Corzine: I have no idea where the money went
posted at 8:40 am on December 8, 2011 by Ed Morrissey
Jon Corzine goes to Capitol Hill today to answer questions about the disappearance of as much as $1.2 billion in the collapse of MF Global under his leadership. The former Democratic governor of New Jersey and current fundraising bundler for Barack Obama might not have too much to say to the House Agriculture Committee. In his opening statement, he plans to tell investigators that he had no idea that customer money had been raided to float the company’s bets on risky European sovereign debt — and then will apparently invoke the Fifth Amendment the rest of the day:
A contrite Jon S. Corzine will express both sorrow and a firm defense of his actions Thursday in his first public appearance since the collapse of MF Global Holdings Ltd. in late October.
“Recognizing the enormous impact on many peoples’ lives resulting from the events surrounding the MF Global bankruptcy, I appear at today’s hearings with great sadness,” Mr. Corzine plans to say in testimony prepared for a hearing by the House Agriculture Committee, which subpoenaed the former MF Global chief executive Friday. A copy of the testimony was released early Thursday on the panel’s website. …
The trustee overseeing MF Global’s liquidation estimates the amount at $1.2 billion. Mr. Corzine will say in his testimony that he had little to do with the mechanics of moving customer cash and collateral and that he was “stunned” when he learned on Oct. 30 that the money was missing.
“I simply do not know where the money is,” he will say, noting that “there were an extraordinary number of transactions during MF Global’s last few days.”
Oh, yeah, an extraordinary number of transactions. Who could be expected to keep up with them? Well, the CEO of the company is expected to keep up with them, for one thing, especially if the “extraordinary number of transactions” took place in defense of his own trading strategy. The Wall Street Journal piece makes it clear that Corzine authored the risky play in European sovereign-debt bonds, which caused the failure of MF Global. Are we to believe that Corzine had no idea that the firm’s cash got burned up on his own bets, and then had no idea that the extra money that attempted to salvage their position came from customer funds after MF Global ran out of money?
Actually, it may be difficult to know what we’re supposed to believe. Corzine probably won’t be providing a lot of answers to questions from the panel. Since he and the firm are under criminal investigation, it’s almost certain that Obama’s big bundler and high-profile liaison to Wall Street will be invoking his Fifth Amendment right to avoid self-incrimination during his subpoena-driven appearance in this hearing. That should provide some interesting sound bites for the media later today, assuming that they’re interested in Democratic fat-cat bundlers on Wall Street who raise big money for Democratic politicians while destroying smaller investors to the same degree that they report on less-directly connected executives at places like, say, Enron and MCI. I imagine that most of those media outfits will also be taking the Fifth on that question.