A diminished and contrite Jon Corzine told lawmakers Thursday that he was sorry that up to $1.2 billion in customer funds had gone missing since the financial firm he ran went bankrupt, but that he had no idea where they went.
Testifying before the House Agriculture Committee after being compelled by subpoena, Corzine painted the final days of the collapse of MF Global as a hectic race to survive, but assured lawmakers that he never authorized any violations to keep it afloat.
“I simply do not know where the money is, or why the accounts have not been reconciled to date,” Corzine said.
In response to rapid-fire questions from lawmakers, Corzine was reduced to careful, halting answers couched in lawyerly qualification. The former New Jersey governor often referred to the “best of his recollection” or said he could not answer due to his lack of access to complete records since leaving the firm.
“Many transactions … occurred in those last chaotic days,” he said. “It would be very hard for me to speculate why or where that shortfall took place.
“I certainly would never intend to direct or have segregated funds moved.”
Corzine’s decision to answer questions came as a surprise, as many had expected him to invoke the Fifth Amendment.
Corzine sought to strike a balance between expressing remorse for the victims of MF Global’s failure and arguing that the burden should not be solely his to bear.
He acknowledged that the company’s former chief risk officer expressed concern about the growing investments on European debt taken on by the company, but said the board “arrived at a consensus” with him on the proper path forward.
He also pushed back against reports that he threatened to leave the firm if the board did not agree with his strategy, recalling instead a conversation where he said if the board “had lost confidence in me, I’d be wiling to step down.”
Corzine, a former Democratic senator and rumored candidate for Treasury secretary, took fire from both sides of the aisle.
His caginess drove Rep. David Scott (D-Ga.) to frustration, who called it the “height of disbelief” to accept that Corzine did not know more about the firm’s collapse.
“I understand the position you’re in, but Mr. Corzine, we’ve got to find that money,” he said. “We’ve got to get better answers than this from you because you are the CEO.”
The hearing often fluctuated between focused fact-finding, as lawmakers sought to learn more about the collapse, while shaming Corzine for MF’s failure.
Committee Chairman Frank Lucas (R-Okla.) asked several pointed questions about the shortfall in funds and opened the hearing by chastising Corzine.
“Thousands of your former customers across the country are experiencing severe financial hardship because of events that occurred under your watch,” he said.
Later, Rep. Dennis Cardoza (D-Calif.) cited his grandmother’s mantra when he asked if Corzine “always did the right thing when no one was looking.” He also tried to ascertain exactly how Corzine responded at the moment he learned that a large amount of customer funds had gone missing — the lawmaker suggested he would have “gone to the restroom and thrown up.”
Corzine assured him that he did strive to do the right thing, and reacted with “stunned disbelief” to the revelation.
On a few occasions, Corzine found himself having to defend his own personal fortune. Rep. Timothy Johnson (R-Ill.) asked Corzine, who largely self-financed his U.S. Senate run and New Jersey gubernatorial bid, if he would be willing to contribute some of his “substantial wealth” to help compensate customers who lost funds. And Rep. Steve King (R-Iowa) asked if Corzine expected to suffer a proportional loss to his personal wealth as those seen by afflicted customers.
Corzine tried to deflect the questions, reiterating hopes that the missing funds would ultimately be tracked down. But he told Johnson, “As I’m sitting here right now, I would not do that.”
He later told King that he “will certainly do those things that I can to help.”
Rep. Collin Petersen (D-Minn.), the ranking member of the panel, joked Thursday that he was not sure how to refer to Corzine, given his long and accomplished career.
“Governor, senator, I don’t know what to call you exactly,” he said.
“A lot of people have bad names,” Corzine quipped.
—This story has been updated.