A congressional panel has subpoenaed former Sen. Jon Corzine to testify next week about his role leading MF Global, a brokerage firm that collapsed this fall after a disastrous bet on European debt.
The Dec. 8 hearing will be a rare moment in Washington. Congressional historians and Capitol Hill insiders can't recall another time when a former member of Congress was summoned by his former peers to testify about a matter under federal investigation.
The House Agriculture Committee voted Friday to issue the subpoena after Corzine failed to reply to an informal request to appear at the hearing.
Chairman Rep. Frank Lucas, R-Okla., said his testimony is "essential to fulfill our objectives."
A spokesman for Corzine declined to comment.
MF Global filed for bankruptcy protection on Oct. 31. Corzine resigned as chairman and CEO a few days later. In just a week, stock investors lost an estimated $585 million.
Corzine has also been asked to testify later this month before two other panels, including the Senate Agriculture Committee. In that case, Corzine could face tough questions from former Senate colleagues.
Corzine, a Democrat, represented New Jersey in the U.S. Senate from 2001 to 2005. For two of those years, he led the committee that raised campaign money for Democrats seeking election to the Senate. He later served one term as New Jersey's governor before moving on to lead MF Global. He was also CEO of Goldman Sachs from 1994 to 1999.
Corzine has few goods options now that the committee has issued a subpoena. By law, he must appear at the hearing. Otherwise, he could be held in contempt of Congress and go to prison.
He could refuse at the hearing to answer their questions, invoking his Fifth Amendment right. That could diminish his credibility.
Still, if he cooperates with lawmakers, he could provide information that might come back to hurt him in criminal and civil investigations.
Corzine "is being whipsawed between the congressional subpoena and the looming criminal investigation," said Robert Mintz, a former federal prosecutor in New Jersey who heads the white-collar defense practice at McCarter & English in Newark.
"It's a unique situation that Jon's in," said Abbe Lowell, a defense attorney who was counsel to the House of Representatives and whose clients have included former Sen. John Edwards and former Nevada Gov. Jim Gibbons.
Regulators are looking into whether MF Global used money from customers' accounts for its own purposes as its financial condition worsened. That would violate securities rules. The FBI is investigating whether the firm violated any criminal laws.
An estimated $1.2 billion or more may be missing from customer accounts. Regulators say MF Global moved money out of customer accounts within days as the firm's cash dried up.
MF Global was one of the biggest players in the derivatives market. Derivatives are investments that are based on the value of an underlying asset, such as interest rates or oil prices.
No one at MF Global has been charged with a crime or civil violation.
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