The answer is pure self-interest. $4 million is nothing to a 97-year-old venture capital firm like Bessemer. It could easily write off its investment in Wikia, an attempt to capitalize on the anyone-can-edit wiki concept popularized by Wikipedia.

But Levine has invested his reputational capital in Wikia. Admitting he made a mistake in backing Wales means Levine would lose face with Bessemer's partners, who will be more likely to question his subsequent investments. (That he has also invested in Yelp and Diapers.com surely does not burnish his record.)

Levine would have us be impressed by the fact that Wales "volunteered to forgo his Wikia salary." This would be more impressive if Wales had not long ago forgone any pretense of doing any work to earn that salary. When Levine first invested in Wikia, Wales promised to spend 90 percent of his time on Wikia and 10 percent on Wikipedia. In fact, he spent nowhere near that proportion of time on either, focusing instead on an increasingly lucrative speaking career.

I'm inclined to feel sorry for Levine, who was clearly deceived by Wales, but is stuck defending him, lest he admit to the con. We will give Levine this much. In a recent blog post, he wrote, "Valleywag reported some nonsense about Jimmy getting fired because of a bogus expense report. Nothing could be farther from the truth."

What is uncontestably true: Levine was enraged when he learned that Wales tried to get Wikia to reimburse him for a $1,300 dinner with a private-equity investor, at which he primarily discuss ways to profit off of Wikipedia, not Wikia. But it is quite possible that Wales's attempted expense-account flim-flam was the least of his sins as CEO of Wikia, and that Levine actually fired him over more serious matters. If so, why doesn't Levine wash his hands of Wales, write off the investment, and tells us what Wales did? Otherwise, he'll find that he's only just begun his career of lying on Wales's behalf.

The cause? The same kind of expense-account hijinks that landed him in trouble at the Wikimedia Foundation, the nonprofit parent of Wikipedia.

In 2006, Wales was courting Marc Bodnick, a cofounder of Silicon Valley private-equity firm Elevation Partners, in an effort to find a way to profit from Wikipedia, despite its nonprofit status and volunteer contributors. Bodnick and an assistant had traveled to St. Petersburg, Fla., where Wikimedia was then based. The talks went nowhere, but Wales, his wife, Bodnick, and Bodnick's assistant had a $1,300 meal at one of the city's finest restaurants. ($600 of the bill was spent on wine.)

At that point, the Wikimedia Foundation had confiscated Wales's corporate card, so he paid for the meal himself. But he then sought to have it reimbursed by Wikia. Michael Davis, Wikia's chief operating officer, became enraged and reported the expense to Jeremy Levine, a Wikia board member and partner at Bessemer Venture Partners, which had invested $4 million into the company only a month before.

Levine then told Wales he was fired as CEO, and found Penchina, who had already made a fortune at eBay. Wales must hate that: Every time he sees Penchina, he must ask himself, "Why is this guy rich and I'm not?" Penchina, meanwhile, must be asking why Wikia is still paying Wales a salary.