Kudos to Portfolio magazine for this morning's thought-provoking panel about Bernie Madoff. Panelists: Elie Wiesel (pr. Eely Vee-zel), a prominent author and founder of the Elie Wiesel Foundation for Humanity, which lost money to Madoff; Harvey Pitt, ceo of Kalorama Partners and former Chairman of the Securities and Exchange Commission (SEC); and Jim Chanos, President and founder of Kynikos Associates, a well-known short-seller. Portfolio Editor in Chief Joanne Lipman moderated. The conversation ranged from heart-felt to thought-provoking to vengeful. I Twittered it at http://www.twitter.com/laureltouby

Some of the questions raised: What is Affinity fraud? Why was there such a lack of accountability on the part of the SEC? Did Madoff have accomplices? Will the high-stakes banker-types at Lehman and Merrill be accused of criminal behavior? How can we trust that it was a $50b fraud when that number was what Madoff himself reported?

The best answer was given when someone in the audience asked Wiesel (who lost tens of millions of dollars to Madoff): "Could you ever forgive him?"

Wiesel repeats the question: "Forgive?" as if to consider it. Then, after a looooong pause, retorts "No!....He'd have to ask for forgiveness and he wouldn't do that."

A bit later, I'll post some video. In the meantime, hit the "continued" link to find out more about what was said (and what went noticeably unsaid) about the Madoff Fraud...

Madoff was the recent cover package in Portfolio, with contributions from Scott Turow, Amy Wallace and Gary Weiss. In the audience were a mix of bankers (former mediabistro.com lead investor Bill Ackman of Pershing Square was a no-show, alas.), media people (Richard Edelman, Tina Brown, Lloyd Grove, Keith Kelly, Jesse Eisinger, Diana Henriques), advertisers and a socialite or two!

Some notable quotes from /LaurelTouby Twitter feed:
Wiesel: "He [Madoff] was more than a liar, a crook. Once you enter evil, it's dynamic, not static."

Question for Wiesel: Were there any red flags when you met Madoff? Reply: "A myth was around him... Everything had to be secret...he was so great."

Question for Weisel: What would be the appropriate punishment for Madoff?
Reply: "A man who doesn't think about the pain of poor people... should be disturbed in his dreams."

Later, he adds: "A solitary cell with nothing in it but a screen. [On the screen], pictures of his victims running day and night, the victims saying 'look what you've done.'"

Wiesel: "Psychopath too nice a word. means sickness. He knew what he did!... it's not the Jewishness of him, it's the inhumanity of him...[Being ethical] is being concerned for the Other. Not having concern means you are not human." Wiesel mentioned Madoff's "inhumanity" a few times interestingly.

Lipman tried to pin Wiesel down about the reported $37 mm he lost personally to Madoff, but Wiesel wouldn't budge (video posted with that later). He did state that his Foundation lost $15.2 mm.

Chanos: "[Such a huge fraud] wouldn't have happened with a public company. The problem was Madoff wasn't running a public company." The assumption is there are more checks/balances/accountability with Public companies.

Pitt: Those $60k and $70k people the SEC hires aren't sophisticated enough to be able to assess a $20 b hedge fund. Pitt suggested there should be compliance audits for companies in future to prevent this kind of thing from happening again.

Pitt: "There has got to be Madoff money hidden offshore." He was too calculated not to have planned an exit strategy.

Chanos: "Don't know we'll find a large stash. But given his behavior [sending valuables in the mail to family members], he's attuned to moving assets quickly."

Chanos: What could punish a Madoff? "With financial sociopaths, no amount of punishment will cure them. They look at victims not with empathy but with curiosity."

Wiesel asks "What about the accountants? Where were they?"

Chanos quips: "Every great financial fraud has had 'audited' statements."

Chanos on financial incentives and why bankers behave in borderline illegal ways: "Problem is incentives became skewed. At Merrill, they didn't know [what was happening with certain financial investments at the firm], but they did know what their bonus pool was. That was paid in cash."

Pitt: "Were there accomplices? It takes a village to make a fraud." There must have been others.

Tina Brown, founder of The Daily Beast asked: "Is Madoff a Financial Godfather, the head of a financial mob syndicate?" She said something about how maybe this was the tip of the iceberg and there are other financial mobsters out there, perhaps Madoff was having problems with his mob family and that's why he turned himself in. Everyone laughed.

Chanos quips: "Madoff has to worry more about the Mossad than the Mob!"