Madoff, Courts, Information, and Reform

NPR's All Things Considered carried a piece on 29 June titled "Madoff Victim: Financier's Apology Does Nothing" that contained an interview with, Miriam Siegman, an investor who lost her life's savings to Madoff who had spoken in court at the sentencing hearing. The interviewer asks Siegman whether the experience offered any catharsis.

It did not:I guess not really and the reason I say that is...what I think all of us had hoped for was the truth that might have come up at trial. You know, when you have a trial you have subpoena power and people get on the stand and are cross-examined....

She goes on to say that she worries that there will be meaningful changes to the system.

When a comment like this is heard from someone engaged in a lawsuit we sometimes dismiss it as window dressing covering up the fact that, really, "it's about the money." But in this case the statement comes from someone who (1) is not going to receive money, (2) has, in fact, already lost all her money, and (3) who got from the court one result she wanted -- a maximal sentence for the defendant.

Two things are sociologically interesting here. First, Ms. Siegman says "I think all of us had hoped for" and she speaks of change of the system. These are not empty and platitudinous comments, I think. This is an example of "speaking for society." In fact, the judge, in explaining the 150 year sentence he imposed, spoke of the importance of symbolism, an important dimension of "the social." But Ms. Siegman's answer points us toward something important. The interviewer was asking "did the courtroom process provide you with any emotional or psychological benefit?" and she replied not just "no" but by changing the terms of the question. This is not about the emotional payoff from "having one's say" but rather about the court as a venue where we, collectively, can find out, as equals, what others, who have set themselves over us (she'd earlier said that she felt that Madoff had treated his victims like "roadkill") know. This is precisely the "informational equality" that Gillian Hadfield and I have written about under the phrase "Democracy and the Information Order" (also the subject of several other posts in this blog: here and here).

Siegman's statement is a perfect illustration of the social value of the informational role of courts. The victims got the most they could have hoped for on the vengeance dimension, but because the case was settled with a plea bargain they were denied something important. Legal efficiency was perhaps achieved -- punishment was meted out at minimum expense. But perhaps this was done at a cost: a deficit in the democratic function of law -- victims and non-victims, equal members of the democratic polity are left wondering how this happened, how this could happen. It may be that various official inquiries by the SEC, by congressional panels, by the Madoff trustee, or by investigative journalism will ferret out answers to such questions, but the victims, the people, will be passive recipients of the information produced by those processes, not equal participants in the asking.

And she may also be right on a social-efficiency dimension: reform might be more likely if the courts got to play this informational role in a case like this. But that's an empirical question.