Former New Jersey Gov. John Corzine is cited for most of the blame for last year's collapse of the brokerage firm MF Global. Findings out today by a House panel add a new chapter to the rollercoaster career of this captain of industry and Garden State public servant. Herb Jackson, the Washington, D.C., correspondent for the Record of Bergen County spoke to NewsWorks Tonight host Dave Heller to explain.
The panel's report tells the story of Corzine trying to turn around a troubled MF Global by buying European debt. Wall Street rating agencies thought the company was too exposed to risk, so they issued a downgrade — at the same time MF Global was reporting a negative earnings report. This led to a run on company stock.
The company tried to sell itself off, and in the final days of that process, it was discovered that there was money missing from client accounts, an uncommon situation in even the largest of the implosions of the financial crisis. There is still no resolution as to what happened to that money, who took it and how it happened, as several criminal investigations and civil cases are still pending.
The panel decided that it was Corzine's risk-taking that took the company under and put their customers at risk.
Jackson said that Corzine was a lousy politician. After a successful career in bond trading, Corzine gained a reputation in the political world as one of the big soft-money donors — "the Democratic Wall Street guy," said Jackson.
He ran for the U.S. Senate on a largely self-funded ticket, but when Jim McGreevy resigned the office in 2004, Corzine decided to run for governor.
In Trenton, "he found that when you're the CEO of a company, you can tell people, 'This is how it's going to be,' and it doesn't work that way when you're the CEO of a state," said Jackson. As governor he had a hard time convincing voters of the merit of his ideas.
"'Politics isn't the art of convincing people you're right. It's the art of convincing people you agree with them,'" Jackson said, paraphrasing a political consultant acquaintance.
"Corzine never had that."