New York Times: the Wilpons were warned that Madoff wasn’t a sound investment

13 Comments

We may have actual legal documents from the case against the Wilpons as early as today, with both sides giving up all pretense of the conciliatory posture that occasioned the documents being sealed in the first place. The gloves are off and the bankruptcy trustee of the Madoff estate and the Wilpons are going at each other full-bore.

And the best thing about it for all of us is that each side has its own media operation: the New York Times is clearly getting passed information and spin from either the trustee himself or from someone sympathetic to his cause. The Daily News, in contrast, is clearly getting passed information and spin from either the Wilpons, their lawyers or from someone sympathetic to their cause. Unless you have a vested interest in the Mets or the Madoff debacle — and condolences to any of you who do — this is all great fun.

Today it’s the New York Times’ turn. Stung, it would seem, by being called lying extortionists by the Wilpons, Team Trustee provides the Times with some information that, if true, undercuts the Wilpons’ assertions that they were just as duped as anyone else by Bernie Madoff.

This comes in the form of a description of a lawsuit filed against the Wilpons last year by the widow of one of their former employees who lost a ton in their Madoff-invested 401K. In it she alleges that  multiple third parties — in one case the investment bank Merrill Lynch — made clear their concerns to Wilpon and his partner Saul Katz about investing with Madoff, yet they continued to invest with Madoff anyway, putting over 90% of the company’s 401K funs in Madoff securities.  The suit also alleges that Madoff had his own money invested with Wilpon’s company, thereby creating a conflict of interest on the part of the Wilpons when it came to deciding where the 401K money should go and how to invest it.

None of which is to say that the Wilpons were actively involved or even technically complicit in Madoff’s fraud. It’s merely to say that, unlike the other duped investors like Wayne Gretzky or Stephen Spielberg or whoever, the Wilpons were under totally different duties, subject to greater information and more closely-related to Madoff than anyone else who has been dragged into this case so far.  That’s what makes them different. That’s also what has them in the mess they’re in now.

I’m sure that the Daily News will counter this somehow. I’m sure a certain commenter who has been showing up in all the Wilpon threads will either echo those talking points or even have them before the Daily News does (uncanny, that!). Which is cool. All is fair in litigation and war. And, to be honest, I like the little back and forth we’ve been having in the comments section. Keeps everyone active and thinking.

But if the counter punch does come, it had better get a tad more refined. Because the more these allegations stack up — from disparate sources, not just the trustee — the less plausible the “Wilpon was totally blindsided by Madoff” line becomes.

And I’m not buying for a second that the Wilpons are in better shape now that settlement talks have broken down, which some are arguing. That’s simply ludicrous.  That is, unless you believe that having allegations splashed all over The Paper of Record that you screwed a widow out of her $300K retirement fund due to your negligence and conflict of interest to be a good thing. And unless you like your legal fees to shoot through the roof and your potential exposure to go from large-but-finite to “who the hell knows?”

Phillies, Red Sox interested in Carlos Santana

Getty Images
6 Comments

The Phillies and Red Sox appear intent on pursuing free agent first baseman Carlos Santana, MLB Network’s Jon Morosi reports. Santana rejected a one-year, $17.4 million qualifying offer from the Indians on Thursday and is expected to draw widespread interest on the market this winter. The Mets, Mariners, Angels and Indians could make a play for the infielder, though no serious offers have been made this early in the offseason.

Santana, 31, is coming off of a seven-year track with the Indians. He batted .259/.363/.455 with 23 home runs and 3.0 fWAR last season, making 2017 the fourth-most valuable year of his career to date. Although he was primarily stationed at first base over the last year, he could step back into a hybrid first base/DH role with the Red Sox, who are hurting for infield depth with Hanley Ramirez still working his way back from shoulder surgery.

As for Santana’s other suitors, the Mariners are far less likely to pursue a deal after trading for Ryon Healy last Wednesday. Neither the Mets nor the Phillies have a DH spot to offer the veteran infielder, and the Phillies’ Rhys Hoskins appears to be blocking the way at first base. Then again, Santana may not find a more enticing offer outside of Cleveland, where Edwin Encarnacion might otherwise be the club’s best option at first base. During the GM meetings, Indians’ GM Mike Chernoff said he “love to have both [Santana and Jay Bruce] back” in 2018, but hasn’t backed up that love with any contract talks just yet.