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:

Corrections & Amplifications
Investment firm Fairfield Greenwich Group said it hasn’t had any dealings with a Chicago-based charity called December Rain. A Jan. 20 Deals & Deal Makers article said that investors of the firm sold inaugural-event tickets to December Rain, but the Journal didn’t reach any Fairfield Greenwich investors or the firm for comment before the article was published. The Journal can’t verify that December Rain paid investors, whom the charity declined to name, for the tickets. December Rain did auction off what it said were inaugural tickets and promised winners access to inaugural events sponsored by political organizations and lobbying groups. However, some of those organizations, including the Democratic National Committee, the American Medical Association and the Pharmaceutical Research and Manufacturers of America, deny that they held the events promoted by December Rain. Paul Saulnier, the executive director of December Rain, whom the Journal incorrectly identified as Philip Schein in the article, said Tuesday that he stepped down from the organization. He didn’t return calls and emails Wednesday, and he didn’t put the Journal in touch with his lawyer, as he offered.

The reason? The support for the assertion that Fairfield Greenwich was in any way involved rested on Saulnier alone, and other claims he made could not be independently verified. His refusal to return phone calls impaired whatever credibility he may have had, considering, remember, that he was the one who reneged on the bargain.

Fairfield Greenwich’s connection to December Rain disappeared with Saulnier.

For his part, Howry, the Star’s’s editor, defends his paper’s decision-making in publishing and in declining to run a correction.

He says that in reporting the story, the paper was mediating between competing claims, as newspapers often do, and that the proper course was to include all the known facts and let both sides have their say.

“We’re sitting here in limbo, trying to report it as best we can,” he says. “You can only go so far.”

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.