This week, House Republicans called for a criminal probe of Jon Corzine, the former New Jersey governor and former CEO of MF Global. Republicans allege that Corzine may have committed perjury when testifying in front of Congress after his firm's collapse.
Actually, Corzine personally ran MF Global into the ground.
In October 2011, MF Global declared bankruptcy after Corzine made a bad bet on $6.4 billion in European sovereign debt. After the collapse, more than $1.2 billion in client funds went missing.
Corzine has denied any wrongdoing, even though recorded conversations suggest that Corzine was directly responsible for illicitly redirecting customer funds.
This year, the Justice Department absolved Corzine of any wrongdoing, announcing that after 18 months, they couldn't find any evidence that he committed a crime. So Justice will not be filing any criminal charges against him.
Even though civil charges are pending, it's no coincidence that Corzine won't face any criminal charges or jail time, given the track record of cronyism within the Justice Department. There is also overwhelming evidence that Washington has turned a blind eye to his behavior in the past.
Just the Tip of the Iceberg
Given Corzine's connections, it will be difficult to pin much on him. That is the benefit of running Goldman Sachs and acting as a chief economic adviser to President Obama.
In the end, however, Corzine is just another breed of a sleazy pol – another man who embraces the privatization of profits for himself and the socialization of losses on taxpayers, pensioners, and ordinary Americans.
MF Global is just the tip of the iceberg when it comes to Corzine. In fact, it's staggering that the CFTC even allowed Corzine to engage in derivatives trading following his time as New Jersey governor.
In early 2008, as the financial crisis was just underway, then-governor Corzine raided the state's pension funds in order to stimulate the state economy.
Corzine's plan was to divert $250 million in state pension money into local banks. But it was hardly a fair approach. The money was actually diverted to construction unions and his political allies.
Corzine decided to help out his hurting Wall Street buddies. He used $178 million in pension funds to purchase Lehman Brothers stock, even though the warning signs of the company's epic collapse were clear around the time of the purchase.
The state pension fund lost $115 million in 90 days on Corzine's Lehman bet. And by the end of the year, this fund was underfunded by $2.6 billion. It will likely go insolvent by 2020.
Of course, no one in the U.S. government investigated Corzine's role in diverting public pensions to political allies or back to the friends he kept on Wall Street.
Nor will the Justice Department take any time to bring Corzine to justice for doing the same with his MF Global clients.
There's a pretty good reason for both.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.