Business / Technology

Why is Jon Corzine still at large?

Corzine, the former New Jersey senator and governor, former chief executive of Goldman Sachs, led MF Global, a futures broker and bond dealer that collapsed in 2011. MF Global investors lost as much as $2.1 billion. At the time MF ran into trouble, Corzine was eligible for as much as a $12.1 millon golden parachute. However, Steven Goldberg, a spokesman for Corzine, told me this afternoon that Corzine didn’t take any compensation when he stepped down. He also said Corzine has been unemployed since then, spending time with his family and doing philanthropic work.

Vanity Fair produced an exhaustive look at the collapse last year. Now a report to the bankruptcy trustee by Former FBI director Louis Freeh confirms what anyone paying attention already knew. According to Reuters, Freeh’s 124-page report states, “The risky business strategy engineered and executed by Corzine and other officers and their failure to improve the company’s inadequate systems and procedures so that the company could accommodate that business strategy contributed to the company’s collapse.” As is the habit of the likes of Corzine, he was not using the investments of MF Global to fund productive enterprises and create jobs and innovations, but betting to profit from the misery of others, on European sovereign debt.

The newest hire in the mail room of Boeing’s headquarters could have done as good a job as Jim McNerney last year, as the radical outsourcing he oversaw and encouraged led to the grounding of the 787 Dreamliner. Even so, Boeing’s lapdog board gave McNerney a 20 percent raise, to $27.5 million. At least Jamie Dimon, CEO of JPMorgan Chase had his pay cut in half, to a pauperish $11.5 million for the “London Whale” trading debacle. But a new Senate report shows how Dimon, supposedly America’s smartest and most prudent banker — the guy who bought Washington Mutual for chump change — is presiding over a financial system every bit as dangerous as the one that brought on the Great Recession.

Gretchen Morgenson of the New York Times writes:

Its pages of e-mails, testimony, telephone transcripts and analysis show that traders in the bank’s chief investment office hid money-losing derivatives positions, if only temporarily; that risk limits created by the bank to protect itself were exceeded routinely; that risk models were changed to minimize losses; that bank executives misled investors and the public; and that regulations are only as good as the regulators enforcing them.

Why do Dimon or McNerney still have jobs? Because the cult of the imperial CEO is alive and well, despite the executive malpractice and outright fraud that brought on the 2000 recession (Enron, HealthSouth, Tyco, etc. etc.) as well as the financial crash of 2008. They do whatever they want. Politicians quail before their contribution-bearing lobbyists. Boards are worthless. The message to average Americans who lost jobs, net worth and economic mobility: In your face.

Boeing insists that it has fixed the battery problem that grounded the 787 Dreamliner fleet and “no fire is possible.” Read the story and the comments and tell us what you think:

Read on for the best links of the week and the haiku:

If a kid in a hoodie held up a store for $15, he’d soon be in the custody of Sheriff Sue. A well-connected guy in a business suit “loses” $1.6 billion in other people’s money? He’s still free. “Equal justice under law”? That’s rich.

Last fall, MF Global, headed by former New Jersey Governor and Senator Jon Corzine (and Goldman Sachs alum) collapsed. MF Global was a major broker of derivatives, you know, the weapons of financial mass destruction, and a primary dealer in Treasury securities. Apparently in trouble over bets made over the eurozone crisis, MF Global transferred some $700 million to cover shortfalls in the U.K. This was allegedly customers’ money, not funds from the firm itself — a big no-no even in the deregulated Wild West of Wall Street.

As usual, the case is highly complex and the investigation slow. Today, a House committee is holding the third congressional hearing on the ripoff. According to the Wall Street Journal, Corzine was in “direct contact” with JPMorgan about putting $175 million into a Morgan account to cover an overdraft. Yet assurances were apparently never satisfied that the money didn’t belong to customers.