Business

During the production of Deregulating Greed, which is finished, until Bernie Madoff agrees to an interview, I often heard the term "that's just business".

When I started the film, I was witnessing such an excuse in a close friends business relationship. He and a platonic business partner had started a small greeting card company a few years back and things picked up quickly. My friend came up with designs, slogans, layout and found the printers who could do quality work in small batches. His partner was supposed to do the marketing and had "business contacts" that would land the new cards into speciality shops around the country.

They started with 5 different cards, I saw each one as they were developed and they were unique and beautiful. They quickly developed into a niche business and grew very quickly. My friend took on a marketing aspect to help grow the business, making calls, finding new places (airports!) to get the cards in front of new clients and after a year, things were heating up.

His partner, who had come into the venture as a 50/50 co-founder seemed lost. His connections did not pan out or lead to substantial return business. After that dried up, he was at a loss at how to grow the business or make it prosper in new markets. This, of course, did not stop him from collecting his share of the profits. Things continued to grow steadily for the next couple of years, but early in 2009 my friend, who was not involved in any aspect of the accounting side of the business wanted to know how a growing, thriving business, was not earning more in actual income. His partner said there were expenses he was unfamiliar with, and when my friend pushed, he found that his partner had hired an assistant who answered phones, handled basic bookkeeping and found a graphic designer for the business marketing packets.

My friend called me at some point and wondered what his partner was bringing to the table. He explained to me that the initial plan was to be the creative force, with his partner handling marketing, business connections and accounting. He had not done any background check on his business partner, but he felt as though he knew him and could trust him. As the months rolled past in 2009 my friend grew more concerned that not only was a lot of money being spent in areas that he had no knowledge of, but he also came to understand that his friend knew nothing of marketing or accounting. Two out of the three specialities his friend was supposed to be bringing to the table had to be farmed out to experts, costing the business about 30 percent of profits.

At some point my friend called me, upset and in a state of terror. His business partner had decided that my friend, a 50/50 business partner in this enterprise did not have the right to see the company books. My friend had a legal agreement with his business partner, one that, upon review, called for open accounting and teh ability for either partner to review the company books at any time. My friends partner refused.

At that time I was talking to my friend often, although once he realized what he was dealing with, he had cut ties to the business, moved on to another venture, and basically had to write off his creative effort and marketing skills as a lesson learned, because he could no longer get any money for all he had created and his partner was no longer taking his calls.

The final conversation ended with the business partner telling my friend, "this is just how business is done." This is a line I hear often, from crooks, hoodlums and convicted felons of all sorts. The cost of business, the way things are done or get done, and my personal favorite "it's just business."

All these statements are designed at the base to excuse some sort of shoddy work, some sort of theft, some sort of con. My friend was lied to and stolen from, and the justification was, "that's business." The great thing about almost any of these sorts of experiences is that the people who can create new businesses can almost always bounces back, because in business, it is important to be able to create something. People who talk and really have few if any real skills, will always be hustling for the next game, trying to con someone else. I have no clue what happened to my friends "partner" but what I do know is that my friend has created a new business, with a new business partner, one who was checked out, who actually had accomplished and succeeded. Lesson learned, I guess.

But I always find is distressing, this excuse of corruption, this simple line, the way it is done. It's such a crude way of excusing incompetence or theft, such a mob mentality.

As I sit here and hope that the biggest Ponzi Schemerer of all time will grant me an interview, I keep thinking about some of the statements Mr. Madoff has made, and one sticks in my mind, that the people he fleeced got what they deserved because they were greedy.

Amazing.