Conde Nast Portfolio contribuing editor Gary Weiss writes on his blog that The Wall Street Journal had a chance to uncover the Bernie Madoff investment scam back in 2005 but passed, according to congressional testimony.
“It seems that the Journal missed an opportunity to achieve one of the biggest scoops in financial history, win a Pulitzer Prize and all that other good stuff — and extinguish the biggest fraud in financial history.
“Markpolos says as follows:
‘Pat Burns, communications director at Taxpayers Against Fraud] put me in contact with John Wilke, senior investigative reporter for the Wall Street Journal’s Washington bureau. Mr. Wilke and I would become friends over the next three years. Unfortunately, as eager as Mr. Wilke was to investigate the Madoff story, it appears that the Wall Street Journal’s editors never gave him approval to start investigating. As you will see from my extensive e-mail correspondence with him over the next several months, there were several points in time in which he was getting ready to book air travel to start the story and then would get called off at the last minute. I never determined if the senior editors at the Wall Street Journal failed to authorize this investigation.’
“According to his timeline, he contacted the Journal in December 2005.
“At another point in his testimony, Markopolos pays the Journal the ultimate non-compliment by lumping together the newspaper with the lunkheads at the SEC, saying, ‘Unfortunately neither the Wall Street Journal nor SEC were inclined to even pick up a phone and dial any of the leads I provided to them.'”
Read more here.
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I am Patrick Burns and, for what it's worth, I find that very few newspapers or magazines of ANY kind have the budget or stomach or skill-set among their reporters to do much investigative research of any kind.
Mostly what reporters do today is "tombstone" a settlement by rewriting a DoJ press release. The Wall Street Journal's reporters are much better than most in looking under the rugs, and John Wilke is (in my opinion) among the best.
I do not think there is a newspaper, magazine or TV network in America that would have done this story so long as the SEC would not even admit they were investigating Madoff. The litigation risks were simply too high, and the unknowns too many. For things to get going with the press corps, there had to be at least an informal nod that "yes there was an investigation underway."
But, of course, the SEC was NOT investigating. We know that now.
What the SEC thinks is an investigation is having a bunch of lawyers shuffle through financial and accounting papers they do not understand, never quite aware that the papers they are looking at are designed to support the fraud, not illuminate it.
The SEC did not even figure out that the Madoff's audit firm was just three people!
As bad as the SEC is, other federal agencies are nearly as bad.
Billions of dollars are going down the fraud and waste rat hole over at HHS because Medicare is not auditing Medicare Part D plans. Hundreds of drugs are being sold in America's pharmacies without FDA approval, and some of those drugs may be killing kids, but the FDA has taken no action.
If a real investigative reporter with real time and a real budget and a solid skills set wants to tackle those two, use the Google. But, in fact, there are very few real investigative reporters left in America. And that is true all over.
Case in point: No one called me about this story before running it. That would take too much time!
And so it goes ...
P.