- [Narrator] Funding for this edition of One-On-One with Steve Adubato has been provided by Hackensack Meridian Health.

Keep getting better.

New Jersey'’s Clean Energy program.

Lighting the way to a clean energy future.

NJM Insurance Group.

Serving New Jersey'’s drivers, homeowners and business owners for more than 100 years.

New Jersey Sharing Network.

Wells Fargo.

Rowan University.

Proudly serving New Jersey for 100 years.

PSC.

Where your story is our business.

The North Ward Center.

And by IBEW Local 102.

Lighting the path, leading the way.

Promotional support provided by NJBIZ.

Providing business news for New Jersey for more than 30 years, online, in print, and in person.

And by Meadowlands Media.

A print and digital business news network.

- This is One-On-One.

- I'm an equal American just like you are.

- The way we change Presidents in this country is by voting.

- A quartet is already a jawn, it'’s just The New Jawn.

- January 6th was not some sort of violent, crazy outlier.

- I don't care how good you are or how good you think you are, there is always something to learn.

- I mean what other country sends comedians over to embedded military to make them feel better.

- People call me 'cause they feel nobody's paying attention.

-_ It'’s not all about memorizing and getting information, it'’s what you do with that information.

- (slowly) Start talking right now.

- That's a good question, high five.

(upbeat music) - Hi, everyone.

I'm Steve Adubato.

Way more importantly, we're honored to be joined by Bruce Watson, the author of a compelling, important book, "Sacco & Vanzetti: The Men, the Murders, and the Judgment of Mankind."

Bruce, thank you so much for joining us.

- Thank you for having me.

- Let me put this out there right away.

I just said this to you before we got on the air that I've been wanting to have you.

This book has been in our home for a long time, and my dad, God rest his soul, I remember getting this book and making an almost mandatory reading for everyone in our family.

Why do I say that?

Growing up in an Italian-American neighborhood in Newark, New Jersey, Sacco and Vanzetti were two names that I heard as far back as I can remember.

The basic facts of this case, going back to August 23rd, 1923, what happened then, and what happened in 1927 that is so significant about Sacco and Vanzetti?

First of all, who were these two gentlemen?

- Sacco and Vanzetti were two Italian immigrants among the millions who came to America between 1890 and the early 1920s and might have been unknown, but they got into a jam, as some people called it, two different jams.

One was the fact that they were devout anarchists.

They truly believed in anarchism, and some anarchists were lofty, poetic dreamers, and others were fierce militants, and they were fairly fierce militants.

And they were involved, we now know, in some bombing plots against America, but they were arrested for something else.

They were arrested for basically a street crime, a payroll robbery, a gunman driving down the street, shooting down these payroll guards, taking the cash and running, and that was what they were accused of, and that was what they were convicted of.

And the two different sides of them are still at war, and there's plenty of evidence that they were innocent, and their execution was followed around the world in every capital of the world on August 23rd, 1927.

But there was also some evidence that they might have done it.

And so the case remains endlessly complex, endlessly fascinating, and I just thoroughly threw myself into it.

- Why did you become so interested in this case?

- It was sort of a sequel to a book I had written a couple years earlier, the previous book I had written.

It was called "Bread and Roses."

It was about the Bread and Roses strike in 1912 in Lawrence, Massachusetts, a highly dramatic textile strike with 30,000 workers from all over and including many anarchists and many Italians.

And this was sort of a sequel.

In fact, I found out later that Sacco was at that strike.

He wasn't a textile worker, but he attended some of the rallies.

Some of the same characters appeared in both of these, some of the same policemen.

And so I was very much involved in looking into that time, and Sacco and Vanzetti seemed like the next logical step.

And I, like you, I had heard about it all my life, not quite in the same context, but I'd heard about it all my life.

And always one of those names hang in the air in American history.

They haunt American history.

And I began to look into them and found out why.

- Bruce, why do you think the name, Sacco and Vanzetti, and the case of Sacco and Vanzetti and the narrative, at least in my own community growing up, was they were railroaded, they got us, they got two of our own and the justice system worked against them because they were poor immigrants?

That was the narrative in my neighborhood.

Again, the facts, you're the one who researched it in the way you did.

Why do you think it was and continues to be for many such a powerful story in the Italian-American community?

- Oh, because I think that that is true.

There are some who say and many historians look at their anarchist background and the fact that they testified during their trial, and the judge didn't want them to bring out the anarchism.

He warned them against it.

He said, "If you go into this, you're not being tried for anarchists."

So he hated anarchists.

We'll get into that later.

But, "You're not being tried for that.

You should not bring that out."

- I'm sorry, Bruce.

I don't know that I've allowed you to explain what an anarchist was, is.

- Oh yes, I should do that.

- Go ahead, please.

- Anarchists were the terrorists of their time.

Think of the way we talk now about terrorists in various types.

Anarchism in the late 19th century and early 20th century had taken a huge toll.

It was a rising philosophy particularly among disgruntled workers.

It basically, it was not what we think of as anarchism today where total chaos.

The idea was, and it came from Russian and Italian thinkers, was that without laws, without a church, without police, people would behave themselves.

Often, it was compared to a lifeboat.

People behave on lifeboats.

They behave.

They care for each other without any laws, without any imposition.

This was the anarchists' dream, and they believe that if someday, not soon, but someday, if there was no government, no police, no church, people would behave, they would be free.

Well, I find that terribly naive, sweet but naive.

And there was another side anarchism though, and that was some anarchists believed in what they called the propaganda of the deed, which meant violence.

It meant assassination.

And anarchists had assassinated the king of Italy.

An Italian immigrant went from New Jersey back to Italy to kill the king.

An anarchist killed our president, William McKinley.

Anarchists had killed other people.

There had been bombings and other things.

So there were both sides to anarchism.

And in Sacco and Vanzetti, the question is always which side were they on?

They were kind of on both.

- But here's the thing.

But they're tried, they're charged, and they're convicted, and then they're executed, not for being anarchists, but for this specific killing of, was it two guards?

- Two guards, two payroll guards who were carrying $15,000 in cash through the street.

- But as I was reading...

Sorry for interrupting, Bruce.

In reading the book, the descriptions that were given in the trial of these two men did not match what they looked like, or how many dark-skinned, swarthy, if you will, the word often used for Italian Americans, who one of 'em had a mustache.

Was it Sacco or Vanzetti had a mustache?

- [Bruce] Vanzetti had a beautiful waterfall, flowing mustache.

- [Steve] And that was countless Italians.

- Yes, and you're right.

The descriptions did not necessarily fit, but you have to put the Italian context and the anarchist context into it.

As I said, they testified about their anarchism.

They decided it was the only way to explain why when they were arrested, they were armed.

They were armed to the teeth on a dark night on a streetcar.

Why?

They said they were going out to fetch anarchist literature they thought would be rounded up soon and lead to deportations.

That was their alibi.

So they did bring it out, and they testified very badly, very awkwardly about their beliefs in anarchism and the future, et cetera.

So that was there.

But much stronger was, as you said, the Italian context, and you have to put that in the Boston Massachusetts context of 1920.

There were numerous Italian immigrants in Boston.

They were in the North End.

They were elsewhere.

They were not well-liked.

They were totally discriminated against, totally suspect.

And there was at that time, already rising the mafia stereotype of Italian gangsters.

And because of the anarchy, the anarchism threat, the courtroom in Dedham, Massachusetts was locked down.

And Sacco and Vanzetti were marched by armed guards every day through the streets from their jail down through the streets, people watching, surrounded by armed guards, marched into the courtroom and sat in a cage, which was normal in a capital crime in Massachusetts at that time.

It was an open cage with bars all around them, cops all around.

They looked guilty.

They looked like dangerous men.

And it didn't help when Vanzetti stood and shouted at one witness who he thought was telling a lie.

And so it did not take a lot of...

There was a plenty of doubt, but there was also plenty of momentum by this time.

This was a horrible crime, and someone had to pay, and these were the men.

They fit the character in a certain way.

- Did you come to the conclusion, Bruce, in all your research, all your work, that Sacco and Vanzetti were railroaded in this case and convicted and executed for a crime that they did not commit?

- I try to be coy in the book and let the reader come to- - I noticed.

- His own conclusion, but I will reveal that yes, I believe they were innocent.

I think there is a slim chance of this so-called split guilt theory that emerges in the '60s.

Maybe Sacco was guilty and Vanzetti was innocent.

Vanzetti was a much more gentle type.

Sacco was a little bit fierce, and his alibi was a little weaker.

But overall, the one conclusion I definitely come to and state is they deserved a second trial.

There's no way that with all of the doubts and suborning perjury and prejudice on behalf of the judge, no way that they didn't deserve a second trial.

But yes, I do believe they were innocent of that crime.

But as we may get into soon, there was an anarchist bombing that took place a year before all this, and they were involved in that.

We know now it was their group who pulled it off.

- But they were not charged for that.

- They were not charged for that because no one, there was a deep suspicion among the budding Bureau of Justice, which would become the FBI, and J. Edgar Hoover, who was just starting his career, that the anarchists were involved, but they could never pin anything on them.

And so there's always a question of whether or not, maybe they knew they were guilty of this and so they're just gonna get 'em for the other, but nobody's- - Listen, I don't wanna be overly sensitive.

Growing up Italian-American, my grandparents came from Italy in the late 19-teens, early 1920s.

And again, this Sacco and Vanzetti thing, obviously, I became obsessed about in some ways.

But you mentioned Hoover and the FBI.

J. Edgar Hoover in particular, no fan of the Italian-American community, or is that an unfair assessment?

- Well, I think he was no fan of many non-WASP communities.

- Non-WASP.

(laughs) - I think it's fair, but I think Hoover was more involved in the anarchist aspect.

When the bombings went off, and perhaps now's the time to go into that, on June, 1919, on one night, there were bombs that went off in eight different cities in America at midnight.

They even blew up, one bomber carrying his bomb tripped and fell on the steps and blew up in front of the attorney general's house right across the street from where FDR was living at that time.

And so this bombing just shocked America and threw us into what was the worst red scare in our history.

It was not quite the same as McCarthyism, but it was more intense.

- Red scare, meaning fear of communism.

- Right, and so they rounded up hundreds of radicals, what were called the Palmer Raids, named after the attorney general, shipped 'em overseas, shipped 'em away, and just gone without any trial, without any detention.

And Sacco and Vanzetti were worried that this was gonna happen again and that they would get caught in it.

But that was what Hoover was involved in.

He was involved in masterminding those raids He was just a Bureau of Justice official then rising in the ranks, and he pulled that off, and he stayed with that fierce anti-communism, anti-anarchism his whole life.

- So, folks, you don't have to be Italian-American to appreciate the story that Bruce has written, "Sacco & Vanzetti: The Men, the Murders, and the Judgment of Mankind."

It has an awful lot to do with immigration as well.

And remember, again, it's hard in 2023 to think back into the 1920s, but Italians then, coming from a foreign land, there's a history there, and there are a lotta lessons to be learned, and people can decide for themselves.

Bruce, I wanna thank you so much, and we appreciate you taking the time to join us.

- Oh, thank you.

Thank you very much.

- Stay with us.

We'll be right back.

- [Narrator] To watch more One on One with Steve Adubato find us online and follow us on Social media.

- We are honored to be joined by Diana Henriques who is the author of an important book "The Wizard of Lies: Bernie Madoff and The Death of Trust".

Diana, great to see you.

- Great to be here with you, Steve - I was just telling you before we got on the air I saw you on the Netflix documentary about Bernie Madoff and I couldn't follow some of it, but I followed everything you said.

Put this book in perspective.

Bernie Madoff, and again, we're seeing in a variety of states, but our primary audience, New York, New Jersey, were a disproportionate number of people who got the shaft, got screwed, by Bernie Madoff in this region?

- Yes, although he had victims all over the world.

This was really the first global Ponzi scheme, Steve, and it pulled in money from Palm Beach to the Persian Gulf.

There were salesman in Beijing.

There were people in Latin America, all over Latin America.

But the early investors who were the ones that ultimately, given the way it played out in the bankruptcy court, were the ones who suffered some of the most heart-rending circumstances.

The early investors were from this region, largely New York, some in suburban Connecticut, and thousands in New Jersey.

So, the scam began in Manhattan.

One of Madoff's top lieutenants, Frank DiPascali lived in Bridgewater.

Some of the crucial scenes that I describe in the book as the fraud was unraveling played out in some of our local diners.

So, I mean, yeah, it was a New Jersey story at its roots and although it's damage stretched all around the world, it remained a cause of great pain for so many New Jersey and New Yorkers.

- Including in Israel as well.

- Yes, Israel suffered greatly through the loss of charitable funds, grants that had been made.

Bernie was an equal opportunity defrauder, I mean, when you're adding Elie Wiesel to one of your victim lists you're really not too concerned about the harm that you're doing.

- Yeah, the term Ponzi scheme some people think they know what it means, but the Ponzi scheme is named after someone named Ponzi.

- It was, Carlo Ponzi, Charles Ponzi, who was a fraudster.

- Why does it have to be an Italian?

By the way, why am I holding my hand here?

Why does it have to be an Italian?

But go ahead, I'm sorry.

- Actually, if it makes you feel better, he came to New York from Canada.

- I feel a little bit better, but go ahead.

- Bostonian 1920, he set up this elaborate scheme involving some bizarre thing called international postal certificates and he was promising people ridiculous monthly returns of 30%, 50%, and he pulled in a lot of money.

It exploded, I'm pleased to say thanks to some attention from some good business journalists up there in Boston in 1920.

It crippled a couple of banks in the course of its failing, but the whole scheme lasted less than a year.

So, it's surprising to me that his name remains stamped on this form of fraud.

But the fraud itself is actually much older.

It goes back to the 1800s when it was called a Peter to Paul scheme, and you can see why immediately, you're robbing Peter to pay Paul.

That's the essence of a Ponzi scheme.

- I'm sorry for interrupting.

A pyramid, not the same as a pyramid?

- Abroad in British English, a pyramid scheme is often used interchangeably with the Ponzi scheme.

In the US under US law, it's a different critter.

A Ponzi scheme is a robbing Peter to pay Paul fraud.

In which the only money available to pay investor returns is money gotten from other investors.

There's no actual investing being done at all.

In the US, pyramid schemes are sometimes applied to multi-level marketing programs and such.

So, I think it's just cleaner and easier to say Ponzi scheme and I educate the people abroad that you think of this as a pyramid scheme, but it's a Ponzi scheme.

- So Diana, when I was watching you on the Netflix documentary, I turned to my wife and I said, "We get those monthly statements", I'm not gonna say the name of a very reputable firm handling our family money.

And I said, "You know, I'm listening to Diana and all these people who were clients, friends, family members of Bernie Madoff.

They're getting a monthly statement.

It's telling them what the returns are.

It was all made up.

It was all fake.

They were just printing out these monthly statements and it was never real.

And the only way people would get paid is by new money coming."

- Precisely.

And so, your question is, is the question that haunts me about the viciousness of this kind of fraud?

How do you trust anybody when you see how easy it seems to rip people off?

And the fact is, Steve, it is easy.

Modern commerce is fueled by trust.

You sent money off to some online website this week to buy something for the puppy.

You don't know that they're there.

You don't know you're gonna get it, but you trust that you will, because almost always you do.

And almost always, the people we deal with in finance are honest.

And the con artists like Bernie Madoff look at that almost always and they see an opportunity that they can slip through.

They can hijack our tendency to trust, our willingness to trust, and use it to defraud us.

So yes, we could cure Ponzi schemes just by, with clinical paranoia.

If nobody trusted anybody, there would be no Ponzi schemes.

There also be no decent society and no modern commerce.

So, it's a trade off and we as investors need to learn how to protect ourselves from our own tendency to trust too much.

- But Diana, because Bernie Madoff had a relationship with the Securities and Exchange Commission, is the SEC or NASDAQ, was he at NASDAQ?

- A non-executive director for three terms at NASDAQ and really one of the principal figures in NASDAQ's history, who's responsible for its creation.

He was an advisor to the SEC in an informal way.

He attended round table discussions.

He testified before congressional hearings.

- He did as an expert.

- As an expert.

And he was an expert, Steve.

He was in my Rolodex long before you guys had ever heard of him, because his trading firm pioneered the after hours trading in stocks listed on the New York Stock Exchange.

So, I'm a reporter.

News happens after the stock exchange is closed and I wanna know what's happening to stocks.

As a result, I call Bernie's trading desk, because they are trading round the clock until the stock exchange opens the next day.

He pioneered trading in foreign securities here in the US.

He was an innovator.

He was someone who understood how the modern market was working and how it was changing and became a reliable source not only for people like me who covered market structure and securities regulation, but for securities regulators and people trying to work out the best way markets should work.

So, it's really a Dr. Jekyll, Mr. Hyde's story.

Where you've got Dr. Jekyll, a legitimate expert in NASDAQ trading and you've got Mr. Hyde running a Ponzi scheme downstairs.

- Why do you think he did it?

- Oh Lord, I don't know that we'll ever be able to see into that heart of darkness, but I think it was a fatal degree of pride.

And he has said in some later comments to other writers, he just couldn't bear to be seen as a failure.

And so long as the market cooperated and let him look like a genius.

And you know from 1982 on, we had a bull market the likes of which this country had never seen before.

- Until '87.

- Yeah, up until '87.

And then a brief stumble and then it continued on into the nineties.

But that brief stumble, I think was significant for him, because I think it's at that point that the market stopped giving him the kind of results that he'd been promising people and being, kind of preening himself about being able to provide the boy genius, the Wizard of Wall Street here, able to give people these incredibly consistent, non-volatile returns in a volatile market.

And so, I think he was so invested in that image of him as this enormous success he couldn't let it go.

And if he had to decide whether to be seen as a, whether to live with himself as a failure or to live with himself as a liar, it was a lot easier to live with himself as a liar.

- Did he target the Jewish community?

- I don't think deliberately.

No, his early investors were friends, friends of family, of his father-in-law, who was an accountant in the garment industry.

I haven't done the demographics, but we both know that there's a long history of Jewish entrepreneurship in the garment industry.

And that's who Saul Alpern, his father-in-law, steered into his orbit.

So, that was his initial clutch of clients.

Then he became active in Jewish philanthropies, as wealthy people would.

And that was a new collection of potential investors in his scheme from the boards he served on and the philanthropies he supported, and so, that expanded.

But by the time, which was about 1989, by the time hedge fund money started to pour in, most of that money was coming from offshore.

Most of that money was coming from Europe, the Caribbean, England.

And then we're getting into the equal opportunity fraudster period of the scam.

- Biggest lesson from your perspective in the Bernie Madoff scandal?

- The biggest lesson for me is beware of your own willingness to trust.

You can't rely on the regulatory machinery to protect you.

You need to look out for yourself.

People don't want to hear this, but I say it and I'll say it to you.

Don't do business with friends and family, because the trust that you must have, the trust that makes those relationships so precious to you, will blind you to the red flags that you should see in your business affairs.

There were so many people that I document in that book who trusted Bernie, because they knew Bernie, they loved Bernie.

And that's the lesson we all need to take from it.

- Diana, I wanna thank you.

- Thank you, Steve.

- It's one thing that, excuse me, one thing to see on Netflix.

It's a lot better to have you here like this for us.

Diana Henriques is the author of the book, "The Wizard of Lies" Bernie Madoff and The Death of Trust".

Thank you so much.

- Thank you, Steve.

- I'm Steve Adubato, that's Diana.

We'll see you next time.

- [Narrator] One-On-One with Steve Adubato has been a production of the Caucus Educational Corporation.

Funding has been provided by Hackensack Meridian Health.

New Jersey'’s Clean Energy program.

NJM Insurance Group.

New Jersey Sharing Network.

Wells Fargo.

Rowan University.

PSC.

The North Ward Center.

And by IBEW Local 102.

Promotional support provided by NJBIZ.

And by Meadowlands Media.

- (Narrator) Life is full of changes.

At Hackensack Meridian Medical Group, we're ready for them.

If you have a cold or chronic illness, our five star doctors can treat any ailment.

Whether you're starting recess or retiring, we're prepared with pediatric and adult specialists.

And if you just moved here, we are in your neighborhood.

You now have access to a health team thousand strong.

So no matter what or when, we're ready.