Political slowdown in Corzine probe?
The implosion of MF Global appears to be the single most investigated event in recent Wall Street history. The FBI, two US attorneys, the Securities and Exchange Commission, the Commodity Futures Trading Commission and several congressional committees all say they’re looking into the firm’s spectacular collapse last fall — and at just who’s responsible for the mysterious disappearance of $1.6 billion in customer money in its final days.
Yet investigators say they’re having a tough time assigning culpability. Then-CEO Jon Corzine insists he was clueless about what was happening; mass confusion is the best explanation the probes seem to have found.
Don’t buy it.
The probers sifting through documents and taking depositions from witnesses are no doubt dedicated professionals, but their bosses are political — and that’s the best clue as to why a probe that’s allegedly been running full steam for six months has made such slow progress.
The bumbling Corzine, one of Wall Street’s most prominent Democrats, is a close ally of President Obama and one of his best bundlers of Wall Street campaign cash.
Obama has returned some of the money Corzine has donated personally, but not the cash Corzine collected from others for the presidential re-election campaign — meaning the taint from the MF collapse isn’t bad enough to stop Obama from accepting the money Corzine brings in.
Still, it would be pretty bad if a top presidential fund-raiser were implicated in the loss of more than a billion dollars of investor money. Many victims here were regular people — ranchers and farmers who used the firm to hedge their crops and livestock in the commodities market.
Again, the probers no doubt want to do the right thing, but the heads of the investigative agencies can hardly be described as impartial. Many are presidential appointees or at least have a vested interest in helping Obama avoid a major embarrassment.
The publicity hungry and hyper-ambitious Preet Bharara, the US attorney for the Southern District, as well as the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission, are all longtime Democrats.
Some, like Bharara, are fairly partisan Democrats looking for bigger future jobs. They have much to gain if the investigation doesn’t blow up before Election Day — so it’s pretty convenient that they keep hitting what we’re told are dead ends.
Bharara is rumored to be on the short list of possible successors to Attorney General Eric Holder in a second Obama term, as is FBI chief Robert Mueller.
In other cases, Bharara’s been so eager to drum up good press that’s he’s falsely taken credit for personally recording wiretapped conversations of alleged insider traders. Which makes it odd that he’s said so little about MF Global, the biggest scandal to develop on his watch — especially when we’ve got real victims here, whereas it’s usually impossible to trace investors’ losses in insider-trading cases.
Again, mounting a criminal or civil case is not a lay-up; you need to show intent to commit a crime. Corzine’s record on Wall Street and in government is that of a screw-up rather than a crook.
Maybe we’ll still get action — maybe some MF Global player will provide breakthrough eyewitness testimony, trumping any political reasons that could be slowing things down.
Still, not long after MF Global collapsed and the money went missing, there was little doubt that something bad had happened at the firm. Terry Duffy, the head of the Chicago Mercantile Exchange and the firm’s front-line regulator, publicly stated that the activities that led to the loss of customer money were so egregious as to be illegal.
That’s why some investigators would like to accept an offer from the attorney of MF Global’s former assistant treasurer, Edith O’Brien, that she provide a tell-all account about what went down — including how much Corzine knew or didn’t know about the missing money. But O’Brien wants immunity in exchange — and the word from the top of the Justice Department is that such blanket deals are rare, no matter how valuable the witness.
It seems they’re even rarer when the target is one of the president’s money men.
Charles Gasparino is a Fox Business Network senior correspondent.
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