Wednesday, November 02, 2011

Will Jon Corzine Destroy Barack Obama?

The president campaigned vigorously for Jon Corzine in his failed re-election effort back in 2009.  He then hand-selected Dirty Jon (after a number of "secret meetings") to be his 2012 money-man in the banking industry, his bundler on "The Street", tasked with keeping the financial district dollars flowing to the Democrats, despite the demagoguery.  And the president did nothing to quell rumors that Crooked Jon was the heir apparent to Timothy Geithner's Treasury Secretary position - all assuming, of course, that Jon upheld his share of the deal and kept that fat Wall Street cash flowing to the Obama 2012 campaign.  Rumors which, coincidentally, MF Global used to lure investors to their portfolio less than a year ago.

Doesn't speak well for the president's judgement, of course, although the jury has long since returned their judgement on that matter.  But can Barack Obama politically afford to let Jon Corzine walk away from the MF Global disaster with over $12 million dollars, while investigators are searching for almost $700 million dollars in "missing" investor money?  The potential crime:

MF Global, headed by former New Jersey Senator and Goldman Sachs CEO Jon Corzine, filed for bankruptcy yesterday, but reports that $700 million is missing has spooked creditors and others on Wall Street... Best case scenario, the "missing money" is just sloppy "internal controls," but worst case scenario, the financially unstable MF Global diverted customer funds to back its own trades..."Customers' funds must be kept separate from company money," they write. "One of the basic duties of any brokerage firm is to keep track of customer accounts on a daily basis." ...the firm has been suspended from trading on the London Mercantile Exchange and futures market CME Group, reports the San Francisco Chronicle.

And the reward:

Former New Jersey Gov. Jon Corzine is out of a job now that the Wall Street firm he headed, MF Global, has gone bankrupt, but don’t worry. He’ll be just fine.

Corzine has a couple of things to keep him out of the unemployment line. First, he’s a “great friend” and “ally” of President Barack Obama, as the president himself has said.

And second, he’s expected to receive a $12.1 million severance package — the kind of things that critics of Wall Street excess, like Obama, often call “golden parachutes.

And here's where the problems begin for the president:

In a 2008 campaign ad, Obama attacked then-GOP presidential candidate John McCain for his ties to campaign adviser and former Hewlett Packard CEO Carly Fiorina, who was paid a little more than $20 million in severance.

“You’ve got corporate executives who are giving themselves million dollar golden parachutes and leaving workers high and dry,” Obama said in the 2008 ad. “That’s wrong. It’s an outrage.”

How outraged? Outraged enough to make sure Dirty Jon gets his comeuppance? Johnathan Tobin at Commentary, in a piece entilted Corzine: Poster Child for Liberal Hypocrisy, thinks Obama may not have much choice:

Corzine is not just another high-flying investment ace that was shot down by bad bets — in this case by his firm’s decision to put customers’ money in European sovereign debt. Such figures are generally associated with the fat cats whom popular culture tells us are all Republicans who finance conservative causes. Corzine was, after all, not just a Democrat but one of the party’s bright hopes just a few years ago and a leading liberal advocate for bigger government as well as, in a touch dripping with irony, for reining excessive compensation for Wall Street executives. More than just a stereotypical “limousine liberal,” Corzine was a major figure in mobilizing financial support for the Democratic Party, a role that he continued to play even after losing his try for re-election in 2009 to Chris Christie. The White House will try to distance itself from Corzine, but the disgrace of one of his leading bundlers will make it a little harder for Obama to spend the next year wandering the countryside complaining about Republican responsibility for Wall Street greed and income inequality.

Will Obama stick by Corzine, in the hopes of squeezing him for a little more cash? Or will he realize the payoff margin is too thin, and toss him under the bus?

The media cannot quell this one, it is a Page 1 story in the business section and the involvement of Corzine will insure it stays there for a while, Herman Cain notwithstanding. The Republicans will tie Corzine and Obama together mercilessly, and Obama will have to explain how his populist rhetoric squares with his business relationship with Jon Corzine, who destroyed a century-old firm, possibly mishandled (intentionally) close to three-quarters of a trillion dollars in customer's money, and still walked away with over $12 million in his pocket.

Obama shouldn't have hitched his wagon to a dirty Jersey penny. Now he's gonna pay, big-time...possibly, even, with his job...

Don't feel too bad, Barack. Just imagine what the press would be saying if you were a Republican...

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