Mariah Blake’s article about Tom Petters is fascinating stuff. Petters used a Ponzi scheme funded largely by hedge funds, investors known to Petters and his associates through Christian groups, and the purchase of failing legitimate businesses to finance the classic lifestyle of the conservative wealthy-and-tasteless (high stakes slot machines! Yacht cruises with prostitutes, interns selected as potential sex partners, and cocktails involving Red Bull and citrus vodka!) All throughout this, he sought to get a pardon for his past crimes with the help of political backers ranging from Fritz Mondale to Michele Bachmann.
Among many other things, the Petters tale is an object lesson of the value inherent in being a responsible looking white guy in a suit. While Maddoff’s Ponzi scheme at least grew out of a legitimate operation, Petters was never anything but a con artist. And in the beginning, not a very sophisticated one — his basic strategy was to sell things he didn’t own and keep the money. And, yet. he was able to get away with a more elaborate and lucrative fraud for more than two decades, while accruing many of the markers of social respectability up to and including many powerful friends. There are too many examples of our fundamental regulatory failures to count, but this one is a doozy.