Last Saturday, the NYT ran a breezy op-ed by Daphne Merkin, blaming widespread willful delusion for the Bernie Madoff debacle. No wonder. Her brother is the scam's biggest sucker.

In her op-ed, Daphne Merkin cast the Madoff scam not as the evil actions of one man and a handful of credulous money managers who funneled billions to him, but as a natural result of people buying into Madoff's "mishpocha, [a sense of] of being part of an extended family." And everyone who lost money was not a "victim":

No one was holding a gun to anyone's head, saying sign up with Mr. Madoff or else...
(Although those who were duped are referred to in the press as "victims," it seems to me it would be more accurate to define them as casualties. Victims are specifically sought out; casualties are an indirect consequence of some larger action.)

Daphne Merkin's parenthetical disclosure in the piece said, in full: "I did not know Mr. Madoff nor did I invest with his firm, but have a sibling who did business with him."

Quite the understatement, Daphne! Her brother is J. Ezra Merkin, the fabulously wealthy money manager who reaped millions from clients by, as the Times says, "placing all of the investors' eggs in Mr. Madoff's basket and charging a hefty fee for doing so." Merkin earned 1.5% of investor's capital (minimum investment: $500K) for handing their money over to Madoff. His Ascot Partners fund lost "nearly all" of its $1.8 billion.

Now Ezra, who had "what is believed to be the world's biggest collection of Rothko paintings," has shuttered his fund, resigned as chairman of GMAC, gotten tons of bad press, and is waiting for the wave of investor lawsuits that's surely coming his way.

So it's not all that surprising his sister, a contributing writer to the New York Times Magazine, would try to do a little PR for him. Don't blame the big financiers, this thing is everyone's fault, hey! But it is pretty surprising the Times would allow such an obviously conflicted piece to be published with such a paltry disclosure. And the Public Editor agrees. A reader forwarded us this email they received from Clark Hoyt this morning:

Dear Reader:

Thank you for writing about the Daphne Merkin Op-Ed in Sunday's Times. I agree with you that the disclosure that Ms. Merkin's unnamed sibling "did business" with Bernard Madoff was completely inadequate. Given the degree of J. Ezra Merkin's involvement with Madoff, I think much more needed to be spelled out — including name, nature of the relationship and the subsequent lawsuits — so that readers could make up their own minds about whether any of it was relevant to Ms. Merkin's argument that Madoff's victims should be called casualties because they were eager to invest with him. Of course, they wouldn't have been eager to do so if they had known he was a swindler. And it has been reported that, in at least one case involving J. Ezra Merkin, his clients did not know that their funds were going ultimately to Madoff.

I have corresponded with Andrew Rosenthal, the editorial page editor of The Times, who agrees that there should have been greater disclosure. Mr. Rosenthal does not contemplate an editor's note. I am considering what I want to do about this.

Sincerely,

Clark Hoyt
Public Editor
The New York Times