Jon Corzine's Appetite For Hair-Raising Challenges

Nov 8, 2011
Originally published on November 8, 2011 7:25 am
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And the recent bankruptcy of the U.S. commodities trading firm MF Global thrust a familiar name into the spotlight: Jon Corzine. Before running MF Global, Corzine was the governor of New Jersey Governor and a U.S. senator; before that he was chairman and CEO of Goldman Sachs. Corzine was seen as so critical to MF Global's success, the firm promised an increased payout to its investors if Corzine was hired away by the Obama administration. But last week, as investigators began searching for hundreds of millions of dollars missing from the accounts of MF Global clients, Corzine did something different. He resigned. NPR's Yuki Noguchi has this profile.

YUKI NOGUCHI, BYLINE: Jon Corzine was born and raised on a central Illinois farm. His father survived the Great Depression and abhorred debt. His son built a career on debt. Jon Corzine started his career as a bond trader, a job fraught with big risks and rewards. On at least one occasion, Corzine lost about $150 million on trades, then unwound the loss by brokering other deals. Those who know him say he loves this kind of hair-raising challenge.

CHARLES ELLIS: It was sometimes spooky to watch him doing it.

NOGUCHI: Charles Ellis was a longtime consultant for Goldman Sachs who also wrote a book about the firm.

ELLIS: And if you were a rational, quantitative, systemic analyst, you would not have felt comfortable doing some of the things he did. Just as he would not have thought you were striving hard enough.

NOGUCHI: Corzine, who wears glasses and favors sweaters, looks more like a professor. But inside he was pure business cowboy.

WILLIAM COHAN: He gets off on risk. I mean, he likes risk-taking and he probably thinks he's pretty good at it.

NOGUCHI: William Cohan interviewed Corzine a number of times for his book "Money and Power: How Goldman Sachs Came to Rule the World." Cohan says Corzine's career at Goldman was marked by many high-risk decisions. He managed the firm through 1994, when massive losses and defections threatened its existence. He backed a risky bailout of hedge fund Long-Term Capital Management. He also pushed Goldman to go public, a controversial decision at the time. Corzine eventually lost a battle for control over the firm, and ran for Senate. After one term, he poured more of his personal wealth into running for governor.

Tom Wilson chaired the Republican State Committee at the time of Corzine's governorship. He says aside from a battle over raising state sales taxes, which Corzine won, the former governor seemed risk-averse in office.

TOM WILSON: He never risked his political capital, he never was willing to stand up to, you know, the party bosses and the party leaders and the legislative leaders who pretty much dictated his agenda.

NOGUCHI: At MF Global, Corzine seemed to regain his appetite for risk. Shortly after taking the job last year, he spoke about ambitions to make the firm bigger. Here he is on Bloomberg TV.

(SOUNDBITE OF BLOOMBERG TV BROADCAST)

NOGUCHI: As part of that global expansion, Corzine took a big stake in sovereign European debt. It was a highly leveraged bet that put the firm on the line. When it soured, clients fled, MF Global filed for bankruptcy, and regulators say the firm is missing hundreds of millions of dollars that was supposed to be in clients' accounts. The incident has fueled speculation about whether Corzine authorized accessing clients' money. This is something Dan Neidich finds hard to believe. He spent 25 years at Goldman and is a friend of Corzine's.

DAN NEIDICH: There is no chance, categorically, that Jon Corzine would ever do anything unethical. I promise you, it's just not possible.

NOGUCHI: There is a difference, he says, between taking financial risks and breaking the law. And besides, Neidich says, what motivates Corzine is neither money nor ego.

NEIDICH: This is a guy who, you know, grew up in a small town in Illinois, you know, who went to college on the GI Bill, and always thought that he'd been extraordinarily fortunate in his life and that he thought that he owed to give it back.

NOGUCHI: Corzine resigned from the company on Friday. In a statement he said he felt great sadness for what has transpired at MF Global and how it affected its clients, employees, and many others. Yuki Noguchi NPR News, Washington. Transcript provided by NPR, Copyright NPR.