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Wednesday, February 02, 2011

Hope You Weren't Serious About Wanting That Deferred Salary, Bobby: Mets Scandal Widens As Evidence Of Madoff Influence Grows

Unbelievable:
When Fred Wilpon’s son Jeff was married at Fresh Meadow Country Club on Long Island, Bernard L. Madoff and his wife were there. When Mr. Madoff’s son Mark was married at the same country club, Mr. Wilpon, the principal owner of the Mets, was a guest as well.

When the Mets negotiated their larger contracts with star players — complex deals with signing bonuses and performance incentives — they sometimes adopted the strategy of placing deferred money owed the players with Mr. Madoff’s investment firm. They would have to pay the player, but the owners of the club would be able to make money for themselves in the meantime. There never seemed to be much doubt about that, according to several people with knowledge of the arrangements.

The Mets acted as a feeder fund to the Madoff Ponzi scheme; those whom it steered included Bobby Bonilla, whose deferred salary was parked there.

As an aside, I had been meaning to congratulate my friends at SB Nation for their "get" of ex-ESPN writer Rob Neyer, who has a few thoughts on this matter.

Update: More on the Mets:

Fred Wilpon, in August 2009, told the Times' Richard Sandomir that the Madoff scandal hadn't impacted the Mets in any way.

“But Fred Wilpon felt the need to emphasize again that the finances of the team had not been affected”, Sandomir wrote. “The resources available to him — revenue from luxury suites, club seats and a nearly 70 percent stake in the SNY network and his real estate holdings — have not been compromised by Madoff, he said.”

Around the same time, Howard called into a Fox Business Network interview with Erin Arvedlund, author of a book on Bernie Madoff. Arvedlund had asserted that the Wilpons would be forced to sell at least a part of the Mets to cover Madoff losses, something the Wilpons long denied, but acknowledged last week. Howard said, in the course of disparaging Arvedlund's reporting as“outrageous, unfounded and grossly irresponsible”: “We have said from the outset that the losses incurred from the Madoff fraud have not and will not affect the operation of the Mets.”

The reality seems to be that all three men had to have known that these statements were untrue when they uttered them. As Serge F. Kovalevski and David Waldstein wrote in Tuesday's piece: “When the Mets negotiated their larger contracts with star players—complex deals with signing bonuses and performance incentives—they sometimes adopted the strategy of placing deferred money owed the players with Mr. Madoff’s investment firm. They would have to pay the player, but the owners of the club would be able to make money for themselves in the meantime. There never seemed to be much doubt about that, according to several people with knowledge of the arrangements.

“'Bernie was part of the business plan for the Mets,' a former employee of the club said.”

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