I wrote last week about how Republicans have a golden issue to (properly) tie the Obama administration to the Wall Street shenanigans, and to demonstrate that our financial problems are not problems of capitalism, but rather are problems of enforcement and Democrat corruption.
It’s been in the news that MF Global may have “borrowed” (better words are “fraudulently misappropriated” or just “stolen”) about $600 million of money that belonged to its clients, not it. That is horrible enough. But now this week, it’s coming out that Corzine lobbied the Democrat-controlled CFTC board (3 Democrats, 2 Republicans) to block regulation which would have prevented it from borrowing as much as it did, and specifically borrowing from customer accounts. It looks like Corzine personally called Gary Genzler to lobby about this issue the day the CFTC was supposed to vote on it. The CFTC ended up not passing the regulation. Here is a good summary. Here is another good article.
Republicans in the House ought to call Corzine to testify. They could ask-
- Did Corzine discuss the pending regulation with any other members of the Obama administration?
- By the way, what DID happen to all that client money?
- Corzine criticized Lehman for its 35:1 leverage. How does he feel about MF’s 45:1 leverage?
- What other contacts on other issues did Corzine have with the Obama administration regarding financial regulation?
- What does Corzine feel now should be done to regulate financial companies?