Jon Corzine, a Democrat who was the former Democrat governor of New Jersey and a Democrat Senator who bundled huge amounts of Democrat money for Democrat President Barack Obama…
… look, bear with me here, people. The rest of the media rarely references Corzine’s party affiliation or significance to Obama’s re-election effort, so I’m just making up for lost time. Think of it as a “balanced approach,” to borrow the President’s favorite term for deficit reduction.
… anyway, Corzine was cited early in the Obama years as a financial guru, and after digesting the House Financial Services Subcommittee’s report on the collapse of Corzine’s brokerage, MF Global, it’s easy to see why. As reported by CNN, the Subcommittee concluded that Corzine’s “reckless tactics doomed the firm and ultimately led to a shortfall of $1.6 billion in customer funds.” Why, that’s exactly how Barack Obama runs the federal government! Just multiply all the numbers by about 60, to account for eight years of trillion-dollar deficits.
CNN does mention Corzine’s politics, in the only context the media generally bothers with: as a way of insinuating that House investigations of him are partisan food fights, because Republicans run the House. But note that Corzine’s Democrat defenders don’t really have much to say, beyond mumbling that they want more time to read the report before they tack on a few pages of their own:
In a summary of a report due for release on Thursday morning, Rep. Randy Neugebauer of the House Financial Services Subcommittee on Oversight and Investigations said Corzine “dramatically changed MF Global’s business model without fully understanding the risks associated with such a radical transformation.”The Republican-led subcommittee didn’t directly address whether laws were broken at MF Global, but provided sharp criticism of Corzine’s management. Mike Capuano, the subcommittee’s ranking Democrat, said that while he agreed with a number of the report’s observations, he was not signing onto it because of insufficient time for review. He and other Democrats will instead submit an addendum to the majority’s findings.
Corzine, a former Democratic senator and New Jersey governor who made his fortune as the head of Goldman Sachs (GS, Fortune 500), was called before lawmakers several times in the aftermath of MF Global’s collapse last year. His spokesman, Steven Goldberg, disputed a number of assertions in the subcommittee’s report, saying Wednesday that Corzine “acted in good faith and did what he believed was necessary to turn around MF Global.”
MF Global investors should all get bumper stickers that say, “Jon Corzine made a billion dollars of my money disappear, and all I got was a lousy addendum.”
CNN offers a refresher on what happened at MF Global:
MF Global failed after its disclosure of billions of dollars worth of bets on risky European debt sparked a panic among investors. The firm was left scrambling for cash to make good on its obligations and ended up tapping customer funds, failing to replace them in violation of industry rules and leaving a shortfall of $1.6 billion.
Many of the roughly 38,000 customers left in the lurch were individual investors and farmers who used futures contracts to hedge against price fluctuations for their crops. Customers who traded on U.S. exchanges have since received roughly 80% of their money back, though customers trading on foreign exchanges have just 5%, according to the court-appointed trustee tasked with recovering the funds.
(Emphases mine.) A Wall Street predator who broke the rules to screw over the little guy? That sounds like the sort of ruffian that Barack Obama pledged to protect us from. But nothing ever seems to happen to Jon Corzine… or, really, any of the other truly predatory financial types. Even the great financial disaster of 2008 – routinely portrayed as the crime of the century by a political class that desperately wanted to avoid discussing its own role in creating the situation – wrapped up without any specific individuals accused of wrongdoing.
Some MF Global customers are still pressing suit against Corzine for violating the law and neglecting his fiduciary duties. Keep in mind that recovering 80 percent of lost funds after a year of effort doesn’t mean you only lost 20 percent. The time involved in recouping those losses must be factored into any ultimate assessment of the damage, along with the cost of opportunities lost while so much money was left floating in the void.
As for Corzine, the Wall Street Journal checked up on him at the end of October:
Mr. Corzine, a Democrat, was a prominent supporter of President Barack Obama and in 2011 hosted at his Manhattan home a major fundraising event for the president’s re-election. The admission price was reported to be as much as $35,800.
Although MF Global’s failure turned Mr. Corzine into a political liability, he remains deeply interested in public policy, people close to him say. Early last year, he was an election monitor in Nigeria.
This year, Mr. Corzine worked on a service project in Central America and relaxed in France, where he and his wife have a pied-à-terre. He also spent time running and golfing with friends on Long Island. He sold his Hoboken, N.J., penthouse for $2.8 million, or 14% less than its 2008 purchase price.
Always an avid trader, Mr. Corzine continues to buy and sell investments with his own money from an office he set up in Midtown Manhattan, says a person who has spoken to him.
He’s spent about $5 million dealing with the legal fallout from MF Global, which isn’t that much money for him – he was house-shopping in that price range in France. And don’t worry about his state of mind, because while he’s reportedly “restless and frustrated” after the catastrophe at his brokerage sidelined him, “he is optimistic about eventually making a comeback and has kicked around the idea of managing money after the MF Global mess is cleaned up, according to friends.”
Or maybe he could be Treasury Secretary or “Secretary of Business” in the second Obama Administration. Why not? He’s better at placing risky bets with other peoples’ money than anyone except his prospective boss.