a crook!” but apparently no one noticed.

He was investigated six times by the SEC after 1992, and nothing was uncovered. According to Madoff himself, all investigators ever had to do was check the records of the Depository Trust Company, a central securities depository. I’ll add another idea – check his personal bank account. Even I would have done that.

All of this points to two possibilities, not necessarily mutually exclusive: One, that securities regulation in this country is a joke, and two that there was no fraud to uncover.

I take it as a given that Wall Street is more powerful than Washington, and that the SEC is a paper tiger. In news, movies and television, investors cringe at the thought of “The Feds,” poking around their business. In real life, not so.

But even so, the fraud described in the Bernie Madoff case is so open and obvious, so easily discovered, that I have to suspect it was made up. We are told that Bernie’s sons turned him in when he confessed to them that he was running a Ponzi scheme, and that the FBI immediately arrested him. I doubt it. Neither of those things happens on Wall Street.

But why publicize the (fake) largest Ponzi scheme in history? Remember the time – 2008/09. The market had crashed. Millions of people suffered hundreds of billions, if not trillions in total losses. Perhaps, just perhaps, it was decided that regular people needed to know that rich people suffered too. So they threw us a bone. Literature is now littered with Madoff victims – the Wilpons, Larry King, Zsa Zsa Gabor, Steven Spielberg, John Denver’s daughter. I have trouble with such collective stupidity, as if all of these people lacked competent investment advice at a time when we are told that many on Wall Street were suspicious of Madoff. Something smells.

Is Bernie in Jail? Let’s see: He was convicted of 11 felonies, of defrauding his clients of almost $65 billion. Madoff claimed sole responsibility, falling on his sword [footnotes 62 and 101]. He said he knew it was inevitable he would be exposed [footnote 110]. He was convicted on March 12, 2009 [3rd month and 1+2, or 33, and 2+9 for 11). He was sentenced to 150 years in prison [footnote 111, again]. His wife said the man who did the crimes was not the man she knew all those years [footnote 117]. That is very possibly true.

Madoff was placed in the Federal Correctional Institution, which Wikipedia tells us is 70 miles [110 km] from Manhattan. Why they choose to share the metric measurement of distance is anyone’s guess, but then we learn he was transferred to the Federal Correctional Institution Butner Medium, 45 miles [72 km] north of Raleigh. His Bureau of Prisons Register number is 61727-054, or a 6, 8, and two 9s.

He’ll be released on November 14, 2139. That’s absurd, useless information, but note that 2139 is 3 (2+1), 3, and 9 (3*3). Maybe that is the point. And anyway, as he was sentenced to 150 years his release date is 2159, but Wiki tells us that 2139 reflects time off for good behavior. Point taken. That’s why they strained to use that number.*

Well, the numbers could go any direction, but they usually seem to indicate spooks behind the scenes. They predictably fall in this order time and again. Is Bernie Madoff in jail? I doubt it. I doubt any crimes as described by Wikipedia were committed, and suspect that the whole affair was drummed up as a salve for the public, angry at what had been done to us by the bankers. Or to put it another way, if those crimes were committed as described, our regulatory structure in this country is being run by Mrs. Olsen’s second grade class. That is indeed possible.

One more thing about Bernie: Wiki tells us he started out as a penny stock trader working the pink sheets, and that his seed investment was $5,000 ($40,000 in today’s money) that he earned working as a lifeguard and sprinkler installer. It was rags to riches. Oh yeah … one more thing – his father-in-law also lent him $50,000 ($400,000 in today’s money) to help out. What is it with these people? Wouldn’t any of us like $400K in seed money for a startup venture? How many of us have those kind of connections? Bernie was riches and never for a day rags.

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*A reminder on these numbers, the primary spook markers that I notice are 8, 11 and 33. They are very clever about how they insert them in text, so that other spooks will recognize them and ordinary people not. So $65 billion is 11, footnotes 101 and 111 are merely enbedded 11’s, and the BOP number is 3+3 (33), 8, and two 9s, or 2*3 and 3*3. Et cetera.