Feeling Sorry for the Wilpons
Am I the only one starting to feel sorry for the Wilpons? I have not been a big booster of the Wilpons and their management of the Mets. In fact, just a week ago, I applauded their decision to seek “strategic partners,” writing that even a minority owner could breathe new life into the franchise. But now I feel they are being treated unfairly.
Trustee Irving Picard said Jeff Wilpon, Saul Katz and Fred Wilpon (left) made some $300 million in “fictitious profits” from the Bernie Madoff scandal. The lawsuit unsealed on Friday doesn’t say how much money he wants them to repay, but a report in The New York Times on Saturday puts the figure at $1 billion! He claims they “knew or should have known” that Madoff’s business was a scam. The Wilpons counter that they had no idea, and that if the SEC, which investigated Madoff several times couldn’t figure it out, how were they supposed to know? Excellent point.
Picard gets his profit number from money he says the Wilpons pulled out of Madoff’s business. But the Wilpons point out that they had some 200 accounts with Madoff — that figure just comes from the accounts that they took money from, not from all of them. Shouldn’t the net losers be included with the net winners? Another excellent point.
Picard claims the Wilpons withdrew $47.8 million more than they invested. To me, it seems fair, and fairly obvious, that that is the amount of money they should have to repay. $1 billion is just insane. Remember, the Wilpons thought they had a $500 million balance with Madoff, and now they don’t. Despite that, Picard says the Wilpons are not victims. I wonder what his definition of the word is.
It seems like Picard is picking on the Wilpons. To penalize them for what he thinks they “should have known” is ridiculous. I’m sure over the years the Wilpons had conversations in which they marveled at Madoff’s ability to continue to make so much money for them and his investors, and wondered how he was able to do it. But let’s face it, if someone was making money for you — especially someone who was a lifelong trusted friend with no history of wrongdoing — would you ask questions? No one suspected Madoff was a criminal — not his friends, not his family (allegedly), and not government officials who had oversight on him. Those government investigators were the ones who ”should have known” what Madoff was up to, not the Wilpons.
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Date: February 5, 2011