I hear what you are saying, but if a site can rank position 1 for almost all relevant search terms with an algorithmic penalty then clearly the penalty is not severe enough. They really have our niche by the balls so I can't believe there is a penalty. It's disheartening to know that google simply will not acknowledge this. We've reported on WMF a few times and made various other attempts to make them aware of this blatant 'cheating'. Why can't they (Cutts himself viewed this thread) at least say what you have said. "They have a penalty, but we still rank them higher than everyone else" or as is more likely the case "they are a HUGE adwords customer so we wouldn't want to upset them". It stinks.