Several months ago, some political observers touted former New Jersey Democratic Sen. and Gov. Jon Corzine as a possible successor to Tim Geithner as Treasury secretary. Now, as Corzine prepares to appear before the House Agriculture Committee Thursday, he has to worry about possible legal action against him, The Hill
Such action would stem from last month’s failure of MF Global securities firm, which Corzine headed until he quit just before the company’s swan song.
The former Goldman Sachs co-chief executive came to MF Global after losing his bid for re-election as New Jersey governor to Republican Chris Christie. Corzine hoped to turn the sleepy commodities brokerage into a powerhouse investment bank along the lines of Goldman.
But Corzine had MF Global take a position of more than $6 billion in European government bonds as a debt crisis enveloped the continent. Corzine insisted upon a position of that size despite the warning of MF Global’s risk management chief that he was putting the firm in danger. The position soured as the debt crisis intensified, leading to MF Global’s collapse.
Now $1.2 billion of customer funds are missing and may have been used improperly to shore up the firm.
The Agriculture Committee will be the first of probably several congressional panels to investigate MF Global’s meltdown. The firm’s commodity trading comes under its purview. Corzine is likely to plead the Fifth Amendment rather than answer questions from his ex-colleagues.
The House Financial Services Committee will vote on a subpoena of Corzine Wednesday. “We had given his lawyer a couple of opportunities, and deadlines had come and gone to come and voluntarily do that,” said Rep. Randy Neugebauer, R-Texas, who chairs the panel’s subcommittee on Investigations.
Democrats aren’t coming to Corzine’s defense. The House Agriculture Committee approved its subpoena in a rare voice vote, showing clear bipartisan agreement.
The subpoena represents the bottom of a career arc that now looks like a Shakespearean tragedy.
“This is kind of the embodiment of his decline,” professor Brigid Harrison told The Hill.
“At one point, he was on top of the world,” said Harrison, a political science and law professor at Montclair University. “Now I think this is probably amongst the most humiliating moments of his life.”
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