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Tuesday, August 21, 2012

MF'ing Justice

MF'ing Justice

By Jim Karger
The Dollar Vigilante
August 21, 2012

Jon Corzine is a contemporary Richard Nixon: a low rent thief,
liar, and American success story.

Corzine, you may recall, bet $6.3 billion on the wrong side of
European sovereign debt, a wager his own risk department at
MF Global told him was nuts, and a wager so big and so wrong
that it wiped out the entire firm.

After the news hit the wire and blood hit the water MF's
customers started jumping ship and that is when MF
deliberately took customer money as its own to keep its
head above water.

It was too little, too late. The company filed for bankruptcy
protection and Corzine resigned.

Over $1 billion in customer funds remain missing in action.

Depending on who you listen to, Corzine may have known
the funds he ordered transferred were customer money.

He certainly should have known and there is little dispute
he has a serious gambling problem and that he destroyed
the savings and lives of hundreds of investors and businesses.

Now, after 10 months of a pretend investigation, one that has not
involved so much as an interview by the FBI of Corzine himself,
federal prosecutors have decided they are not going to charge him
with anything.

Nothing. Nada. Vaya con dios, amigo.

Such is the nature of justice in America's fast lane.

Plausible Deniability Retested

Taking a cue from Nixon's "plausible deniability" gambit, Corzine
has reminded us of a few important political truths that every
American should remember as they struggle to find a safe place
for themselves and whatever money they have left:

1. Former CEOs of Goldman Sachs, like Goldman Sachs itself, are
too big and too connected to fail, no matter how egregious their

And, to make sure we all know that, in addition to giving Corzine
a pass, the government also announced last week that they are
ending an investigation into whether Goldman Sachs misled
investors in a $1.3 billion sale of residential mortgage-backed
securities in 2006, shortly before the housing crash.

You may recall that Goldman was packaging this rancid financial
trash so that one client (John Paulson) could short them, while
simultaneously selling the other side of the deal to their own
clients, conveniently failing to disclose that these instruments
were specifically designed to fail.

2. Former US Senators won't be prosecuted for anything, ever,
even if caught with underage boys on videotape.

They know where too many bodies are hidden, as evidenced by the
softballs a fourth grader could have handled when Corzine testified
in Congressional hearings on what happened to the money.

3. Big-dollar supporters of any sitting President and his party are
too important to lose to jail.

Corzine was one of Obama's biggest campaign "bundlers", a way
for the rich to gain direct access to a candidate by leaning on
people inside their organizations to contribute far more than
ostensibly they would have without implicit threats to do so.

Proven Techniques of Truth Suppression

Not wanting to bet the farm solely on his political connections,
but needing to make sure the fix was in, Corzine used several
of the time-tested "Thirteen Techniques of Truth Suppression",
favorites of politicians and their owners who don't want to go
to jail, which I estimate to be all of them.

In Corzine's case, he selected from the liar's list as if were a
menu of fine wines, first using technique number nine:

“Come half-clean. This is also known as 'confession and avoidance'
or 'taking the limited hang-out route.'

This way, you create the impression of candor and honesty while
you admit only to relatively harmless, less-than-criminal "mistakes.'
This stratagem often requires the embrace of a fall-back position
quite different from the one originally taken."

Corzine played this gambit well, even professionally, first
suggesting that he knew nothing, a proposition so absurd
that it fell apart like a cheap suit, then subtly implying
that he actually was a moron, a gambler with a problem,
too stupid to be held liable for anything, though not in
those exact words.

His prepared testimony was, in a word, disturbing:

"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."

Yes, Corzine swore to all that with a straight face.

To make sure no stonewall was left unturned, Corzine borrowed
from the crook's playbook once more, this time technique number

“Characterize the crimes as impossibly complex and the truth
as ultimately unknowable."

This worked well when the big banks got behind Henry Paulson,
another former Goldman Sachs CEO during the housing meltdown,
as he explained not-so-patiently that we, the general public, were
far too ignorant to ever understand what went wrong and so we
should stop trying.

Matt Taibbi observed in his brilliant article in Rolling Stone:

"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.
. . . 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."

No one with good sense professes to believe Corzine except
those who matter, Congress, and federal prosecutors.

Finally, Corzine called on technique number twelve, “Require
the skeptics to solve the crime completely," which was easy
in this case since he was never interviewed by federal law
enforcement, making their inability to prosecute true, albeit

The fact that MF Global was a client of Attorney General
Eric Holder's, and Assistant Attorney General Lanny Breuer’s,
former law firm Covington & Burling, didn't hurt Corzine's
chances either, and the all clear signal was given when Holder
(an accomplished criminal in his own right) refused to appoint
a Special Prosecutor.

Like Nixon, Corzine is a one man epidemic of deceit, a thug with
the conscience of a rabid hyena, and like Nixon, he is not going
to jail.


Not only is Corzine avoiding prosecution, but under the heading
of "in your face, MF'er," he is going into business again.

Doing what you ask? Handling the money of others, of course.
Max Keiser summarized the situation best:

"Corzine is considering opening a new hedge fund, though the
notion that anyone — even a slack-jawed muppet happy to buy
whatever Goldman‘s prop traders want to sell — would seed
Corzine money so he can trade or steal it away seems absurd —
rather like putting a child molester in charge of a day-care."

Absurd, yes, but true nonetheless and odds are he will raise
millions, and if not become a high-priced political or financial

The Big Ugly Picture

Corzine is just another poster child for fraud and malfeasance at
the highest levels, public and private. His photo is not alone on
that wall of shame.

In the big picture, he is small potatoes. Other bigger players are
being given passes for far more egregious crimes.

JP Morgan, infamous manipulator of silver, stepped closer to the
edge by losing $6 billion in a single trading loss.

It's megalomaniacal CEO, Jamie Dimon, no stranger to truth
suppression, expertly employed technique number four:

“Knock down straw men. Deal only with the weakest aspect of
the weakest charges.

Even better, create your own straw men. Make up wild rumors and
give them lead play when you appear to debunk all the charges,
real and fanciful alike."

Dimon took full responsibility (for a nanosecond) before blaming
it all on a straw man, a rogue trader who turned out to have all
the authority he exercised.

No one is going to jail.

To the contrary, almost as a gift, the US Commodity Futures
Trading Commission (CFTC) dropped a four-year investigation
(mainly held behind closed doors) into JP Morgan's obvious and
rampant silver price manipulation just to show there were no
hard feelings.

Still another shining example of "justice", as that term is
now defined by the owners, is Barclay's Bank, believed to
be a mastermind in the virtually incalculable LIBOR fraud.

Its execs have skated criminal prosecution and the bank has
paid a relatively meager $350 million fine for everyone to
forget it ever happened, except its former CEO, Bob Diamond,
who used technique number two:

“Wax indignant. This is also known as the ‘how dare you?’
gambit..." after British Parliament observed the obvious—
that he is an unmitigated filthy liar like all the rest.

And, then there is Standard Chartered who will pay
a $340 million to settle charges that it illegally
funneled hundreds of billions of dollars to Iran in
violation of innumerable US and international sanctions.

No criminal charges, mind you, just $340 million to take care
of what amounted to a $250 billion conspiracy. Some might
characterize that as a good investment.

Finally, it would be unfair to leave out Morgan Stanley, lead
underwriter of the now infamous Facebook offering, who took
a play from Goldman Sachs and the great Paulson short.

They marketed Facebook stock to the unwitting while shorting
it all the way down, making another $100 million.

It is not just about Corzine anymore. The pathology of cronyism
is endemic and spreading.

Immoral Of The Story

So, what is the moral of this hideous little tale? What are the
lessons for our children?

Perhaps we should sit them down and wax philosophical:

"Kids, you know the old saying that 'crime doesn't pay?' Well,
that's bullshit.

Crime pays and pays big unless you are poor and without political
connections in which case you will likely join the American gulag
and soon.

"And that rule about always telling the truth? How can I put this
gently? That's bullshit, too.

Liars, good ones, rise to the top of government and corporations.
They are sociopaths by nature and have no empathy for anyone
other than themselves.

They are sick, but they are rich. You can make more money
from five minutes knowing the right insider than you can
from a lifetime of hard work.

"And, finally, about that Biblical 'suggestion' to 'do unto others
as you would have them do unto you?'

Well, that will get you a job selling printer cartridges at Best Buy
or teaching yoga to the woo-woos if you are limber.

"No, my children, If you want to make it big in this world, smile,
lie, follow the money, suck the ass of those on the fast train,
step on the little people and fuck anyone who gets in your way.

"Make Daddy proud."

Jim Karger is a lawyer, and frequent contributor to The Dollar
Vigilante, who has represented American businesses against
incursions by government and labor unions for 30 years.

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