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One day, after about three or four years of driving and notetaking, a rabbi he knew well and regarded highly, a man who was also a lawyer and a Ph.D., asked him, "What are those notes for? Can I see them?"
"Sure," Wilpon told him. "They are notes about human behavior, about people under great stress. I'm trying to learn something from their behavior—from the people who talk too much in the car, to the people who don't say anything, to the people who got nasty, even violent, with each other... . Usually over money—the root of all evil."
Now, more than half a century later, Wilpon finds himself applying the notes and lessons he gleaned from studying people under great stress in a Cadillac driving down Coney Island Avenue.
The first thing Wilpon decided he needed to do after Madoff's arrest was go to his banks "to pay back every penny" of loans Sterling had taken out with Madoff accounts as collateral. Katz met with the banks to arrange restructuring and payment plans. With the help of his other assets—the Sterling Stamos accounts, real estate ventures, SNY—Wilpon, he says, "paid back everything other than about 180 [million dollars], which is due to be paid back in the next two years."
Wilpon seemed on his way to recovering from Madoff, but then Picard hit him with the $1 billion lawsuit. There were thousands of people who invested money with Madoff, handing over a collective $17.3 billion, according to Picard. Wilpon has become the most prominent, recognizable face of the Madoff clients—all because he is the owner of the New York Mets. The platform that comes with the position, which he had used to help launch his success in Manhattan real estate, now works against him, exposing him to greater scrutiny.
Wilpon says Sterling can afford to pay back all or most of its Madoff profits, but whether the suit breaks him or not depends on Picard's claim that he must also repay the $700 million of principal, even if he didn't know Madoff was a fraud—a claim that has been met with skepticism by the Wall Street Journal (which said Picard "seems most interested in collecting fortunes from public figures by humiliating them into a settlement, before his claims are ever tested in court") and Congressman Peter King (R-N.Y.) ("I think Picard has abused his power," he told WFAN, the Mets' flagship radio station).
Picard's tactics might be questioned, but in April he said in court papers that his clawback lawsuits—many have been settled, none decided in court—have reclaimed $7.6 billion of the principal invested with Madoff. Much of that came from a $7.2 billion settlement in December with the estate of investor Jeffry Picower, the largest beneficiary of the Madoff scheme and someone, like Wilpon, whom Picard argued should have suspected that his profits were based on a fraud. The estate of Picower, who died in 2009, admitted no wrongdoing in the settlement.
Wilpon's profits were nowhere near as dramatic as Picower's—one reason he says there was no reason for him to be suspicious of Madoff. "We trusted the man, it was steady, it was supposedly a safe investment," Wilpon says. "And so we made a mistake. Clearly. And we're now fighting that battle with the trustee because he knows that we didn't know [about the fraud], and he knows he's stretching the point by saying 700 million."
Fred Wilpon sat in a richly appointed wood-paneled waiting room one day last week on the ground level of Citi Field. It is a private lobby for VIPs headed to their suites. Wilpon chose the decor himself, selecting an Americana theme to underscore how deeply rooted baseball is in this country's history. Among the appointments are a framed 13-star American flag, framed handmade hook rugs that are more than 100 years old and substantial leather chairs.
Wilpon met a reporter here because he has no office at Citi Field—by his own choosing. Jeff, he said, has an office because he runs the team's operations. Major club decisions run through Fred, who otherwise enjoys scouring the daily scouting reports that come in from minor league affiliates. He is passionate about pitching, in particular. If the Mets advance a pitching prospect in the low minors, for instance, Wilpon will not just know about it, but also what types of pitches are working well for the prospect.