Obama’s “Wall Street Guy” Lobbied Regulators For Rules That Pleased Him, Leaving MF Global Customers To Face The Consequences

OBAMA LAUDED JON CORZINE AS HIS “WALL STREET GUY” WHO HELPED CRAFT THE STIMULUS

Obama: Corzine Is “Our Wall Street Guy.” “The rollout also provided a showcase for Corzine, the former Goldman Sachs CEO whom Obama referred to as ‘our Wall Street guy’ at a meeting of Democratic governors in Chicago on Friday.” (Claire Heininger, “Corzine Profile Rises In Obama Camp,” The Star-Ledger (NJ),6/23/08)

Obama: Corzine “Was An Ally With The Obama Administration In Helping Us Develop A National Recovery Plan.” OBAMA: “Jon Corzine wasn’t just the first governor to pass an economic recovery plan for his state; he was an ally with the Obama administration in helping us develop a national recovery plan.” (President Obama, Remarks By The President At New Jersey Rally For Governor Jon Corzine, Holmdel, NJ, 7/16/09)

• Watch Obama’s Comments Here

Vice President Biden: “Jon Corzine Helped Craft The Recovery Act.”BIDEN: “It’s not coincidental that that’s what the Recovery Act is. Jon Corzine helped craft the Recovery Act. It’s not coincidental that the things he did here turned out to be the exact same things the recovery act has because way back in the transition period before we were sworn in, when Barack Obama and I were literally sitting at a desk in a high rise in Chicago beginning to plan how we would try to get this economy out of a ditch, literally the first guy I called was Jon Corzine. Not a joke. Not a joke. Because first of all, he’s the smartest guy I know in terms of the economy and on finance.” (Vice President Joe Biden, Remarks, NJ, 5/7/11)

• Watch Biden Say That Corzine “Helped Craft” The Stimulus

In The Early Days Of The Obama Administration, Biden “Literally” Called Jon Corzine For Advice On The Economy Because “He Knew About The Economy … And We Trusted His Judgment.” “‘I literally picked up the phone and called Jon Corzine and said Jon, what do you think we should do,’ Biden said. ‘The reason we called Jon is that we knew that he knew about the economy, about world markets, how we had to respond, unlike almost anyone we knew. It was because he had been in the pit — because he had been in the furnace. And we trusted his judgment.’” (Conor Friedersdorf, “Obama’s Team Relied On Jon Corzine For Economic Advice,” The Atlantic, 11/14/11)

• Watch Biden Say The Obama Team Relied On Corzine For Economic Advice

Corzine Was The Obama Campaign’s Wall Street Liaison

Corzine Played A “Central Role” In Obama’s Wall Street Fundraising Efforts. “His new legal troubles, sparked by the bankruptcy filing of his investment firm, MF Global, could complicate the president’s efforts to raise money from the financial community given Corzine’s central role in those efforts.” (Michael Isikoff, “Corzine, Top Obama Fundraiser, Under FBI Investigation,” MSNBC, 11/2/11)

Corzine Bundled Over $500,000 For Obama’s Reelection Campaign. (Center For Responsive Politics, Open Secrets, Accessed 5/22/12)

• The Obama Campaign Has Not Returned The Bundled Money. “Corzine was one of 41 donors who bundled more than $500,000 this year for Obama’s re-election effort, according to documents released by the campaign Oct. 14. The campaign doesn’t plan to return those bundled donations and will evaluate other contributions from MF Global employees on a case-by-case basis, according to the Democratic official.” (Hans Nichols, “Obama Returns $70,000 In Corzine Donations,” Bloomberg, 12/23/11)

 CORZINE PERSONALLY LOBBIED REGULATORS SO HE COULD CONTINUE HIS RISKY BETS AT MF GLOBAL

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While At MF Global, Corzine Borrowed Money From Other Accounts To Fund Firm Trading, A Practice Known As “Internal Repo.” “At MF Global, his strategy was simple: ‘We are transforming from sort of an old-like brokerage firm into an investment bank’ Corzine told CNBC’s Maria Bartiromo. Key to his plan was a massive bet on European government bonds – a bet that would swell to more than $6 billion, and ultimately lead to MF Global’s collapse. Corzine’s bet could not have occurred without a finance strategy known as ‘internal repo.’ In essence, MF Global was borrowing money from customer accounts and using it to fund trading in another part of the firm. During the summer of 2011, however, just months before MF Global filed for bankruptcy, internal repo was a strategy regulators were hoping to do away with.” (Jason Breslow, “How Corzine Steered Regulators To Protect Fatal MF Global Bet,” PBS, 5/22/12)

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More bad news for those who lost their money in MF Global’s bankruptcy just days before the House Financial Services Committee conducts another hearing.

It Is Unlikely The $1.2 Billion Missing From MF Global Customers Will Ever Be Recovered. “Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.” (Scott Patterson And Aaron Lucchetti, “Money From MF Global Feared Gone,” The Wall Street Journal , 1/30/12)

• “The Findings So Far Suggest That A ‘Significant Amount’ Of The Money Could Have ‘Vaporized.’” “As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a ‘significant amount’ of the money could have ‘vaporized’ as a result of chaotic trading at MF Global during the week before the company’s Oct. 31 bankruptcy filing, said a person close to the investigation.” (Scott Patterson And Aaron Lucchetti, “Money From MF Global Feared Gone,” The Wall Street Journal , 1/30/12)

Which Means Either MF Global Had “Extremely Poor Accounting Controls” Or “Unlawfully Appropriated” The Money. “He said that leaves two possibilities: Either MF Global had ‘extremely poor accounting controls’ and is unable to track down the money, or the funds were unlawfully appropriated.” (James O’Toole, “The MF Global Money Chase,” CNN Money, 12/6/11)

• “In The Latter Scenario, Staff From MF Global Could Potentially Face Criminal Charges, And The FBI Is Now Investigating The Case.” (James O’Toole, “The MF Global Money Chase,” CNN Money , 12/6/11)

Lawmakers Are Pushing For Answers From Jon Corzine, Former MF Global Chairman. “Lawmakers have pushed for answers from Jon S. Corzine, the former New Jersey governor and Goldman Sachs Group Inc. chairman who led MF Global into its big European bet and was CEO when the company failed. On Thursday, a House Financial Services subcommittee will zero in on the securities firm’s risk-management practices and the role of credit-rating firms in the collapse. Among the people scheduled to testify at the hearing is Michael Roseman, a former chief risk officer at MF Global who raised serious concerns several times in 2010 about the growing bet on European bonds by Mr. Corzine.” (Scott Patterson and Aaron Lucchetti, “Money From MF global Feared Gone,” The Wall Street Journal , 1/30/12)

• President Obama: Corzine Is “Our Wall Street Guy.” “ The rollout also provided a showcase for Corzine, the former Goldman Sachs CEO whom Obama referred to as ‘our Wall Street guy’ at a meeting of Democratic governors in Chicago on Friday.” (Claire Heininger, “Corzine Profile Rises In Obama Camp,” The Star-Ledger (NJ),6/23/08)
• Obama: “Jon Corzine wasn’t just the first governor to pass an economic recovery plan for his state; he was an ally with the Obama administration in helping us develop a national recovery plan.” (President Barack Obama, ” Remarks By The President At New Jersey Rally For Governor Jon Corzine ,” Holmdel, NJ, 7/16/09)
• Watch Obama’s Comments Here

• In The Early Days Of The Obama Administration, Biden “Literally” Called Jon Corzine For Advice On The Economy Because “He Knew About The Economy … And We Trusted His Judgment.” “‘I literally picked up the phone and called Jon Corzine and said Jon, what do you think we should do,’ Biden said. ‘The reason we called Jon is that we knew that he knew about the economy, about world markets, how we had to respond, unlike almost anyone we knew. It was because he had been in the pit — because he had been in the furnace. And we trusted his judgment.’” (Conor Friedersdorf, “Obama’s Team Relied On Jon Corzine For Economic Advice,” The Atlantic , 11/14/11)
  
  
• Corzine Played A “Central Role” In Obama’s Wall Street Fundraising Efforts. “His new legal troubles, sparked by the bankruptcy filing of his investment firm, MF Global, could complicate the president’s efforts to raise money from the financial community given Corzine’s central role in those efforts.” (Michael Isikoff, “Corzine, Top Obama Fundraiser, Under FBI Investigation,” MSNBC , 11/2/11)
• Jon Corzine Has Bundled Over $500,000 For Obama’s Reelection Campaign. (Center For Responsive Politics, Opensecrets.Org, Accessed 10/31/11)