Has the New York Times Business section gone soft on former New Jersey Democratic Gov. Jon Corzine, now under the scandal spotlight for his service as chief executive of the failed financial services firm MF Global?
Saturday's Business Day story by Azam Ahmed and Ben Protess buried intriguing details that reflect suspiciously on Corzine under the bland headline, "Congressional Memo Sheds New Light on MF Global." The paper didn't even identify the scandal-plagued former governor as a Democrat.
New details have emerged about MF Global’s chaotic final days and a critical transfer of customer money that has become a central focus in the wide-ranging federal investigation into the firm’s collapse.
In a memo prepared for a coming Congressional hearing, investigators described how Jon S. Corzine, the firm’s former chief executive and former New Jersey governor, asked an executive in the Chicago office to transfer $200 million to replenish an overdrawn account at JPMorgan Chase in London.
The Congressional memo cites an e-mail from the Chicago employee, Edith O’Brien, who authorized the transfer, saying it was “Per JC’s direct instructions,” referring to Mr. Corzine.
At first, the revelation fueled speculation that Mr. Corzine had instructed the transfer of customer funds, despite his assertions to the contrary. But it appears to be no smoking gun.
While the memo makes clear that Mr. Corzine was involved in patching the overdraft, it does not indicate that he requested the funds be drawn from customer accounts. He asked only that the overdraft be fixed. And in a footnote, the memo noted that futures brokerage firms like MF Global frequently deposit firm money into customer accounts and may withdraw it at will.
Some of the commenters on the online version don't buy the Times defense of Corzine. "Bill W" wrote, emphasis added:
This is a very naive take indeed on how these things work. Of course noone will find an email from Corzine saying "please misuse customer funds." He doesn't have to do that to get this done. If he tells a subordinate to fix an overdraft at all costs and there is only one source of funds then it amounts to the same thing. He certainly won't have issued such an instruction over the recorded phone lines or via email either. None of the other mainstream financial sites seem quite as inclined to give Corzine the benefit of the doubt on that email.
Indeed, the Washington Post found Corzine's involvement fishy: "House panel memo ties Corzine to missing MF Global funds."