Today's Stories

April 23, 2009

Eamonn Fingleton
How the Wall Street Journal and the New York Times Buried the Madoff Scandal for at Least Four Years

Ray McGovern
Obama Plays Hamlet on Torture

Michael Ratner
The Torture Commission Trap

Alan Farago
The Quicksand Economy

Rob Larson
Business Gets Carded

Nadia Hijab
The Real Heroes of Durban

Fawzia Afzal-Khan
Deconstructing the Taliban

Niranjan Ramakrishnan The Financial Experts: Malgudi on the Mississippi?

April 22, 2009

Chris Floyd
The Fatal Thread: Torture, War and the Imperial Project

Joanne Mariner
Torture Evidence and Terror Blacklists

Vijay Prashad
Obama's Afghan Plan: Fracturing the Antiwar Movement

Gareth Porter
U.S. Lacks Capacity to Win Over Afghans

Dean Baker
The Tyranny of Bad Economics

Peter Morici
Housing Sales and Fixing the Economy

Winslow T. Wheeler
Eliminating Bad Pentagon Habits

Barucha Calamity Peller
The Battle to Take Back the New School

Harvey Wasserman
Chernobyl Could Happen Here

Aisha Brown /
Dedrick Muhammad
White Privilege in the Americas

Teo Ballvé
Obama's Feel Good Meeting with Colombia's Uribe

Website of the Day
Ahmedinejad's Durban Speech: What He Actually Said

April 21, 2009

Randy Rowland
Lindy Blake's Great Escape

Dave Lindorff
Jay Bybee's Conspiracy to Torture

Fidel Castro
The Secret Summit

George McGovern
Pull Out of Iraq This Year

Greg Moses
The Unemployment Channel

Benjamin Dangl
Argentina Remembers

Sonia Nettnin
Saving Lives in Gaza

Frank Barat
The Death of Bassem: a Shooting at the Wall in Bil'n

Binoy Kampmark
Legal Purgatory and John Demjanjuk

John V. Walsh
Code Red for Single Payer

David Macaray
SAG Should be Praised, Not Assailed

Website of the Day
Bonus Man: For Executive Assholes Everywhere

April 20, 2009

Mike Whitney
Housing Bust Comes Roaring Back, Worse Than Ever

Andrea Peacock
Histrionics and Legalisms in Missoula

Henry A. Giroux
Ten Years After Columbine: the Tragedy of Youth Deepens

Liaquat Ali Khan
Drone Attacks on Pakistan's Indigenous Tribes

Fred Gardner
Obama's DoJ Backs Prosecution of Medical Marijuana Providers

Stephen Soldz
Obama, Blair, Panetta and the Torture Memos: Praising Moral Cowards, Ignoring Real Heroes

Nadia Hijab
Obama's Multi-Polar Middle East

Dave Lindorff
The Meeting in Trinidad

P. Sainath
India's Press Nixes "R" Word

Nelson P Valdés
A Modest (Transition) Proposal to Obama

Mark Engler
American Empire Foreclosed?

Belén Fernández
The FARC Can't Dance

Website of the Day
Dear Mr. Buffett...

April 17-19, 2009

Alexander Cockburn
Thin Ice From Here to the Horizon

Saul Landau
Infiltrating Alpha 66: a Conversation with Gerardo Hernandez, Leader of the Cuba Five

Franklin Lamb
Persia Rising

Ralph Nader
The Greedsters Are Back!

Fred Gardner
Obama's Chimerical Marijuana Policy: a Guide for the Perplexed

Dean Baker
A Win-Win Solution: Tax the Rich!

Rannie Amiri
The Curious Case of Benjamin Netanyahu

George Wuerthner
The War on Predators

Dave Lindorff
No Amnesty for Torturers

David Swanson
Personal Torture Laws

Jim Goodman
The Control of Food

Kathy Sanborn
Economic Fallout Hits Families Hard

Don Monkerud
Economic Recovery for Whom?

Manuel Garcia, Jr.
The People's Money

David Michael Green
Home of the Barricaded, Land of the 'Fraid

Nelson P Valdés
The OAS Charter, Cuba and the United States

Manuel Gomez
From the Bay of Pigs to Trinadad and Tobago

Dr. Susan Block
On Sex Addiction: the Deadliest Sin?

Ramzy Baroud
Non-Violence in Palestine?

Christopher Brauchli
Banning Barbie

Stephen Martin
Statelessness: the Final Frontier

Ron Jacobs
Tearing the Whole Building Down: the Dead in Greensboro

David Yearsley
Monkey Music

Lorenzo Wolff
A Song for the End of the World

Poets' Basement
Moser, McTeer and Buknatski

Website of the Weekend
New England Journal of Medicine Report on Civilian Deaths in Iraq

April 16, 2009

Mike Whitney
A Bulletin From the Captain of the Titantic

Russell Mokhiber
The Top 10 Enemies of Single-Payer

Ronald Teska
From Iraq to Appalachia

Gareth Porter
Predator Blowback

Paul Fitzgerald /
Elizabeth Gould
Thinking Like an Afghan

Benjamin Dangl
Latin America Changes

Kevin Pina
Haiti: Obama's First Foreign Policy Disaster?

Robert Bryce
Another Ethanol Producer Goes Bust

George Wuerthner
See the Forest: the Value of Dead Trees

Paul Garon, David Roediger and Kate Khatib The Surreal Life of Franklin Rosemont

Website of the Day
Socialism and the Facebook Generation

April 15, 2009

Kathleen and Bill Christison
Solving Palestine While Israel Destroys It

Ray McGovern
W, the Torture Decider

Robert Sandels
Is There a Latin American Policy?

Heather Williams /
Paul Baker
Carbon Cap and Trade: How Wall Street will Game the Regs and Trash the Planet

Jack Willoughby
The Lessons of the S & L Crisis

David Swanson
Habeas at Bagram?

Paul Craig Roberts
94 Years of Serfdom

Sara Mann
Norman Rockwell and the Perils of Nostalgia

Kenneth Couesbouc
John Maynard's Martingale: How Keynes Got Rich

Binoy Kampmark
Tax Haven Hypocrisies

Kekuni Blaisdell, Lynette Hi'llani Cruz, George Kahumoku Flores, et al.: An Urgent Letter to Obama on the Rights of Native Hawaiians

Website of the Day
Taxa: the Paintings of Isabella Kirkland

April 14, 2009

Conn Hallinan
The Afghan Rubik's Cube

Mike Whitney
Why is Goldman Sachs So Scared of Mike Morgan?

Peter Morici
Taxing Grandma to Subsidize Goldman Sachs

Greg Moses
Economic Curveballs: the Laffer Posse

Fidel Castro
Obama's Cuba Policy: Not a Word About the Blockade

Robert Weissman
No Blank Check for the IMF

Rebecca Macaux /
Philip Primeau
Somali Piracy and American Foreign Policy

Carmelo Ruiz-Marrero
The Dubious Revoution: Biofuels, the Next Generation

Dave Lindorff
Snatch-and-Jail Justice: the Ugly War on Immigrants

Walter Brasch
The Resurrection of Intolerance

Benjamin Day
Why Has the Press Failed Us in Reporting on Health Care Reform?

Website of the Day
The Appraisal Bubble

April 13, 2009

Patrick Cockburn
Iraqi Militia Fear Reprisals After US Exit

Uri Avnery
Our Dissonance

Jeremy Scahill
A Test Case for Habeas Corpus: Will Obama Prosecute the Somali Pirate in a US Court?

Martha Rosenberg
Suicide Syndrome: Are VA Protocols Behind Iraq Vet Suicides?

Karl Grossman
A Radioactive Extension for Aging Nuclear Plants

Nadia Hijab
Still Waiting: Obama and American Muslims

Sam Smith
America's Cultural Bear Market

James McEnteer
Peru's Shining Example

Sean McMahon
Globalizing Politicide: Israel's Strikes on Sudan

Namihei Odaira
Makota's "Campaign Against Poverty"

John V. Walsh
Bossnapping

Website of the Day
Declining IRS Audits for Big Financial Houses

April 10 / 12, 2009

Alexander Cockburn
Resurrection and Revenge

Chris Floyd
Hope Abandoned: Obama Protects CIA Torture Memos

Mike Whitney
"Liquidate the Banks; Fire the Executives!" Warren's Devastating Report to Congress

Saul Landau
How the Media Bought the Surge

M. Reza Pirbhai
Obama's Afghanistan Plan and India-Pakistan Relations

Franklin Spinney
The Art of the Scam: Wall Street and the Pentagon

Rannie Amiri
Iran's Elections: Why Arab Leaders Want Ahmadinejad to Win

William Blum
The Ideology of Barack Obama

Matt Vidal
Why Card Check Would Help the Economy

Jeff Howison
Death of the Square Deal

Jeff Leys
Resisting the Af-Pak War: the Creech Air Base Arrests

Dave Lindorff
America's Imperial Wars: Why We Need to See the Horrors

Ramzy Baroud
Israel Investigated: But Will It Repent?

Missy Beattie
The Grateful Dead, Wounded and Displaced

Fred Gardner
Fakes Left, Goes Right: Obama's Crossover Dribble on Marijuana Policy

Harvey Wasserman Another $50 Billion for Rust Bucket Nukes?

Suzan Mazur
A Revolution in Biology: an Interview with Nobel Laureate Paul Nurse

Bernard Umbrecht
German Capitalists Take Fire

David Macaray
A Word Clooney, Hanks and Baldwin Should Learn: Solidarity

Janet Kauffman
How to Starve (or Feed) a River

Ron Jacobs
Daring to Struggle, Failing to Win

Norman Solomon
Getting a Death Grip on Memory

Michael Winship
Let the Railsplitter Awake!

Richard Rhames
Empire, Ennui and Extra Cheese

Wanda Fucha
Brother, Can You Spare a Million Bucks?

David Yearsley
My Journey to the Heart of Rahman

Lorenzo Wolff
Getting Beyond the Black-and-White: Jason Isbell's Challenging New Album

Ben Sonnenberg
Rossellini's Louis XIV: "Neither the Sun Nor Death Can be Gazed Upon Fixedly"

Jeffrey St. Clair
Savage Incongruities: the Photographic Life of Lee Miller

Poets' Basement
Corseri and Corzett

Website of the Weekend
The Palestine Chronicle Needs Your Help!

April 9, 2009

Mike Whitney
The Decade of Darkness

Patrick Cockburn
What It Would Take to Mend Fences with Islam

Stephen Soldz
Caught on Tape: Diagnostic Abuse of Veterans

P. Sainath
The Rise of the Shoe-cide Bomber

Ellen Cantarow
Israel's Master Plan for Transfer

Gareth Porter /
Jim Lobe
Obama and Israel's Threat to Strike Iran

Jeremy Scahill
How Many Democrats Will Stand Up Against Obama's Bloated Military Budget?

Jerry Kroth
Saving GM From Bankruptcy--With the Stroke of a Pen

Binoy Kampmark
Fujimori Convicted: A Measure of Justice in Latin America

Fidel Castro
My Meeting with the Black Caucus

Website of the Day
Bird Song Radio

April 8, 2009

John Prados
The Af-Pak Paradox

Bill Moyers /
Michael Winship
Changing the Rules of the Blame Game

Winslow T. Wheeler
The Tooth Fairy and the Defense Budget

Russell Mokhiber
PBS Lashes Back

Kathy Sanborn
Depression Fury

Rev. William E. Alberts
If the Shoe Fits: Bush and Al-Zaidi

James McEnteer Rashomon and the Binghamton Shooter: the Rush to Interpret Jiverly Wong's "Statement"

Nadia Hijab
Olmert's Nightmare

Adam Turl
Card Check on the Ropes

Kevin Zeese
Escaping the Drug War Quagmire

Website of the Day
Walk Score Your Neighborhood

April 7, 2009

David Price
Counterinsurgency's Free Ride

Uri Avnery
Who's the Boss?

Chris Floyd
Talking Peace in Prague, Dropping Bombs in Pakistan

Winslow T. Wheeler Defense Cuts: Gates and the System

Marjorie Cohn
Prosecuting the Bush Torture Team: Spain Leads the Way

Dean Baker
Hands Off Social Security

Diana Johnstone
NATO, Strasbourg and the Black Block

Dave Lindorff
Politicizing Accounting

Martha Rosenberg
Life on HBO's Factory Hog Farm

Evelyn Pringle
Motherhood and the Psycho-Pharmaceutical Complex

Website of the Day
Gaza: Closed Zone

April 6, 2009

Michael Hudson
The IMF Rules the World

Andy Worthington Bagram: Guantánamo's Dark Mirror

Ray McGovern
Profiles in Cowardice: Eric Holder and Colin Powell

Deepak Tripathi
The Pakistan Enigma

Mike Whitney
Bernanke's Financial Rescue Plan: a Glide-Path to Destitution

Norman Solomon
Meet the New Escalators: the Democrats and the Afghan War

Jonathan Cook
Israel Railways Accused of Racism in Firing of Arab Workers

Judith Bello
Justice for the Developmentally Disabled

Deena Metzger Blackwater in Liberia

Dr. M. Kamiar
"There's No 'Eye' in Iran:" Obama's Pronunciation Problem

Website of the Day
Prison Talk

April 3-5, 2009

Alexander Cockburn
From Twin Towers to Twin Camelots

Kathy Kelly /
Brian Terrall
Getting a Closer Look at the Killer Drones

Sue Sturgis
Fooling with Disaster? Startling Revelations About Three Mile Island Raise New Doubts Over Nuclear Plant Safety

Peter Morici
Girding for a Depression

Kathy Sanborn
Homeless in Tent City, USA

Andy Worthington
Britain's Guantánamo: Fact or Fiction?

Rob Larson
Subprime Supreme Court: The Roberts Court Has Become a Powerful New Tool for Business

Saul Landau
Biden and Nixon: a Tale of Two Latin American Experiences

Steve Early
An Evening with Andy Stern

John Goekler
Was Gaza Israel's Waterloo?

Rannie Amiri
Arab League Reconciliation Summit a Bust

Dave Lindorff
Hooray for Juries! A Courtroom Victory for Ward Churchill and Academic Free Speech

Lee Ballinger
Sound Garden: Tom Morello at the Grammy Museum

Ron Jacobs
Artifacts for Survival

David Macaray
AIG Plays the Sympathy Card

John Wight
G20: Capital's New World Symphony

Keeanga-Yamahtta Taylor
Race in the Obama Era

Mychal Bell
Surviving Jena Six

Missy Beattie
Hoop Hopes, War and Peace

Reza Fiyouzat
The Iran/US Rapproachment Dance

Michael Boldin
The War on Drugs is a War on You

Christopher Brauchli
The Pope's Batting 50-50

Charles R. Larson
Too Much Stuff

Susie Day
Bernie Breakout Shocker!!

Stephen Martin
Gordon Brown's Chicken Run at the G20

Kim Nicolini
"Last House on the Left:" Vigilantes of the Bourgeoisie

David Yearsley
Homage to Moog and Mallards

Phyllis Pollack
An Interview with Legendary Rock Producer Chris Kimsey on Working with the Stones, Ronnie Wood, Jimmy Cliff, Peter Tosh and Saint Jude

Poets' Basement
Foley, Valentine and Kozak

Website of the Day
The Corner Store

April 2, 2009

Robert Weissman
What If Obama Had Treated Detroit Like Wall Street?

Eric Toussaint /
Damien Millet
A G20 Meeting for Naught

George Bisharat
Israel's Impunity Must End

Russell Mokhiber
Something is Rotten at PBS

Franklin Lamb
Has Washington Lost Lebanon?

Gareth Porter
Settling Scores in Iraq: Maliki Draws US Troops into Crackdown on Sunni Rivals

David Macaray
Obama and the Ruling Class: "Only the Little People Pay Taxes"

Chris Genovali
B.C.'s Bloody Grizzly Hunt

Sam Smith
The Politics of Adulation

Suzan Mazur
Is Neo-Darwinism Dead?

Website of the Day
Fighting for Change in St. Louis

April 1, 2009

Chris Floyd
Surging Further Into the Afghan Abyss

Stanley Heller
Israeli War Crimes: Thank God, It Was Only Rumors

Mark Brenner, Mischa Gaus and Jane Slaughter Obama's Perilous Plan for Detroit: Restructure the Big 3, But Not With Bankruptcy

Jonathan Cook
The Slow Demise of Ehud Olmert

Eric Walberg
EU in Tatters: Only the Protesters Have Any Vision

Richard Morse
Why Haiti Can't Forget Its Past

Don Fitz
Guess Who Came to Dinner with a Match? Green Mayoral Candidate's Van Firebombed in St. Louis

Laray Polk
Texas and Evolution

Belén Fernández
12 Años de Soledad?

Harvey Wasserman
Cracking the Media Silence on Three Mile Island

Website of the Day
Pentagon Fraud Investigations Fell, While Contracts Soared

March 31, 2009

Uri Avnery
The Deception Tango

Peter Lee
Ghosts in the Machine: the World's Hottest Cyberwar Battlefield

Nicholas Dearden
A New Global Debt Crisis

Dave Lindorff
The Obama Betrayal

Joanne Mariner
"We'll Make You See Death"

Ron Jacobs
Obama's Pakistan Gambit

Wiliam S. Lind
Another Lost War

David Michael Green
Who Says the GOP Doesn't Have a Plan?

Benjamin Dangl
Beyond Elections in the Americas

Johnny Barber
Meditation in Orange

Dedrick Muhammad
Economic Inequality: the Foundation of the Racial Divide

Website of the Day
How the Obama Dems Took Over the Peace Movement

March 30, 2009

Michael Hudson
Financing the Empire: Do US Face G20 Mutiny?

Patrick Cockburn
What Next in Afghanistan?

Henry A. Giroux
Hard Lessons

Mike Whitney
Where's Eliot Spitzer Now That We Need Him?

Ralph Nader
Where's All the Money Coming From?

Paul Craig Roberts
Obama's War on the (Upper) Middle Class

Jeremy Scahill
The Logistical Nightmare in Iraq

Robert Bryce
The Cellulosic Ethanol Delusion

Jonathan Cook
Remembering Land Day in Palestine

Ray McGovern
Obama Bombs

Website of the Day
Hersh: Syria Calling

April 23, 2009

A CounterPunch Special Report

And the Anti-Pulitzers Go To ...

How the Wall Street Journal and the New York Times Buried the Madoff Scandal for at Least Four Years

By EAMONN FINGLETON

An old maxim has it that newspaper editors separate the wheat from the chaff, then print the chaff. By this standard, the editors of the Wall Street Journal showed special deftness in their handling of the Madoff affair.

They used the occasion of whistleblower Harry Markopolos’ testimony in Washington in February to address seemingly every minuscule detail of the scam. They even published an irrelevant, if lovingly crafted, floor plan of the Madoff firm’s office in the Midtown Manhattan Lipstick building. Yet, in all their apparent desire to “flood the zone” (maybe they were angling for a Pulitzer!), one detail was missing. Not a word of explanation was offered about the curious role played by the Journal’s own Washington-based investi­gative reporter John R. Wilke.

As Markopolos’ written testimony made clear, Wilke long ago knew the score. As far back as 2005, he had been entrusted with Markopolos’ now famous dossier raising no less than 29 red flags about Madoff. It is hardly an exaggeration to say that, on the strength of an afternoon’s research, a good reporter could have worked up any one of Markopolos’ points into a cracker of a front-page story. Taken as a whole, the dossier represented the biggest “career development opportunity” any journalist has been handed since Deep Throat delivered the goods on Richard Nixon to Woodward and Bernstein a generation ago.

There are differing accounts of what happened next. According to Markopolos, Wilke was hot to trot but needed the blessing of higher-ups. And, unfortunately, the Journal’s “news” operation is apparently run much like an Amtrak marshaling yard. As months turned into years, Markopolos’ 29 red flags festered like so many rotten tomatoes in some desk jockey’s in-tray. Other sources, however, place the blame firmly on Wilke’s shoulders. Apparently, he started to dig but lost heart because there was so little publicly available information on Madoff’s modus operandi.

It is all very puzzling. The question, of course, is why would Markopolos lie about something like this? And then there is the simple fact that his testimony on other, more weighty matters has already been resoundingly vindicated.

What is not in dispute is that, to the Journal’s eternal shame, the story eventually came out only after an avalanche of redemptions left Bernie with nowhere to hide and he turned himself in. In the interim, by remaining silent, the Journal played a devastatingly ignominious role in one of the biggest and most brazen scams in history.

If the Journal’s shame is particularly acute, virtually no one in the wider American financial journalism profession emerges from this fiasco with much credit.
  
One dog that snoozed in its kennel was the New York Times. The Madoff scam was, of course, a local story for the Times, not least because Times editors undoubtedly knew many of Madoff’s victims socially. It is surprising, to say the least, that no Times person ever seems to have sensed there was something fishy going on in the Lipstick building. The Upper East Side was buzzing with rumors about his apparently sensational investment returns. Many a New York socialite either had money invested with him – and boasted of it in a loud stage whisper – or at least wanted to do so.

Yet it was only on the day of Madoff’s arrest that the Times condescended to inform its readers that many of his more alert peers had sensed he was a fake all along. For years, he had been pegged as an outright Ponzi artist by Goldman Sachs and Credit Suisse, for instance, and he was blacklisted also at Deutsche Bank, Merrill Lynch, and UBS. Indeed, as far back as 1991, CounterPunch contributor Pam Martens, in her capacity as a Wall Street broker, had told him she was on to his game and had so advised a client.  For thousands of aggrieved Times readers, who lost their life savings in Bernie’s financial Bates Motel, the question is why they were the last to know.

To be sure, primary blame for dropping the Madoff ball lies with the Securities and Exchange Commission (SEC). But the fact that the SEC is a basket case is not news. Infected by the “greed is good” virus that has ravaged political discourse for nearly three decades, American financial regulation has now become so corrupt and incompetent that it would embarrass a Third World kleptocracy. What is news – at least to those who lack independent sources of information – is that top American editors and reporters now seem no more willing to tackle wealthy and well-connected crooks than their avowedly venal and cowed peers in, say, Jakarta or Harare, even though the physical perils of doing so here in the US are non-existent.

Which journalists and publications have been most remiss? It is not just the Journal that would prefer you didn't ask. Virtually the entire American media establishment has gone catatonic. Searches of Nexis, a news clippings database that includes many publications in the English language, indicate as much.  As of mid-April, anyone who searched for, for instance, “Markopolos and Madoff and Wilke” found only eight results, of which only one came from the mainstream press (a brief note by Howard Kurtz of the Washington Post). The entire subject seems to be a no-go area even at the New York Times, which has yet to mention Wilke’s name. Is this a case of people in glass houses not throwing stones? It sure looks like it.  What is certain is that in one hitherto unpublicized email message included in his written testimony, Markopolos stated that various Times people, most notably assistant financial editor Gretchen Morgenson, were “pretty much in the know.” It is not clear whether he had been in direct touch with any of them, but this would seem to be a reasonable inference. For the record, Morgenson, who in 2002 won a Pulitzer prize for her “trenchant and incisive” coverage of Wall Street, has told CounterPunch she can’t recall ever hearing from Markopolos. She added: “If you could be more specific about when it was that he supposedly contacted me I would be grateful.” As it happens, the date is not indicated in the correspon­dence and  Markopolos is incommunicado.

As for the Journal, the closest it has come to acknowledging its own role has been in two sentences summarizing Markopolos’ complaints about its inaction. In covering Markopolos’ oral testimony in early February, it wrote: “Mr. Markopolos said that in December 2005, he contacted a reporter at The Wall Street Journal, resulting in a number of phone calls and emails. Mr. Markopolos said he thinks that senior editors prevented the reporter from the newspaper’s Washington Bureau from flying to Boston to meet and discuss the Madoff issue.”

Fair enough – but the Journal didn’t leave it there. It went on: ”A spokesman for Dow Jones & Co., publisher of The Wall Street Journal, said Mr. Markopolos was ‘ill-informed and incorrect’ but declined to comment further on Mr. Markopolos’ statements.”

Dow Jones’ comment is a functional lie – an outrageous and deliberate distortion. Anyone who studies the full context can see that the “ill-informed and incorrect” epithets can only relate to the one implausible inference in Markopolos’ testimony, his idea (unmentioned in the Journal report) that Journal staff may have feared for their personal safety. Markopolos feared for his own safety, but, as a lone whistleblower struggling to get the attention of the SEC, he had more to worry about than a major national institution. The main thrust of Markopolos’ allegation – that the Journal wantonly ignored the biggest investment scandal in modern times – is in no way addressed in the Dow Jones comment.

The former executive editor of the Journal, Paul Steiger, who ran the paper in the relevant years, has disavowed personal responsibility for the fiasco. In an email message to CounterPunch, he wrote: “No mention of Markopolos’s initiative, or indeed no mention of Madoff, came up the line to me, nor would it be expected to. Only if the Washington bu­reau had decided to pursue a story would that happen.” He added that John Wilke was “an outstanding journalist” who at the time was producing “a string of deep, exclusive reports about such things as the misuse of earmarks.”

If Steiger’s comments are meant to exonerate Wilke, by the same token they  appear to spotlight  Gerald Seib and Nikhil Deogun, who served respectively as the chief and deputy chief of the Washington Bureau in the years concerned. Asked to comment, Deogun referred CounterPunch to the Journal’s spokesman who, in turn, is not prepared to speak for attribution. Meanwhile, Seib flatly denies responsibility. Responding to CounterPunch, he wrote: “Your question appears to simply accept the premise that a Markopolos initiative was ‘sidetracked,’ and then asks me to comment on that. So let me try to be as clear as possible here: It is com­pletely, absolutely, 100% incorrect to say that some reporting initiative was sidetracked. The notion is flatly wrong.”

It may be worth noting that both men have prospered mightily since  Rupert  Murdoch took  control of the Journal in 2007.   Seib has rocketed to assistant managing editor and is a fixture on Murdoch’s Fox Business News channel. As for Deogun, he  was promoted to the plum assignment of  foreign editor while still not yet 40. Given that the testimony of both Steiger and Markopolos seems fairly solid, it would appear that either Seib or Deogun or perhaps both are in the soup, with negative implications for Murdoch’s efforts to rebuild morale at 200 Liberty Street. A fair inference is that Wilke may have had his calendar loaded down with busy-work chasing political minnows in Washington when, with leadership and the help of a numerate colleague, he could have reeled in a financial whale in New York.

How could any capable editor fail to see the possibilities in the Markopolos dossier? Ryan Chittum, a blogger at the Columbia Journalism Review’s website, has opined that the fault lay with – get this – Markopolos! Markopolos was not credible enough, apparently – this despite the fact that he was an acknowledged expert in options trading, the field where Madoff was ostensibly performing such alchemy.

Let’s first note that Chittum may have an axe to grind. He is not only a former Wall Street Journal reporter, but his work has been published at ProPublica, a website that just happens to be run by Paul Steiger.

Was Markopolos really such a hopeless witness? Not in the eyes of Mike Garrity, head of the SEC’s outpost in Boston, where Markopolos lives. Garrity was clearly impressed by Markopolos and did his best to help. Unfortunately, he could not do anything directly because jurisdiction lay with the SEC’s New York branch. In a telling departure from the usual pattern of bureaucratic indifference in such circumstances, however, he repeatedly encouraged Markopolos to keep banging on New York’s door.

Markopolos had a “credibility problem” only in the sense that some of his more sophisticated analyses may have gone over the heads of Journal apparatchiks (as it seems to have gone over Chittum’s). The fact is that Markopolos front-loaded his lengthy dossier with his most technical and – to an intelligent, financially literate reader – most telling points. Big mistake. The poor fellow had not realized that, judged even by the indifferent standards set elsewhere, even senior financial journalists in the United States are notoriously mediocre. Virtually without exception, they cannot read a balance sheet – an ability that is to serious financial reporting roughly what eyesight is to driving a car. 
  
Moreover, financial knowledge at the Wall Street Journal seems to vary in inverse proportion to rank. Journal editors are “big picture” people, who are too busy spouting globalist claptrap or defending the bombing of Arab schools to try to sit down and read about a $50 billion fraud in their own backyard.

Yet the truth is that any intelligent young financial reporter with, say, two years experience should have had no difficulty understanding – and concurring with – even the most abstruse aspects of Markopolos’ argument. For the rest, the case was so obvious that even a novice could not have missed the point.

For a start, what inference is to be drawn from the fact that, as we have already noted, Madoff was blacklisted by some of Wall Street’s top securities houses – and this despite a long record of producing ostensibly some of the best returns of any fund manager in the world?

Then there is the fact that even as Madoff’s investment business ballooned, he stuck with a three-person hole-in-the-wall auditing outfit run by his elderly brother-in-law (Red Flag 17). Anyone who manages $1 million of other people’s money, let alone $50 billion, finds it a useful earnest of good faith to have his books audited by an independent and preferably well-known firm. As Markopolos pointed out, Madoff’s eccentric choice of auditor became an explicit issue when European bankers, acting on behalf of an Arab client, requested an independent audit. Madoff showed them the door, thereby passing up the opportunity to rake in a large chunk of cash.

The journalistic significance of Red Flag 17 is that, like many of the other lower ranked flags in the Markopolos dossier, it was easy to check out. In fact, unless Madoff chose to stonewall, it could have been instantly confirmed with a single phone call. Although in itself it did not prove very much, it strongly suggested that further inquiries would have been well worth the effort.

In his aversion to normal reality checking, Madoff ran true to the classic Ponzi type. Classic, too, was his excuse. His investment methods, he explained, were proprietary, and if he let independent auditors in, he risked losing his secrets to competitors. This was, of course, balderdash. Imagine how such an excuse might play in any other field. Suppose a golfer claimed his swing was a secret, so no one except a 78-year-old relative should be permitted to witness his play and check his score. The point is absurd, and in real life we know that Tiger Woods and Phil Mickelson have no problem with lesser mortals dissecting their play.

The full absurdity of Madoff’s excuse is obvious when you realize that no genuinely successful investor has ever had much fear of auditors. An auditor comes in after the fact – weeks, if not months, after the balance sheet date – to confirm that assets claimed to have been held at said date were actually there. They cannot outBuffett Buffett simply by knowing what stocks Buffett held three weeks ago. Still less can they hope to reverse-engineer  the financial logic behind Buffett’s stock-picking. Indeed, even though Buffett has gone to some lengths to explain his techniques, remarkably few of his disciples have had much luck emulating him. Madoff’s talk of a secret investment method was one of the oldest and most transparent tricks in the fraudster’s repertoire – a minimally disguised version of the imaginative scam, perpetrated during the South Sea Bubble in eighteenth-century London, in which a stock promoter announced the launch of ”a company for carrying on an undertaking of great advantage, but nobody to know what it is.”

Of course, defenders of the press’s virtue point out that Madoff was widely trusted by society figures. Certainly, he had no trouble relieving the great and the good of their wallets. Not least of his victims were such familiar names as CNN talker extraordinaire Larry King and Dangerous Liaisons star John Malkovich. But in common with most of Madoff’s other celebrity victims, neither King nor Malkovich is a economic sage. As any Wall Streeter can tell on sight, they fit in a different category, and there’s one born every minute. (It is only fair to point out that celebrities seem particularly vulnerable to Ponzi schemes. Sir Isaac Newton was among countless bigwigs taken to the cleaners in the South Sea Bubble. Ever afterward, he had the vapors any time the subject came up.

Of more forensic interest is the fact that some financial notables got their coattails caught in Bernie’s wringer. One  example was Henry Kaufman, a former top Salomon Brothers executive whose pessimistic commentaries on America’s  economic prospects in the Carter years earned him the soubriquet Dr. Doom.

Then there is the ubiquitous Mort Zuckerman, publisher of the New York Daily News, a man who made his pile in Boston real estate and is thus presumably sensitive to scam artists. If Madoff’s Ponzi act was good enough to fool Zuckerman, surely the press has a secure alibi? Actually, no. The point is that Markopolos’ dossier was not available to Zuckerman. Had it been, his money would surely have been out of the Lipstick building in a New York minute.

Most of the facts unearthed by Markopolos were truly unexpected and were accumulated only after years of dogged sleuthing. Markopolos’ interest had been first piqued as far back as the 1990s, when colleagues told him of this amazing fund manager who was ostensibly using a conservative options-based hedging strategy to generate consistently superlative returns. As an options expert, Markopolos quickly determined that what Madoff was claiming was impossible (in this conclusion, he was joined by many Wall Street authorities, not least analysts at Goldman Sachs). Either Madoff was faking or he was pursuing a quite different investment strategy, in all probability a shady one, known as “front-running” (more about this in a second). At a minimum, Madoff was a liar.

This conviction inspired Markopolos to dig ever deeper and sustained him through many vicissitudes. The basic problem was that a highly secretive Madoff had structured his business so that statutory disclosure obligations were risibly light. After years of piecing together information from a wide variety of mainly private sources, however, Markopolos became convinced that front-running was not the explanation. That left only one possibility: Madoff was running the biggest Ponzi scheme in history. Markopolos’ 29 red flags summarized the argument. Only the most obvious action required – and, in all probability, it would have been undertaken almost immediately had the press got on the SEC’s case – was that Madoff’s operations be subjected to a thorough, independent audit.

Although Madoff’s investors knew nothing of the 29-flag dossier, the more sophisticated of them surely never swallowed his presentation of himself as a financial magician. As the author Michael Lewis has pointed out, it is a fair bet that they always assumed he was front-running. In other words they realized he was a crook but just not in a way that threatened their wallets. To understand this line of reasoning, one must first realize that Madoff was not only a fund manager but a broker/dealer, and a big one at that. Front-running refers to the practice by brokers of exploiting  privileged knowledge about  future buying and selling by large financial institutions to make private profits.  A typical instance might start when a broker receives a big order from an institutional investor to buy shares in, say, IBM. This is more or less guaranteed to send the price shooting up, and if the broker can nip in seconds ahead with an order for his personal account, he or she is guaranteed an almost certain, risk-free, and instantaneous profit. Front-running is pandemic on Wall Street and, as Madoff’s more sophisticated investors realized, almost no one was better placed to profit from it than Madoff. Basically, they assumed he was turbocharging his fund management performance thanks to his brokerage knowledge. Of course, in theory he might have been prosecuted but, given what a shambles American financial regulation had become, the risk was slight. In any case, as Michael Lewis has argued, his investors may have reasoned that the worst that could happen was that “a good thing would come to an end.”

Up until December,  the financial press had virtually never taken a serious look at Madoff. The closest it had ever got to figuring him out was in two articles published in 2001.

Written respectively by Michael Ocrant of MARHedge magazine and Erin Arvedlund of Barron’s, these were both legally constrained accounts of the skepticism al­ready then rife among Madoff’s competitors. The conclusion an intelligent reader would have come to was that front- running was probably the explanation (Arvedlund’s article, for instance, was coyly headed, “Don’t Ask, Don’t Tell”).

Although Markopolos had yet to surface as a potential press source, he was already way ahead. As he realized, front-running only really works where the front-runner is small in relation to the institutional orders he exploits (otherwise, he can’t get out of his own way). This is where Markopolos’ sleuthing paid off. He knew that although Madoff tried to pass himself off as a small player who was merely investing on behalf of a few friends and relatives (an alibi that tended to reassure the sophisticates who believed he was front-running), by 2001 the amount of new money he was pulling in was already torrential.

As Markopolos went on to document, Madoff had structured his business to make it difficult for all but the most determined investigator to fathom its true scale. In particular, he relied on a slew of so-called feeder funds to bring in most of the new money. Investors in many of these funds never knew where their money ended up.

The conclusion from all this is that up until 2005, the press bears relatively little blame for its failure to spot an arch Ponzi artist at work. Yes, even before Markopolos surfaced, a capable reporter with a little knowledge of previous Ponzi schemes could have spotted the truth, but it would have taken some luck and considerable digging.

The real disgrace is the press’s treatment of Markopolos. Although we have yet to find out how many news organizations he talked to, it is already clear that the Journal’s behavior was inexcusable. For the record, Paul Steiger is at one with the current Dow Jones establishment in implying that the problem was nothing more than a bureaucratic snafu. In his note to CounterPunch, he wrote, “Mr. Markopolos’ suggestion that the Journal would have been intimidated from pursuing Madoff, or was somehow in cahoots with him, is fantasy. The Journal wrote tough stories about infinitely more powerful people, such as Dick Grasso and Hank Greenberg.”

Perhaps. But the fact that the Journal went after Grasso and Greenberg does not mean that it could not be blown off-course in other cases.  The most likely explanation is surely that Madoff pulled strings. As a big donor to politicians and charities, he undoubtedly had plenty of surrogates with access to relevant journalists. Then, there is the fact that cronyism is rife both on Wall Street and in Washington. On top of all this there was the problem that the most damning aspects of Markopolos analysis would have gone over many heads at an editorial conference.

One thing is for sure: the rest of the press should long ago have held the Journal’s feet to the fire. Why should newspapers set the bar of public accountability any lower for themselves that they do for, say, General Motors or Exxon Mobil?

Eamonn Fingleton is the author of In the Jaws of the Dragon: America's Fate in the Coming Chinese Hegemony (Thomas Dunne Books 2008). He can be reached via his website www.unsustainable.org or by emailing   efingleton@gmail.com

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