Corzine Dodges Blame For MF Global's Collapse
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Over on Capitol Hill today, former Senator Jon Corzine returned to Congress, not because he wanted to. Corzine was once CEO of the most successful bank on Wall Street. He left Goldman Sachs for the Senate, then was elected governor of New Jersey. Now, he finds himself in a much less vaunted position. Today, he answered lawmakers' questions about how the company he headed for the past year and a half wound up in bankruptcy, with a bunch of money missing.
NPR's Yuki Noguchi has the story.
YUKI NOGUCHI, BYLINE: Photographers vied for a good shot as Corzine entered the room today to face the House Agriculture Committee.
Until late October, Corzine was the CEO of MF Global. The main question for him now is: Where is the missing money, $1.2 billion? It's a question Corzine couldn't answer.
JON CORZINE: I simply do not know where the money is or why the accounts have not been reconciled to date. As the chief executive officer of the MF Global Holding Company, I ultimately had overall responsibility for the firm.
NOGUCHI: But Corzine said he has had little access to the documents necessary to be able to answer any questions. In its final days, he said there were huge volumes of transactions, and he could not be sure where the money went.
Appearing tired at times, Corzine wanted to make sure people understood he's sorry.
CORZINE: As the chief executive officer of MF Global at the time of its bankruptcy, I truly apologize to all those affected.
NOGUCHI: Until Corzine took the helm last year, MF Global was a centuries-old firm involved in the relatively unexciting business of trading in commodity futures. Corzine was part of the leadership's ambitious plan to transform the company into a big investment banking firm.
His first big move at MF Global was to bet big on European debt. Corzine thought the payoff will be huge, but it drew objections from the firm's chief risk officer who was forced out. The big bet soured of course and cost the firm its ratings. Customers quickly lost confidence and the firm went into a downward spiral.
Corzine wasn't in the hot seat over a bad investment, though. The focus of the hearing was whether MF Global ended up using its clients' money to cover losses.
Frank Lucas is the Republican chairman of the Agriculture Committee.
REPRESENTATIVE FRANK LUCAS: Mr. Corzine, is there a shortfall in the customer funds that MF Global was legally required to keep segregated?
CORZINE: Mr. Chairman, I know only what I read. And it certainly was true on the late evening of the 30th of October that there were unreconciled accounts.
NOGUCHI: Republican Timothy Johnson pushed Corzine, a multimillionaire, to commit to putting his own money on the line.
REPRESENTATIVE TIMOTHY JOHNSON: My question for you on behalf of these people - who are largely small farmers, small businesses, coops all over the country - assuming that they're not made whole, are you and other executives of your company willing to stand the loss with your personal fortunes and allow them to be compensated and made whole?
JOHNSON: Either yes or no, it's fairly simple.
CORZINE: Congressman, I don't think this will go unresolved.
JOHNSON: Assuming it does go unresolved through the system, and it appears that there's a lot that has fallen through the cracks, are you willing to commit that you will commit yours and the other executives' personal fortunes to...
CORZINE: As I'm sitting here...
NOGUCHI: In case you missed it, Corzine said he would not do that. But there are those already going after Corzine and MF Global executives. Employees have filed a suit. Corzine will have plenty of other opportunities to answer questions. He has been called to appear two more times before other House and Senate committees this month.
Yuki Noguchi, NPR News, Washington.
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