Besides, the next paragraph should make a newspaper nervous:

A call to Saulnier at his Chicago office Friday netted only a short recording: “December Rain has currently suspended operations while we address the extreme situation and matters that have arisen from the cancellation of planned events. We apologize for the temporary closure. December Rain will continue to resolve these issues and hopes to be back in operation shortly.”

Hmm. No call back from the source. Not liking that.

The story returns to quoting Saulnier talking about Fairfield Greenwich:

Saulnier, who was upset during the interview, added: “It’s like a house of cards over at Fairfield Greenwich. I can’t get phone calls returned. It’s been devastating.”

And


Saulnier said he contacted the New York State Attorney General’s Office and was told officials there couldn’t help him because it’s a civil matter. He added that it may take weeks to sort out the mess.

Now, there is no sympathy here at The Audit for Fairfield Greenwich. We leave them to their fate, which will not be pretty.

But that obviously isn’t the point here. Not everything is Madoff-related just because someone says it is.

And there are a few things that qualify as red flags that appeared before publication. First, this is a minor point, but the New York AG handles civil matters all the time, so Saulnier is mixed-up there, at best.

Second, the story says the packages to an inaugural were sold in February, back when the nominations were still going on. Is that possible? Sure. Are such packages actually sold before the election? No.

(The text of the story actually says the tickets were sold to an Obama inaugural, including a meeting with Obama, which would have made the story of the packages preposterous on its face. Can you imagine the uproar if it were learned that Obama was selling tickets to his inaugural before the primary was even over? However, Joe Howry, the Star’s editor, who will get his full say in a moment, tells me that the reporting found that the tickets were actually sold as passes to a generic presidential inaugural. He says that in writing the story the paper “updated” the information to name Obama. A poor writing decision, to be sure, but that’s not the issue here. The question is how fishy were these “passes” before the story was published. Answer: pretty fishy, but not utterly out of the question.)

Third, the whole thing sounds a little convoluted—buying inaugural tickers in February from a charity that said it got them from a investment firm because…why?

Fourth, the accuser is not calling back and has “suspended” his operation.

Things get hairier when The Wall Street Journal two days later, on January 20, runs a similar story, more or less a lighthearted feature, that says PETA, the animal-rights group, complained that it, too, was a “far-flung” victim of the Madoff scandal, having bought its package from December Rain.

Called by the Journal, Saulnier this time said he had given the inauguration money not to Fairfield Greenwich itself but to unnamed investors in the feeder fund who had lost money when the dominos fell.

Still, even though the firm itself wasn’t named as being directly involved, the Journal—to its credit—soon ran an unusually detailed correction:

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014).

Follow Dean on Twitter: @deanstarkman.