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Taibbi writes: "Much like the Trayvon Martin/George Zimmerman case, the outrage here goes beyond the fact of the horrific crime. An equally profound insult in both cases lay in the fact that that serious crime obviously had been committed, and yet authorities refused to act for months."

Matt Taibbi at Skylight Studio in New York, 10/27/10. (photo: Neilson Barnard/Getty Images)
Matt Taibbi at Skylight Studio in New York, 10/27/10. (photo: Neilson Barnard/Getty Images)



Jon Corzine Is the Original George Zimmerman

By Matt Taibbi, Rolling Stone

25 April 12

 

o the Senate Banking Committee is beginning hearings today on the MF Global scandal, hearings entitled, "The Collapse of MF Global: Lessons Learned and Policy Implications." Apparently the government has already moved to the reflective, introspective, South Park-ian, "You know, I learned something today!" stage in its examination of the scandal, despite the fact that the government's official "response" hasn't even started yet, i.e. authorities have yet to arrest a single person in this brazen billion-dollar theft story.

To make an obvious comparison: Much like the Trayvon Martin/George Zimmerman case, the outrage here goes beyond the fact of the horrific crime. An equally profound insult in both cases lay in the fact that that serious crime obviously had been committed, and yet authorities refused to act for months. This situation with former Goldman chief and U.S. Senator Jon Corzine and the officials of MF Global involves a less physically savage offense, but the authorities' refusal to act is every bit as incredible.

Nobody disputes the fact that MF Global officials dipped into customer accounts and took over $1.6 billion of customer money. We not only know that company officials reached into customer accounts, we know they brazenly lied to bondholders, ratings agencies and investors about the firm's financial condition ("MF Global's capital and liquidity has never been stronger," wrote the CFO of MF Global's holding company, on the same day Moody's downgraded it to junk status).

We even know that eighteen days before the firm went bust, company officers discussed how quickly to return money to customers, and even contemplated, in writing, the possibility of not returning the money right away. This is from a risk-assessment document prepared by company officers entitled "Break the Glass":

…Who do we want to be after the storm? How quickly do we want to send cash back to clients, what is the message if we do not send immediately, what is the strategy if we want to keep the customer and wait until the storm passes?

In the wake of the 2008 crash it's often been said that one of the major problems in getting the public to grasp the crimes committed by banks and financial companies is the extreme complexity of the transactions used. The mortgage-backed-securities scam by itself was really just a common fraud scheme, but it was cloaked in the extremely complex verbiage and advanced math of derivatives transactions, which made it possible for bankers to bluff their way through an argument that no crimes had been committed.

But MF Global is different. This is not complicated at all. This is just stealing. You owe money, you don't have the cash to cover it, and so you take money belonging to someone else to cover your debts. There's no room at all here for an argument that this money was just lost due to a bad investment, an erroneous calculation based on someone's poor understanding of a complex transaction, etc. It's straight-up embezzlement.

Nonetheless, there's been an intense effort at trying to convince the public that no crime has been committed. Whoever is handling MF Global's P.R. (according to Pam Martens in this excellent piece, it's APCO worldwide, a former Big Tobacco spin factory) appears to have convinced the company's officers to emphasize the word “chaos” in describing the last days of the firm - as though $1.2 billion wasn't intentionally stolen, per se, but simply lost in a kind of uncontrolled whirlwind of transactions that magically carried the money out of accounts off to worlds unknown.

I call this the “Wizard of Oz” defense: a Big Twister hit the firm's customer accounts, chaos ensued, and when the dust settled, no one knew where the heck little Dorothy and her money had gone.

You started to hear this more and more as the winter progressed. Reuters shamefully ran a piece earlier this year quoting an unnamed source who insisted, hands over his anonymous heart, that there just wasn't any crime in the MF Global story:

A source familiar with the work of Louis Freeh, trustee for the MF Global holding company that filed for Chapter 11 bankruptcy protection, says investigators have yet to find evidence of fraud in the multi-faceted and complex investigation.

The source, who declined to be identified because Freeh's office is still conducting its inquiry, says there was plenty of "chaos" at MF Global in its waning days, but "no evidence of fraud."

Corzine himself reached for the Wizard of Oz defense in his infamous "How the hell should I know?" testimony before the Senate Ag committee last year, throwing up his hands and pleading helplessness before the "extraordinary number of transactions" in the last days of MF Global - although he was perfectly willing to consider the possibility that the losses were someone else's fault:

I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules. Moreover, there were an extraordinary number of transactions during MF Global's last few days, and I do not know, for example, whether there were operational errors at MF Global or elsewhere, or whether banks and counterparties have held onto funds that should rightfully have been returned to MF Global.

Almost every story written about MF Global by any financial news outlet will contain the word "chaos," and describe the bookkeeping challenges of the firm's last days as just too overwhelming for mere human beings to handle. The sources are almost always unnamed, but they all say the same thing - it was just too much math, too much! The Times's Dealbook page offered one of the most humorous examples:

A flurry of transactions engulfed the firm in the week before it filed for bankruptcy, as $105 billion of cash shuttled in and out. Amid the chaos, the employees became overwhelmed.

"It's like being at the bottom of Niagara Falls," recalled one employee in a meeting with federal authorities, according to one of the people involved in the case.

It's incredible that people are offering as a defense the idea that a financial company could be so overwhelmed by transactions that it could just lose track of $1.6 billion. If you're so terrible at managing money that you can honestly lose a billion dollars - especially after swearing up and down to the whole world that you were the right choice to manage the cherished millions and billions of scads of farmers, ranchers, and other investors - you should go to jail just for that, just on general principle.

But most pundits aren't saying that. Instead, it seems like like every financial reporter both in this city and in Washington is talking to the same five or six defense lawyers, buying their weak arguments, and offering the same lame excuses for the missing money, which should tell you a lot about how the Wall Street press corps managed to miss the warning signs for 2008 and other disasters.

Somebody from MF Global has to be arrested soon. The message otherwise to middle America is so galling that it boggles the mind.

It would be one thing if this was a country with a general, across-the-board tendency toward leniency for property crime. But we send tens of thousands of people to do real jail time in this country for non-violent offenses like theft. We routinely separate mothers from their children for relatively petty crimes like welfare fraud. For almost anyone who isn't Jon Corzine, it's no joke to get caught stealing in America.

But these people stole over a billion dollars, right out in the open, and nobody is doing anything about it. Instead, we get a lot of chin-scratching legislative hearings, and an almost academic-style public discussion about whether or not a crime even took place. If there aren't arrests in this case soon, ordinary people will correctly deduce that it simply isn't a crime to steal in America, if the thefts are executed with a computer by white people in suits.

Just as it was incredible when Florida authorities dragged their feet in the Zimmerman case, it's incredible that people in Washington don't see the implications of this continual non-decision on MF Global. Apparently they hope no one notices. The sad thing is, they might be right.

 

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+31 # DPM 2012-04-25 11:26
OCCUPY!!!
 
 
+58 # cypress72 2012-04-25 12:02
As a former Manager of a retail brokerage office, this is beyond belief. However, considering all that's happened since the 2008 meltdown, I shouldn't be surprised. Roger Clemens may get 30 years for lying to Congress. Why isn't Corzine in chains????? Just another Wall Street-dirtbag- member of the 1%.
 
 
+64 # noitall 2012-04-25 12:21
But they are the RICH! so is there really any money involved?...Rea lly? That's where people's eyes begin to roll and we call a time out for lunch. But let's nail Martha Stewart's ass to the wall. Let's nail a female soldier's ass to the wall for all the Guantanamo torture, Let's nail an engineer's ass to the wall for the GP oil crime, and how about that Leonard Peltier? Ass nailings, we roll our eyes, turn the page and have another helping of lasagna, All the while, getting exactly the govt. and WHAT we deserve. Too bad about the Awa genocide in Brazil...I just love your new wooden lawn furniture. What does this have to do with that???...Exact ly!
 
 
+34 # cordleycoit 2012-04-25 12:23
Nothing will happen until the politicians see and smell the public outside their door baying for blood with their farm implements, they the politicians want so badly to disarm the public at the behest of the owners of all politicians, the guilty bankers. People armed with pitch forks easily fall victim to the "Whiff of Grape." Something more to remember.
 
 
+30 # Eliza D 2012-04-25 15:50
Cordley-you are so right. We must wake up now and demand that Corzine, who committed a crime with depraved indifference to the lives he may be ruining, should be jailed NOW! It seems that all those who CAN, ARE stealing whatever they can. While we're at it, our government has all the evidence it needs to sue BP and Halliburton for their destructive incompetence. Al Jazeera, of all people, have discovered that the Horizon well is STILL leaking. Why don't they sue the monsters???
 
 
+3 # Montague 2012-04-27 01:02
I only just noticed something in your comment, and forgive me if I have it wrong: you say the politicos want to "disarm" the public, cos those who only have pitchforks easily fall victim to the "whiff of grape". Judging by the positive votes itd seem nobody else interpreted this as I did, as an anti-gun control statement. Maybe some readers don't know that "grape" or "grapeshot" is old style ammo? Fine if you're speaking in metaphor, but if you're actually really saying we need armed revolt now then I'm shocked that so many here gave a thumbs up - isn't this the opposite of what RSN stands for? Again, sorry if I've misread your views.
 
 
+26 # Montague 2012-04-25 12:51
One of the phrases I hear in the UK a lot from officials in all walks of life also occurs here, and it makes me cringe when it's used because of the glaring insincerity and the fact it has obviously been dictated by some PR flack: "Lessons will be learned...if there are lessons to be learned, rest assured we will learn them...lessons have been learned, etc". It's become a meaningless lie, cos the same crimes happen over again, and again. Let there be a moratorium on this crud - a LESSON LEARNED, if you will.
 
 
-22 # dick 2012-04-25 12:54
Obama is the architect of the "Many Premeditated Murders Occurred, But No Laws Were Broken" defense. Reminds me of the Moon Pie defense: "Sure I executed the guy, but I had a sugary lunch."(San Francisco) If W & John Ashcroft were shielding, protecting, defending, enabling, empowering, taking heat for the Banksters, the left would be going NUTS. Instead we hear, "Vote Straight Democratic." Obama-Biden-Cli nton-Holder are the ones DOING IT TO US. Painful, but true. They are Quislings to Big$$.
 
 
-45 # Robt Eagle 2012-04-25 12:54
Corsine is a Democrat and an Obama crony...why would you expect him to have to pay any price for his theft, inept running of the company, and the fraud committed in trying to cover it up. When Emperor Obama gets re-elected, Corsine will be granted a seat at the table, probably being knighted and having the title of Earl, or something under Obama.
 
 
+11 # Billy Bob 2012-04-25 17:11
This article compares Corzine to Zimmerman. Your logic about Zimmerman is that we should keep our opinions of him to ourselves because he hasn't been convicted of anything.

I smell hypocricy on your part.
 
 
0 # Bodiotoo 2012-04-30 18:10
Even if he is a crony, Congress can act.
 
 
-43 # Robt Eagle 2012-04-25 12:57
Wait, better yet, Emperor Obama will grant Corsine the ambasadorship to Russia and then Corsine and Vladamir Putin can rob us blind (onece Obama gets re-elected).
 
 
0 # Bodiotoo 2012-04-30 18:02
Robt, instead of always taking a shot at Obama, lets hear what you do when we make you emperor...this Corsine should be doing hard labor until the money gets accounted for.

Maybe he uses one of Romney's CPAs...the guys that can't get his taxes together until October.
 
 
+32 # larrypayne 2012-04-25 13:11
"Somebody from MF Global has to be arrested soon. The message otherwise to middle America is so galling that it boggles the mind."

Middle America has already received the message many times in the last decade.

No was was arrested, fired or even reprimanded for all the government failures on 9/11. Many of those responsible were even promoted.

No one in the Pentagon was arrested, fired or reprimanded for allowing $2.3 TRILLION to go missing from Pentagon accounting just before 9/11.

No one has been arrested in the 2008 meltdown caused by mortgage derivatives fraud.

With the present majority of criminals occupying Congress and the White House,
crime has become legal for the elite class.
 
 
+23 # amye 2012-04-25 13:26
Anyone who has any money in any of these "too big to fail banks or other investment firms like MF Global, then they should have had their money pulled out 4+ years ago! Or at the very least pull it out now! I know there are some retirement investments that you really have no control over and thats a real shame too cause they know they can steal that money too! They have already for too many Americans!! And as long as NOONE goes to jail for it, it will continue until it is stopped by law enforcement!
 
 
+32 # lorenbliss 2012-04-25 13:30
Only fact missing from Mr.Taibbi's otherwise excellent report is that Corzine is a Democrat -- not just a run-of-the-mill Demo but an especially powerful, Pelozi-class so-called "liberal," a former U.S. senator and former governor.

Too bad the election-year politics of Obama-or-else despair prompt even reporters as normally principled as Mr. Taibbi to back away from the bottom-line truth of today's United States: that -- just as the behavior of Corzine demonstrates so vividly -- we're ruled by a single, bottomlessly corrupt One Percent party, with Corzine merely the DemocRats' version of the GOPorkers' Tom DeLay. Thus the real-time policies of Barack Obama are scarcely distinguishable from those of George Bush.

That said, Mr. Taibbi surely gets it right in his concluding paragraphs: "We send tens of thousands of people to do real jail time in this country for non-violent offenses like theft. We routinely separate mothers from their children for relatively petty crimes like welfare fraud...If there aren't arrests in this case soon, ordinary people will correctly deduce that it simply isn't a crime to steal in America, if the thefts are executed with a computer by white people in suits."

Such is true capitalism and true capitalist governance: absolute power and unlimited profit for the One Percent, total subjugation and murderous poverty for all the rest of us.
 
 
+17 # Butters 2012-04-25 13:34
In the vernacular of the peasantry, this sh..storm is a whopper! We need another video with this story - the scene from "Frankenstein", where the villagers (or peasantry, if you will) come with pitchforks and torches. But it should be a re-enactment done at Corsine's office.
 
 
+8 # MidwestTom 2012-04-25 13:50
Why is tapping on the green response increasing the red count, not once but three times.


*** RSN MODERATOR'S NOTE ***

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To see an accurate reflection of your vote, simply refresh the page and then vote immediately.
 
 
+16 # MidwestTom 2012-04-25 13:51
One of my favorite sayings is "How much justice can you afford?"
 
 
+13 # danielvenzon 2012-04-25 14:15
#Dick says "If W & John Ashcroft were shielding, protecting, defending, enabling, empowering,"

I think Cheney, Bush and Ashcroft were hoping their schemes to support the rich with tax breaks, eroding oversight and regulation et al would have had their disastrous affects after a few years of Obama so they could blame it totally on the incoming president. Let's stop saying Obama is President now so don't mention Bush.

At the same time, Obama policies haven't changed much from Bush policies and nominating Larry Summers as top economic advisor was a play to the corps and Goldman Sachs. Now Summers is predicting financial armageddon...Re ally? no duh.

I don't see Romney helping the people out, and the media has affectively eliminated Ron Paul from the nomination which is who I would have voted for.
 
 
+7 # MidwestTom 2012-04-25 16:35
Ron Paul received no traction because he openly said that he would attack the rich starting with the privately owned Federal reserve.
 
 
+19 # Billy Bob 2012-04-25 18:49
He also said women didn't have the right to choose. He also affiliated himself with racists. There were actually a BUNCH of reasons.
 
 
+8 # SundownLF 2012-04-26 08:13
AND he is determined to dismantle both Social Security and Medicare.

At least he stands firm behind his lousy values!
 
 
+22 # mjc 2012-04-25 14:18
Have to agree with not only the blog but also many of the comments. There is no question that our problems of corruption, of outright stealing, of lieing, of government agencies merely burying or completely turning around the actions of the wealthy and powerful is not just a Republican problem but a Democratic problem as well.
 
 
+14 # dick 2012-04-25 16:01
Lefties may not like to be reminded, but Slick Willie repealed Glass-Steagall & facilitated the Crash. Yes, Reagan, Greenspan, & W are worse, but inequality is increasing faster under Obama-Summers-G eithner. And where are the indictments? Send $$ to Mass, Wisc, ILL, Neb, Montana, RSN, but NOT to Obama-AIG.
 
 
+15 # ckosuda 2012-04-25 19:46
doesn't exactly do much in instill respect for 'law and order ' in the young, eh?

maybe the crackdowns on peaceful protest will escalate - as the brazen criminality of those in power is revealed -

the scope of this crime is astounding - even in the age of the "1% revealed' -

please put him in jail.
 
 
+4 # Logic 2012-04-25 20:00
Maybe the whole thing was orchestrated to help the big banks incinerate some toxic investments.

We know that MF accepted dubious bonds from the TBTF banks shortly before its collapse. Such collusion would partially account for Corzine skating
 
 
+9 # Anarchist 23 2012-04-25 22:16
In 'Sybille' Disraeli wrote that there was an ongoing war in the world between two nations-the Rich and the Poor. Certainly no one can claim 'American Exceptionalism' now from this war. The 1% can pillage all they want without consequences. The labels 'Republican' or 'Democrat' are useless for identifying the combatants, let alone crafting a counter strategy.
 
 
+7 # wullen 2012-04-26 03:50
Matt..... why have you not been on Rachel Maddow or Ed Shultz or Dylan R. yet to bring all this more to mainstream media forefront? No one seems to be talking about all this at all!
Can yopu request an interview with them?
 
 
+5 # Montague 2012-04-26 08:31
I sense some hypocrisy and kneejerkery in the votes here. Robt Eagle is well known to be right-wing, so his comments get numerous thumbs-downs. Yet lorenbliss, a more progressive member, makes virtually the same, perfectly valid point as Eagle, that Corzine is democratic in-crowd, and gets multi thumbs-ups! We ought to vote on the opinion expressed, not based on whether we have a history of not liking the poster. Come on, folks! I'm no Eagle cheerleader, but let's be fair.
 
 
+1 # Billy Bob 2012-04-26 18:21
She didn't make the same point. It was similar on the surface, but the devil is in the details.
 
 
+3 # Montague 2012-04-26 21:45
Maybe so - but the difference is so small that it hardly explains the massive disparity in reaction from users of RSN. That's MY point, Billy Bob, and I honestly think it's a fair one. Someone suggested to me that Eagle and other rightist posters may be deliberate "plants" by the right given the job of sowing dissension on sites like RSN, but until that's proved we ought to treat their views as honestly-held ones. Of course, maybe I'm a secret agent too!
 
 
+3 # Montague 2012-04-26 21:47
PS: And I did say it was "virtually" the same, not word for word.
 
 
0 # Bodiotoo 2012-04-30 17:59
Are they saying there are no "paper trails"...it is accounting!?

Balnce sheets should balance. Losses get explained.
 
 
0 # Bodiotoo 2012-04-30 18:05
I could live with a Ron Paul presidency, so long as the Congress was fully controlled by Progressives...

Let Paul wind the military down, but block him from harming programs at home.
 

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