Convicted fraudster Bernard Madoff had a surprising victim in right wing circles in Washington, DC: the Hudson Institute, a think-tank closely allied with the neoconservative cause, according to sources and documents. The previously undisclosed loss by Hudson shows that the economic turmoil and white-collar fraud is apparently taking its toll among the neocons, who have already been somewhat marginalized.
Though bilked by Madoff, the Hudson Institute actually works with another convicted felon: former Cheney staffer I. Lewis "Scooter" Libby. Libby was brought on board as an "adviser" to Hudson shortly after his departure from Cheney's service and his 2005 indictment in the Valerie Plame case. Libby, whose sentence was commuted by President Bush, still has an office at The Hudson Institute's Washington, DC, headquarters at 15th Street, NW.
Just last September the Hudson Institute also hired Douglas Feith, the neoconservative former Pentagon official who was so supportive of notorious Iraqi exile Ahmad Chalabi in the run-up to the Iraqi war. It was Feith whom General Tommy Franks famously referred to as "the dumbest... on the planet." Another Hudson fellow is a writer named Nibras Kazimi, a former aide to Chalabi.
But while Hudson's board makes provocative hiring decisions, its investment choices may have been far worse. A source told me Hudson invested millions with Madoff. The 162 page list of Madoff's victims released in February includes Hudson, but not the details, and Hudson didn't respond to requests for information.
The Hudson Institute's 2007 tax filing with the IRS, however, shows a $2 million investment in an unnamed "hedge fund." The group's total assets that year are listed as $14 million. If the "hedge fund" is in fact the Madoff investment, that makes the loss a hefty hit for the think tank, at a tough time.
The Hudson Institute was founded in 1961 by Cold War arms strategist Herman Kahn, said to be the inventor of the doctrine of "Mutually Assured Destruction" or MAD. He often considered the model for the title character in the Peter Sellers movie "Dr. Strangelove."