Corzine: No, I really didn't know about customer-fund transfers

Here’s a question, and I intend this one sincerely: what the hell are Jon Corzine’s lawyers thinking when they allow him to testify to Congress?  After a new witness testified this week that Corzine knew of — and ordered — the transfer of customer funds to cover his big bets on European sovereign debt, Corzine finds himself in position to get indicted for perjury, having previously denied that he had any connection to those transfers.  Sure enough, Corzine appeared before Congress again yesterday in an attempt to talk himself out of trouble, a very curious strategy for a man facing the business end of a criminal investigation of the disappearance of $1.2 billion:


“While the last few days of MF Global were chaotic, I did not instruct anyone to lend customer funds to MF Global for any of its affiliates, nor was I told that anyone had done so,” he said.

Corzine said Duffy might have been referring to problems Corzine encountered days before MF Global sought bankruptcy protection, when he was trying to raise cash by selling billions of dollars of securities. …

Later that day, J.P. Morgan Chase contacted Corzine again and said it needed assurances that the transfer of funds did not violate federal rules, Corzine said. Corzine said MF Global’s Chicago staff “explicitly confirmed to me that the funds were properly transferred, and I understood that J.P. Morgan Chase was satisfied, since they executed . . . billions of dollars of trades with MF Global.”

On Tuesday, the head of the firm auditing MF Global said that a senior female executive told them that Corzine knew of at least $175 million borrowed illegally out of a customer account to cover those bets.  If that witness comes forward and auditors can unravel the transactions in the manner to which Terrence A. Duffy, the chief executive of CME Group testified, then Corzine has followed one materially false statement with another.  That will make it very difficult to walk back a perjury charge later, and in fact might add a second count.


Perhaps Corzine is telling the truth about this, although legally it won’t make a lot of difference, since he’s going to be held civilly responsible for the loss of the funds at the very least.  As CEO, Corzine had ultimate responsibility to safeguard those accounts, and since the funds went to shore up his own controversial investment strategy, no one’s going to buy (in the civil context, anyway, if not the criminal context) that Corzine didn’t know where the money originated to attempt the rescue of MF Global’s play.  But even if he doesn’t end up creating a perjury account, an adept legal team would know better than to have a client put himself in position for this kind of exchange:

Rep. Steve Pearce (R-N.M.) mocked Corzine’s apologies and his statements that he sympathizes with MF Global customers hurt by the bankruptcy.

“What hotel are you at here in the city?” Pearce asked, repeating Corzine’s barely audible answer: “The Ritz Carlton — did I hear it correctly?”

“How many of the 36,000 clients that were defrauded have you called personally?” Pearce asked.

“None,” Corzine said.

Alluding to the fortune Corzine made as head of Goldman Sachs, Pearce asked, “Have you created a scholarship for any of the families that have been disadvantaged, people just to help them out with maybe their college funds? Yes? No?”

“Congressman, the answer is no,” Corzine said.


Yeah, that’ll help when it comes to making the case for Corzine’s remorse.

The NRCC has published a video reminding everyone of Corzine’s political affiliation and connections to the Obama administration. Once again, the WaPo does identify him as a Democrat and former Senator and Governor, but fails to mention Corzine’s status as a bundler and rainmaker for Obama on Wall Street, so the NRCC provides this helpful reminder:

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