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Jon Corzine paused, gathered his thoughts, and responded by invoking his own roots. ”My father was one of those folks who went to the grain elevator and hedged out future crops,” he said, with all the feeling he could muster.
It was midway through a House agriculture committee hearing called to investigate the collapse of MF Global, the broker dealer, and the former Democratic senator and governor of New Jersey was asked what he would say to those, many of them farmers, who were suffering as a result of his company’s demise.
It was Mr Corzine’s first appearance in public since MF Global plunged into bankruptcy on October 31 under his watch, with an estimated $1.2bn in customer funds still missing.
The hearing was a deeply humbling moment – and a professional low point – for a man who had scaled the heights of both Wall Street, becoming a senior executive at Goldman Sachs, and American politics.
Sporting a dark suit, dark tie and crisp white shirt, Mr Corzine appeared pained and contrite in a setting – a congressional hearing room – that was highly familiar to him. As he began reading from his prepared testimony, often grasping the paper tightly with both hands, Mr Corzine declared: “I am devastated by the enormous impact on many people’s lives resulting from the events surrounding the MF Global bankruptcy.” Mr Corzine added: “Their plight weighs on my mind every day,” as his wife, a psychotherapist, sat behind him lending support.
When the barrage of questions followed, beginning with Frank Lucas, the Oklahoma Republican who chairs the committee, Mr Corzine conceded little about his responsibility in the downfall of the company and the lost accounts. “Why is there a shortfall?” asked Mr Lucas. “It would be very hard for me to speculate,” Mr Corzine said. “Did you authorise a transfer of customer funds from the segregated accounts?” Mr Lucas continued. Mr Corzine responded: “I never intended to break any rules.”
As the grilling dragged on over more than three hours, with one break, Mr Corzine gained in confidence, even as he fended off increasingly pointed attacks on his decisions as chief of MF Global and, in some cases, his integrity.
Jean Schmidt, an Ohio Republican, took Mr Corzine to task for investing “people’s money without their knowledge” in risky sovereign debt. Mr Corzine acknowledged that “it would have been better to have taken different judgments”.
Dennis Cardoza, a California Democrat, challenged Mr Corzine on whether he had lived by Mr Cardoza’s grandmother’s mantra to always do the right thing even when people were not looking. “Every effort and intent of my actions were to do the right thing,” Mr Corzine said. Mr Corzine was then asked what his first reaction was when he heard that so much money had been lost, and the answer was that he told his colleagues to go back and “check their work”. But the congressman quipped that he would have “thrown up”.
Tim Huelskamp, a Kansas Republican, wanted to probe Mr Corzine’s relationship with the White House. But Mr Corzine emphatically said that he had no conversations with the Obama administration about his company’s financial travails. And Tim Johnson of Illinois wanted to know if Mr Corzine would replace the lost funds with some of his own money. “My own expectation even at these late hours is that the money will be recovered,” Mr Corzine said hopefully. Once the hearing was over, Mr Corzine sped through the halls of the Longworth Office Building to the elevator, only saying tersely that it had been “a long day”.
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