As news continues to come out about the Wilpons’ connection to Bernie Madoff, it only seems to get worse. In an outstanding piece written for the New York Times by Serge F. Kovaleski and David Waldstein, the Wilpons’ link to Madoff is examined.
A former Mets employee was quoted saying, “Bernie was part of the business plan for the team.” It turns out that Madoff was a huge part of the Mets business plan. The Mets would place any deferred money that they owed to players in Mr. Madoff’s investment firm (yes, that means that the team will need to find another way to fund paying off Bobby Bonilla’s seemingly endless deferred payments).
Regarding Bonilla, it has been reported that his money was in an account. It is now obvious why ownership was so willing to except the Bonilla buyout. They expected to earn 18 percent on the money they invested with Madoff so they would be able to pay off Bonilla as well as make some money for themselves. This would have required a significantly smaller investment than what it would have cost to buy out Bonilla up front.
A former executive remembered Madoff’s name coming up when the team was negotiating contracts. Could Madoff have had a say in what deals were made or if payments would be deferred? There are a lot more questions that will be brought up as the media learns more and more about the Wilpons’ relationship with Madoff.
The Wilpons’ reach in the Ponzi scheme is also larger than we were initially led to believe. Analysis of Madoff’s 15,000 clients was done by Jamie Peppard, a former financial auditor. She concluded that more than 500 individual accounts could be tied to both the Wilpons and Saul Katz. Fred Wilpon also had at least 17 accounts under his name alone. This makes sense as it was noted that Wilpon recommended Madoff to many of his close friends.
Madoff’s former secretary, Elanor Squillari, noted that the Wilpons, both Fred and his son Jeff, would visit Bernie and his son Mark at the office. She also noticed that Madoff acted differently around Fred Wilpon than he did with the rest of his close friends. As close as Fred and Bernie were, Bernie always treated Fred like a business partner at the office and not like a close friend.
Fred Wilpon also had strong admiration for Madoff. When asked by an employee how Bernie was able to bring back such large returns, Fred commented that Madoff was very creative and smarter than everyone else. It is amazing that such a large organization with so much oversight simply let something like this slip by. One would think that the Mets ownership would have tried to do some research on Madoff and other investors before making multi-million investments. However, it appears that the Wilpons’ friendship with the Madoffs got in the way of their better judgment.
The Mets debt totals have actually increased as a result of the Ponzi scheme. The Wilpons had secured loans using the money in their funds with Madoff as collateral. It appears that the team has nearly $400 million in debt now because the loans had to be refinanced with new collateral. This does a lot to explain why the Wilpons are looking to sell a stake in the team.
It may eventually come up that Wilpon did have some knowledge of Madoff’s scheme or it may be true that Wilpon sincerely believed that Madoff was making legitimate investments. Either way, as an organization, the Mets have been greatly impacted by this. It has become more and more evident this offseason, when the Mets did not spend money on free agents.
One must also think about the impact that Madoff has clearly had on the Mets’ past. Do the Mets trade for and sign Johan Santana without their Madoff money? Does Mike Piazza get his huge deal in 1999 without the Madoff money? Do the Mets bring in Carlos Beltran or Pedro Martinez if they did not have their money invested in accounts with Madoffs?
As despicable as it sounds to make this claim, Madoff may have been part of what fueled the Mets’ success during the 2000s. Without him the Wilpons may not have been able to afford the players that they brought in. If this is truly the case, how will we think of these teams when we look back? And more importantly, what does it mean for the team moving forward to the future.
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