Blow and Nocera

Ms. Collins is still on book leave.  Mr. Blow, in “My Very Own Captain America,” says racial revisionism is rampant in Hollywood. But the new “Captain America” film made it personal.  Mr. Nocera, in “The Madoff Trustee’s Bad Day,” says in the latest chapter over Bernie Madoff’s heinous Ponzi scheme, a federal judge delivers a big loss to everyone except the banks. What else is new?  Here’s Mr. Blow:

My grandfather spoke to me this week. That would’ve been unremarkable if not for the fact that he died four years ago.

I had ducked into a movie theater to escape the maddening debt-limit debacle. I chose “Captain America: The First Avenger.” Surely that would reset the patriotic optimism.

But as I watched the scenes of a fictitious integrated American Army fighting in Europe at the end of World War II, I became unsettled. Yes, I know that racial revisionism has become so common in film that it’s almost customary, so much so that moviegoers rarely balk or even blink. And even I try not to think too deeply about shallow fare. Escapism by its nature must bend away from reality. But this time I was forced to bend it back. It was personal.

The only black fighting force on the ground in Europe during World War II was the 92nd Infantry Division: the now famous, segregated “Buffalo Soldiers.” My grandfather, Fred D. Rhodes, was one of those soldiers.

The division was activated late in the war, more out of acquiescence to black leaders than the desire of white policy makers in the war department who doubted the battle worthiness of black soldiers. It was considered to be an experiment, one that the writer of the department’s recommendation to re-establish it would later describe as “programmed to fail from the inception.”

For one, as the historian Daniel K. Gibran has documented, the soldiers were placed under the command of a known racist who questioned their “moral attitude toward battle,” “mental toughness” and “trustworthiness,” and who remained a military segregationist until the day he died. In 1959, the commander commented in a study: “It is absurd to contend that the characteristics demonstrated by the Negroes” will not “undermine and deteriorate the white army unit into which the Negro is integrated.”

Yet they did show great toughness and character, including my grandfather. This is how his 1944 Silver Star citation recounts his bravery:

“On 16 November, while proceeding towards the front at night, Sergeant Rhodes’s motorized patrol was advanced upon near a village by a lone enemy soldier. Sergeant Rhodes jumped from the truck and as a group of enemy soldiers suddenly appeared, intent upon capturing the truck and patrol intact, he opened fire from his exposed position on the road. His fire forced the enemy to scatter while the patrol dismounted and took cover with light casualties. Sergeant Rhodes then moved toward a nearby building where, still exposed, his fire on the enemy was responsible for the successful evacuation of the wounded patrol members by newly arrived medical personnel.  Sergeant Rhodes was then hit by enemy shell fragments, but in spite of his wounds he exhausted his own supply of ammunition then, obtaining an enemy automatic weapon, exhausted its supply inflicting three certain casualties on the enemy.  He spent the rest of the night in a nearby field and returned, unaided, to his unit the next afternoon.”

Awesome!

Astonishingly, his and others’ efforts were not fully recognized.

My grandfather’s actions were the first among the Buffalo Soldiers to be recommended for a Distinguished Service Cross, according to surviving records. That recommendation was declined. In fact, only four enlisted soldiers from the 92nd were recommended for the service cross. They were all denied. It was given to just two black members of the unit, both officers, and only one of those officers received it during the war. The other received it nearly four decades after the war was over because of the investigative efforts of another historian.

As the 1997 study “The Exclusion of Black Soldiers from the Medal of Honor in World War II” pointed out, by mid-1947 the U.S. Army had awarded 4,750 Distinguished Service Crosses and only eight, less than 0.2 percent, had gone to black soldiers and not a single black soldier had been recommended for a Medal of Honor. (Roughly 1.2 million blacks served in World War II and about 50,000 were engaged in combat.) Until 1997, World War II was the only American war in which no black soldiers had received a Medal of Honor. President Bill Clinton changed that that year by awarding Medals of Honor to seven of the men who had been awarded the Distinguished Service Crosses, the only ones whose cases were reviewed for the upgrade. Just one of them, Joseph Vernon Baker, a lieutenant in my grandfather’s regiment, was alive to receive it.

Even when this news of the Buffalo Soldiers was making headlines in the ’90s, my grandfather never said a word. There’s no way to know why. Maybe it was the pain of risking his life abroad for a freedom that he couldn’t fully enjoy at home. Maybe it was the misery of languishing in a military hospital for many months and being discharged with a limp that would follow him to the grave. Or maybe it was simply the act of a brave soldier living out the motto of his division: “Deeds Not Words.”

Who knows? But it wasn’t until after he died that I learned of his contributions. My mother came across his discharge papers while sorting through his things and sent me a copy. On a whim, I Googled his name and division, and there he was, staring out at me from a picture I’d never seen and being extolled in books I’d never read. My heart swelled, and my skin went cold. I wanted to tell him how proud I was, but that window had closed.

It illustrates just how quickly things can fade into the fog of history if not vigilantly and accurately kept alive in the telling.

That is why the racial history of this country is not a thing to be toyed with by Hollywood. There are too many bodies at the bottom of that swamp to skim across it with such indifference. Attention must be shown. Respect must be paid.

So as “Captain America” ended and the credits began to roll, I managed a bit of a smile, the kind that turns up on the corners with a tinge of sadness. I smiled not for what I’d seen, but for what had not been shown, knowing that I would commit it to a column so that my grandfather and the many men like him would not be lost to the sanitized vision of America’s darker years.

This is my deed through words, for you, Grandpa. You’ll never be forgotten.

Now here’s Mr. Nocera:

Jed Rakoff is one of the most respected federal judges in the country, so when he issues an opinion calling one side’s arguments “convoluted,” “conjecture” and “a stretch,” people tend to take notice.

He did so on Thursday, in the matter of Irving H. Picard v. HSBC. Picard, of course, is the bankruptcy trustee in charge of recovering money that he can distribute to the victims of Bernie Madoff’s heinous Ponzi scheme. To this end, Picard has filed something like 1,000 lawsuits, seeking more than $100 billion.

He has sued the feeder funds that funneled money into Madoff’s firm. He has sued people who were close to Madoff and likely knew he was a crook. And he has sued many innocent Madoff investors, who had the misfortune of taking more money out of their accounts than they put in. Although these latter lawsuits have been extremely controversial, “clawing back” money from net winners to create a pot of money for the net losers is something bankruptcy trustees do all the time after a Ponzi scheme is exposed. After all, the gains reaped by the net winners came from money the net losers put in. That’s how Ponzi schemes work.

What trustees don’t generally do, however, is sue big financial institutions like HSBC or JPMorgan Chase on the grounds that they either looked the other way or helped enable the Ponzi schemer. As we discovered during the Enron scandal, the courts frown on “aiding and abetting” suits, even though to a nonlawyer, they can seem more than justified.

And so it was on Thursday: in throwing out Picard’s suit against HSBC — and strongly implying that every other bank the trustee has sued is also likely off the hook — Rakoff may have used sharp language, but he was really just interpreting the law as most judges would. You can’t read his opinion without being impressed with his legal logic — and the difficulty of mounting a successful appeal. You also can’t read it without shaking your head in dismay: Even as innocent Madoff victims are being sued to pay back other innocent Madoff victims, the enabling banks get to walk away. Sounds familiar, doesn’t it?

In fact, the reason Picard and his top lieutenant, David Sheehan, decided to sue the banks is precisely that the pattern was so familiar. “This is the largest financial fraud ever perpetrated,” Sheehan told me not long ago. “It didn’t happen without enabling. Bernie needed a bank to facilitate what he was doing. When you see what the banks were doing, you realize that Bernie was as much a part of the financial fabric of Wall Street as any collateralized debt obligation.”

During the course of a lengthy investigation, Sheehan became horrified by the evidence of bank complicity. HSBC, for instance, funneled enormous sums of money into Madoff. It served as the custodian to a number of Madoff feeder funds. Yet whenever the bank did due diligence into Madoff’s hedge fund, it ignored numerous red flags suggesting that Madoff was operating a fraud. Various HSBC due-diligence reports actually described Madoff’s returns as “too good to be true.”

JPMorgan Chase, which is also being sued by the trustee — and has also argued that the case should be thrown out of court — was Madoff’s bank. Its bankers saw money coming into the Madoff account and going out again, without ever being invested in the market. They saw evidence of money-laundering. Yet they never uttered a peep. Madoff’s business was too important.

Ultimately, Picard and Sheehan were trying to do something that has been sorely lacking in the aftermath of the financial crisis. They were trying to bring about some justice, using the only weapon at their disposal: litigation. That’s not their job, of course, and that is partly why they were handed such a stinging defeat. But at least they were trying, which is more than you can say for the Justice Department.

There’s one other aspect of Thursday’s decision that I couldn’t help noticing. The net winners, many of them, were nearly giddy over the fact that Picard got his comeuppance so publicly — even though Rakoff’s decision will surely hurt them. Of the $100 billion Picard has sought, at least three-quarters came from lawsuits like the one Rakoff just threw out. Had Picard won those suits, he would likely have had enough to compensate not just the net losers but the net winners. The fact that he lost means that he will continue to press hard for clawback money.

It is easy to understand the net winners’ anger at the trustee. To wake up one day and learn that you’ve been victimized by a financial fraud is painful enough. But to then realize that you are expected to return money that you thought was yours is infuriating. As their fury has grown, however, they have forgotten who the real bad guy is.

It’s not Irving Picard. It’s Bernie Madoff.

 

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