Jon Corzine: The Face of American Crony Capitalism

By: Money_Morning

Garrett Baldwin writes: 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.

According to documents unearthed by the Government Accountability Institute, MF Global was a client of Covington & Burling, the former law firm of Attorney General Eric Holder and Assistant Attorney General Lanny Breuer.

For a long time, many assumed that Corzine had been excused because he had bundled more than $500,000 for the Obama campaign. But the GAI discovered, coincidentally of course, that Holder's law firm was owed $114,275.55 "for services rendered prior to Oct. 31, 2011."

Many in Washington have sought a special prosecutor on this case and, of course, for other Obama scandals.

There will be no justice in this case. No jail time. No significant fines or personal accountability.

Mr. Corzine will walk because he is part of the protected class, a scrum of crony capitalists who have made their living by reaching into the pockets of other Americans rather than producing anything of value to society.

Cronyism of this type is hardly new to Washington. The Bush administration had a very close relationship with leaders at Enron, another firm that forced shareholders into dumping their pensions into the stock while the top guys sold their shares knowing the company was headed south.

When it comes to men like Jon Corzine, all one needs to do is simply look at the facts and realize the dangers of his influence on the key decision makers in the United States today.

I'll leave you with this picture - It provides the clearest glimpse of where we stand today

Source :http://moneymorning.com/2013/08/09/jon-corzine-the-face-of-american-crony-capitalism/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.