The United States Senate Committee on Agriculture, Nutrition and Forestry has issued a subpoena to the former CEO of MF Global, a major international commodities brokerage firm that collapsed after taking bad risks on European debt.
You might be wondering what this has to do with Kansas.
Well, the answer is a lot.
Customers of MF Global were Kansans: farmers, ranchers, grain elevators, co-ops, small businesses, investors and others.
When MF Global went into bankruptcy, the trustee froze billions in funds until the mess could be sorted out. Almost $1.2 billion is thought to be missing. At this point, regulators do not know what happened to the funds.
For the Kansans who are out hundreds of thousands of dollars while the books are sorted out, this means their operations are suspended. Seed purchases, planning decisions, land acquisitions, equipment purchases – everything is put on hold for the innocent victims of MF Global and, in this economy, that is not good for the rest of us.
The CEO is not your run-of-the-mill corporate suit, but is none other than former U.S. Senator and New Jersey Governor, Jon Corzine. And, according to the Senate Historian, this may well be the first time a former U.S. Senator has been subpoenaed before a U.S. Senate committee.
The extraordinary and rapid bankruptcy of MF Global is not just another Wall Street firm that went belly up. It represents the eighth largest bankruptcy in U.S. history and the damage extends directly to Main Street and Rural Route 1.
I have the privilege serving as the Ranking Member, or most senior Republican, on the Senate Committee on Agriculture and I have been demanding answers from the start.
My first priority was to work with the bankruptcy trustee to get the money back to its rightful owners. We are leaning hard on the trustee to do what he can to free up those funds so Kansans and others across the country can get on with their operations.
I was also the first to call for Corzine’s testimony.
Several days after news broke of the MF Global bankruptcy, Commodities Futures Trading Commission (CFTC) Chairman Gary Gensler called me to let me know he was recusing himself from CFTC oversight of the matter because he has a relationship with Corzine since they worked together at Goldman-Sachs, a major Wall Street investment firm. Yes, there seems to be a pattern here.
Unfortunately, the scope and timing of Gensler’s actions in the early days of the bankruptcy have created exactly the kind of distraction he said he was hoping to avoid. I am taking a hard look at his actions on behalf of Jon Corzine and MF Global.
We need answers from Chairman Gensler. We need to know that his past relationship with Mr. Corzine did not cause the CFTC to be asleep at the ship while MF Global was losing billions of dollars.
But we need answers from the guy at the top of MF Global as well; Corzine has a lot of explaining to do.
Former New Jersey Senator has explaining to do