The big news this weekend, as usual, had nothing to do with the Mets acquiring a shortstop, and once again had everything to do with Fred Wilpon and finances. Except this time, the news is that Fred Wilpon has been selected by Commissioner-elect Rob Manfred as the new chairman of the finance committee, as first reported by Bill Madden of the New York Daily News.
On the surface, appointing an owner who was caught up in the biggest Ponzi Scheme in history to chair a financial committee is not a great public relations move. Especially if that owner is now buried up to his eyeballs in hundreds of millions of dollars in debt that he has no real way to get out from under.
One has to wonder what was going through Manfred’s mind when he took arguably the last owner he should have picked and named him the chairman of the finance committee. It’s hard to argue that there wasn’t some shred of cronyism in his decision, as the Wilpon appointment was part of an almost-total retooling of baseball’s executive council.
Hal Steinbrenner of the Yankees, Jim Pohlad of the Twins, Stu Sternberg of the Rays, Ray Davis of the Rangers, Bob Nutting of the Pirates, Terry McGuirk or the Braves, and Tom Ricketts of the Cubs, who join Bill DeWitt of the Cardinals, Manfred’s biggest supporter during the voting last August.
Jerry Reinsdorf of the White Sox, John Henry of the Red Sox and Bob Castellini of the Reds – none Manfred supporters – came off the council, as did Wilpon and Royals owner David Glass. Glass was appointed the chairman of the business committee, and Wilpon – of course – got the same position with the finance committee. Both were strong Selig and Manfred supporters.
So at least we have a theory as to Manfred’s motivation – he wants baseball’s hierarchy to consist of those who helped elect him commissioner. But that still leaves the burning question of how Manfred could think that Wilpon would be a good chairman for a finance committee, unless he wants corruption and incompetence to reign free.
Wilpon made millions by investing with someone in Bernard Madoff whom he knew was engaging in shady practices. If one has any doubt about that, Howard Megdal was happy to quash any skepticism by tweeting out a simple photo Sunday morning when Madden broke the news. The photo was an email sent by Ashok Chachra, the chief investment strategist at Sterling Stamos Capital Management to a redacted email address.
Here is the full text of the message, dated December 13, 2008:
You should have received this email yesterday.
Sterling Stamos does not have any exposure to any funds managed by Madoff and never has had any exposure.
In fact, we turned down the Madoff Funds more than 6 years ago and told many of our investors including the Wilpon and Katz families about our concerns.
Notwithstanding our concerns, the Wilpon and Katz families continued to invest with Madoff Securities.
Please let me know if you would like to discuss this further as we are trying to inform all our investors that our due diligence process rejected Madoff but, unfortunately, the Katz and Wilpon families maintained their investment independent of our advice.
There is the evidence that Wilpon was given advice as early as 2002 that Madoff was not somebody with whom he should be investing, and he ignored the advice and kept on reaping the profits. That’s not quite as bad as actively duping innocent people, but knowing that you’re profiting millions as the result of a fraudulent operation is pretty low.
So why would Manfred appoint this man to be the chairman of the finance committee? We may never know.