We Need to Know Why Harry Markopolos Got the Bum's Rush

Ryan Chittum of CJR's Audit column follows up on the strange story of the Wall Street Journal and Harry Markopolos, the Bernie Madoff whistleblower.

Reacting to my blog post yesterday, in which I theorized that the Journal simply didn't believe the guy, Chittum says:

That sounds right to me. We all know who Markopolos is now. But who knew him then? Trust me, Journal reporters get a lot of cranks weaving elaborate conspiracy theories and trying to convince the WSJ to print them.

I see Chittum's point, and of course the folks at the Audit know whereof they speak. The former editor of the Audit, Mark Mitchell, has morphed into a shrill stock market conspiracy theorist, now on the payroll of Overstock.com's wacky CEO Patrick Byrne. Mitchell recently alleged that the Audit was "bribed" by a hedge fund. So as you can see, it happens in the best of families.

But the problem with the "crank" theory is that Markpolos simply did not have any of the hallmarks of a crank. He was a trained forensic accountant and fraud examiner. He worked for a respected money management firm. His motives were as impeccable as his credentials, and while he may have been a bit overbearing, suggesting lines of questioning, their treatment of the man simply makes no sense to me.

The Madoff morass is just too big, too destructive, too poorly timed to let a shrug and a "I doubt he contacted us" and "we cover even bigger scandals" suffice. I think the Journal should do what what the New York Times has done in the past, most recentlty in its 2005 post-mortem of the Valerie Plame affair, and cover this story itself. It should explain how it passed up on an opportunity to expose the biggest financial scandal in history. It should explain why somebody at the newspaper didn't hear this man's story.

I would not be terribly surprised if the Journal does just that. Like it or not, the newspaper is part of the story, just as the Times was with Valerie Plame.

© 2009 Gary Weiss. All rights reserved.