March 24, 2012

Bloomberg: Dem Corzine Ordered $200 Million Transfer of Customer Funds; AP, UPI, Others Fail to Name His Party; All Avoid Obama Bundling

CorzineDec2011An item filed at the Hill on Friday afternoon by Peter Schroeder tells us that Bloomberg News was the first organization to report the latest development relating to former New Jersey Democratic Governor and Senator Jon Corzine. Bloomberg’s report, via Phil Mattingly and Silla Brush, reveals that Corzine, who was CEO at the now-bankrupt MF Global Holdings until November, “gave ‘direct instructions’ to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co. (JPM), according to a memo written by congressional investigators.” That would be an MF brokerage account, meaning that customer money was used to cover company losses. If the memo reflects what really happened, Corzine committed a crime — either by committing perjury in his congressional testimony several months, in ordering the transfer itself, or both.

Bloomberg’s report identifies Corzine as a Democrat in its fourteenth paragraph. But at least Bloomberg did so. That did not occur in reports at the Associated PressUnited Press International, MarketWatch.comCNBC. The Hill’s Schroeder did tag Corzine as a Dem. Here are several paragraphs from Bloomberg’s report (bolds are mine):

Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co. (JPM), according to a memo written by congressional investigators.

Edith O’Brien, a treasurer for the firm, said in an e-mail quoted in the memo that the transfer was “Per JC’s direct instructions,” according to a copy of the memo obtained by Bloomberg News. The e-mail, dated Oct. 28, was sent three days before the company collapsed, the memo says. The memo does not indicate whether that phrase was the full text of the e-mail or an excerpt.

O’Brien’s internal e-mail was sent as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse.

… Vinay Mahajan, global treasurer of MF Global Holdings, wrote an e-mail on Oct. 28 that said JPMorgan was “holding up vital business in the U.S. as a result” of the overdrawn account, which had to be “fully funded ASAP,” according to the memo.

Barry Zubrow, JPMorgan’s chief risk officer, called Corzine to seek assurances that the funds belonged to MF Global and not customers. JPMorgan drafted a letter to be signed by O’Brien to ensure that MF Global was complying with rules requiring customers’ collateral to be segregated. The letter was not returned to JPMorgan, the memo said.

The money transferred came from a segregated customer account, according to congressional investigators.

Corzine, 65, in testimony in front of the House panel in December, said he did not order any improper transfer of customer funds.

It’s quite likely that those who did note Corzine’s party affiliation relied on either Bloomberg’s original or Schroeder’s short item at the Hill for their initial facts, and that they therefore consciously chose to remove his party affiliation from their items.

And of course, there’s no mention anywhere of Corzine’s involvement as a major bundler for Barack Obama’s 2012 reelection campaign.

No one could possibly care about the fact that a guy who represents the evil rich 1% and who appears to have an indictment in his future has raised major bucks Barack Obama. (/sarc)

Cross-posted at NewsBusters.org.

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