You know, it’s about the $1 billion + (exact amount still unknown) that Corzine stole from client funds at MF Global. The scandal that Republicans prefer to ignore…
1. The Agriculture Committee in the House has called Corzine to testify. Meanwhile any committees with anything to do with finance are doing nothing.
2. The CFTC yesterday finally passed rules regarding brokerage company use of funds, two years after Dodd-Frank passed. Why the delays? Well, we learned yesterday that Bill Clinton was a lobbyist for MF Global.
3. We also learned a bit more about Gary Gensler, the head of the CFTC who delayed dealing with the matter of misuse of client funds:
Gensler served as senior economic adviser to the Hillary Clinton in the 2008 campaign. When her campaign closed shop, he jumped into the Obama camp as a fundraiser and adviser. Once elected, the Obama transition team then charged him with charge of the reviewing the SEC.
Prior to this Gensler was active in Democratic party politics, appointed treasurer of the Maryland Democratic Party in 2003. He emerged as a major donor contributing more than $220,000 to Democratic party candidates and committees from 2002. This figure includes the more than $72,000 in 2008 shortly before his appointment.
So to summarize, if you steal $100 from a 7-11 you get locked up right away. Steal $1 billion from your customers at a brokerage firm (and hire the right help) and nothing at all happens. Will Republicans make an issue of this?
Meanwhile, the far bigger crime waiting to happen is that the Federal Reserve allowed Bank of America to transfer more than $70 trillion of derivatives contracts over to its banking subsidiary. This means that BOA is subordinating $4 trillion of taxpayer-guaranteed deposits to its casino gambling. That’s because in the event of bankruptcy under US law, derivatives holders go to the front of the line, they are senior to all other creditors (this in itself is ridiculous). So if BOA goes under, American taxpayers could effectively guarantee up to $4 trillion of derivatives losses. This isn’t news, it happened a couple of months ago. What IS news is that no Republicans seem to be upset. Democrats want answers.