An Insider Helping Out Fellow Insiders

Few men have a resume quite like Jon Corzine. Not only has Corzine served in the U.S. Senate and been governor of New Jersey, he has also been the CEO of Goldman Sachs and the recently imploded brokerage firm MF Global. The insider blood filtrated through cronyism and the endless squandering of the public dime flows heavily through his veins.

When MF Global went belly up [20] back in the fall, Corzine was finally revealed for the inept, overly connected bureaucrat he really is. Corruption seemingly follows the former Senator, Governor, and banker like shadows on a sunny day. Earlier this week, New Jersey was declared the least corruptible state in the union much to the surprise of, well, everyone. But as the great Jonathan Weil pointed out [21], the methodology in the study conducted by the Center for Public Integrity was horribly flawed. New Jersey has historically been defined with corruption:

…this is a state where in 2009 three mayors, two assemblymen and five rabbis were among 44 charged in a single money-laundering and bribery sting by the Federal Bureau of Investigation [22]. One of those mayors, Peter Cammarano, was from Hoboken, where I live. He was sentenced to 24 months in prison. Five years before his arrest, another former Hoboken mayor, Anthony Russo, pleaded guilty to corruption charges. His son now sits on the city council.

Corzine was of course acquainted with one of the mayors listed and a member of his own cabinet faced investigation by the FBI [23]during the same time period. And that was only the man’s tenure as Governor. Anyone who spends their time horse-trading in Congress is instantly guilty of corruption by definition. Corzine was especially so as he coauthored the Sarbanes-Oxley financial regulatory bill which heaped another expense [24] on start up businesses to the benefit of already established and politically favored firms.

Corzine’s political career was launched after his term heading the financial vampire squid known as Goldman Sachs which has its tentacles within [25] practically every important or relevant governing authority around the globe. During his time at GS, he served on a presidential commission for Bill Clinton and a committee in the U.S. Treasury. In short, before his time heading MF Global, Corzine was an expert paper pusher whose connections in the political establishment were deeply rooted. That’s why he made the perfect candidate for a multinational investment firm on the up and up.

Not too long after Corzine went to MF Global, he visited [26] the New York branch of the Federal Reserve in an attempt to expedite the process by which MF could received the coveted “primary dealer” privilege. This primary dealer position gave MF the ability to be one of the first financial institutions the NY Fed would purchase government securities and bonds from when the central bank wished to expand the monetary base. It is the ultimate position any banking insider looking to game the system seeks. Though an official from the NY Fed denies [27] any special treatment was given to Corzine (as if they would own up to it in public anyway), as the Wall Street Journal [28] explains, “the New York Fed doesn’t publicly discuss” decisions of granting primary dealership status, “but a source with knowledge of the process says that it sometimes takes several years for a firm to gain acceptance.”

And yet we are to believe that Corzine’s numerous connections didn’t help fast track this process?

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