12.02.11

Jon Corzine Subpoenaed to Testify Before Congress About MF Global's Collapse

A month after his firm filed for bankruptcy, ex-senator, governor and hedge-fund manager Jon Corzine will have to answer to Congress about MF Global’s demise. Daniel Stone reports.

Exactly a month after resigning as head of the MF Global brokerage firm, former New Jersey governor Jon Corzine was subpoenaed Friday to answer questions in front of Congress about $1.2 billion in customer money that went missing from the company this year.

Rep. Frank Lucas, an Oklahoma Republican who chairs the House Agriculture Committee, called for the vote on compelling Corzine. The entire panel voted unanimously to force Corzine to testify on the record, a rare moment of bipartisanship in the oft-divided House.

"The ranking member and I do not take this action lightly," Lucas said at the hearing. "However, we agree that his testimony is essential to fulfill our objectives on behalf our constituents and to complete the hearing record."

Corzine’s hearing is scheduled for next Thursday and will provide inherent discomfort to the former politician, who was a senator for five years before being elected governor. The grilling is also certain to be intense, as the loss of money fuels the Occupy Wall Street movement and others’ claims of impropriety within large financial institutions.

“His testimony is essential to fulfill our objectives on behalf our constituents and to complete the hearing record.”

The Senate Agriculture Committee will also investigate MF Global’s collapse later this month, as will the House Financial Services Committee.

Sen. Debbie Stabenow, a Michigan Democrat who heads the Senate’s Agriculture Committee, also decried Corzine’s role in the firm’s downfall on Friday, saying that the company had “shattered the faith” of customers.

Both chambers’ agriculture committees have taken up the issue because many of MF’s investors were Midwest farmers who sell futures contracts to lock in prices to protect against market volatility. The effort amounts to betting against themselves so that if crop prices fall, they’ll still make money.

A spokesman for MF Global declined to comment.