Corzine’s Testimony

I watched the first half hour or so of Jon Corzine’s testimony yesterday, ready to catch him in double speak, as I have before.   I am definitely biased. I have not liked the man since the day I met him at the Sea Gulls Nest  when he was running for U.S. Senate in the summer of 2000.

The former governor, senator and master of the universe did not disappoint.  He blamed the collapse of MF Global on market conditions.  He blamed his inability to answer questions on the committee not giving him enough time and the fact that he didn’t have access to MF Global records, noting that he offered to testify voluntarily in January rather than under subpoena yesterday.  He painted his willingness to testify, rather than invoke the fifth amendment as his attorneys undoubtedly advised him to do, as a noble gesture rather than another reckless bet on his brilliance.

Corzine said, “I simply don’t know where the money is,” referring to the $1.2 billion in customer cash missing from the MF Global coffers.  Of course you don’t know where it is now, I thought, did you know where it was in October?

When asked directly by House Agriculture Committee Chairman Frank Lucas if he had authorized the transfer of customers’ funds, Corzine dodged the question and talked about his intentions.  He was obviously well prepared and coached. 

I had seen enough, so I thought.

Then I read Capitol Quickies’ account of Commodities Futures Trading Commissioner Jill Sommers’  and bankrupty counsel James Kobak’s testimony which preceded Corzine’s:

Sommers said the Commodity Futures Trading Commission is untangling complicated client accounts and “tens of thousands” of transactions to learn the whereabouts of “every single penny.”

She added that commodity brokerages are barred from using client money for their own investments, and there’s no evidence MF Global did that. If firms do use “segregated” client funds — which they may do for a small number of legally authorized purposes — they should immediately replace the money, she said.

Companies can’t “take money out of a segregated account, invest it, and  then return the money … at some later  time,” she testified.

Kobak testified that the bankruptcy trustee hasn’t found evidence of illegal activities by MF Global – yet.

“I would say we have suspicions, but we don’t have the knowledge” that client funds were illegally used, he said.

I was willingly rushing to judgement. 

Corzine speculated that maybe the money was owed to the firm by other banks or brokerages that hadn’t returned it as agreed.  That sounds like wishful thinking, but I wouldn’t put that past some bankers.  Hopefully that is that case and the farmers and investors can get their money back as a result of the investigation.

It feels weird to be rooting for Corzine.

• Tweet

Corzine will testify

Fox Business is reporting that Jon Corzine with not invoke his fifth amendment rights against self incrimination when he testifies before the House Agriculture Committee this morning.

The former U.S. Senator and former New Jersey Governor was chairman of MF Global until his resignation last month following the firm’s bankruptcy filing.  $1.2 billion is customers’ funds are missing.

Fox reports that Corzine will read a 21 page statement to the House committee which will include an apology and a denial that he knows where the $1.2 million went.

The hearing is scheduled for 9:30 AM.  It will be broadcast on C-SPAN.

Corzine’s prepared remarks are posted here.

• Tweet

Did Bill Clinton Help Jon Corzine Loot MF Global?

The JerseyNut makes the case that he did.

I speculated a while back that the Jon Corzine scandal could eventually be the undoing of Barack Obama.  Turns out that Crooked Jon may wind up being the downfall of the Clinton clan as well.

The digging into the rubble of MF Global has only just begun, and what do we find?  Unnecessary  contracts paying inordinate sums to Democratic godfather Bill Clinton:

Even as Jon Corzine’s MF Global was collapsing, a firm that includes former President Bill Clinton in a senior post was raking in huge fees for public-relations and financial advice from the ill-fated brokerage…

 

Read the entire post at Right, Wing-Nut!

• Tweet

Little Opening A U.S. Senate Campaign Account. Shakeup In Her Army

By Art Gallagher

Anna Little, the former Mayor of Highlands, former Freeholder and the 2010 GOP nominee in the 6th Congressional district is one step closer to challenging Monmouth County State Senator Joe Kyrillos for the GOP 2012 U.S. Senate nomination.

Little told Politickernj that she would be filing with the FEC today to open a campaign account for her U.S. Senate bid.

An embarrasing Little For Senate fundraising letter dated November 28, arrived in former donors’ mail boxes this week.

Atlantic Highlands Municipal Chairwoman Jane Frotten has resigned as Little’s campaign treasurer.  Atlantic Highlands Mayor Fred Rast has resigned as president of Anna’s Army Foundation,  “a non-profit educational foundation created in the image of Anna Little and her campaign for Congress in the 6th Congressional District of NJ.”

Until recently, the race for the Republican nomination to challenge Senator Robert Menendez was seen as battle between Kyrillos and fellow State Senator Michael Doherty.  Kyrillos has a Senate Exploritory Committee.  Doherty has been traveling the state touting his Fair School Funding plan.  MMM has learned from very reliable sources that Doherty is leaning against entering the Senate primary.   If Doherty does stay out of the race, a head to head match up between Kyrillos and Little could be in the making.

Little should take a reality check and reconsider before her dreams of a political future are irreparably shattered.

Little made a name for herself with the stunning upset victory over Diane Gooch in the primary for the 6th congressional district nomination in 2010.   Little’s margin of victory was 84 votes out of roughly 14,000 cast.

What Little has failed to realize, and she stops talking to anyone who tells her the truth, is that she didn’t win that primary so much as Gooch lost it.

Not that her victory was an accident.  The strategy of the Little primary campaign was to sneak up from behind.  I know because I, then still a close confidant of Little, helped design the strategy.   None of the “experts” took Little’s challenge of the county party lines and the uber funded Gooch seriously going into the primary.  That was the key to victory.  Build a ground game to bring out new voters and count on the fact that the “experts” don’t see the Tea Party wave coming.   Even the Tea Parties were shocked by the depth of the 2010 tsunami.  David Corsi’s inexplicable primary victory over Scott Sipprelle in the Monmouth County portion of the 12th congressional district proves that the party establishment was caught with their pants around their ankles.

They won’t be caught off guard again.

The Gooch campaign’s primary strategy was to ignore Little and run against incumbent Congressman Frank Pallone.   It was a good strategy for a conventional time.   Conventional times ended in 2010 before the establishment realized it.

It wasn’t until the final weekend of the 2010 primary campaign when Little managed to get onto TV, that the Gooch campaign realized that they might have a problem.  They tried legal maneuvers, that failed, to get Little’s ads pulled.  It was too late to respond.   Little had successfully used the “surprise them” and  “get the last word” strategies that we had successfully used in Highlands campaigns many times.

The problem with a “don’t let them see you coming” playbook is that it only works once.

A key political operative with close ties to both Gooch and Kyrillos has been keeping a close eye on Little since she declared her rematch with Pallone on election night 2010.

“She won’t get a free ride next time,” said the operative on the condition of anonymity, “we had a thick opposition research file on her in 2010 but didn’t use it because we weren’t taking her seriously and didn’t want to hurt her needlessly.  The file has gotten a lot thicker in the last year.”

With their discharge from Anna’s Army, Frotten and Rast join the growing brigade of Monmouth County politicos who will no longer go to battle for Little. 

Roughly a year ago, this blog compared Little to Jon Corzine over a policy position she took in one of her final acts as the mayor of Highlands.   Unfortunately, it is becoming apparent that Little also shares a personality trait with the former governor.  She surrounds herself with people who tell her what she wants to hear and burns bridges with those who tell her what she needs to hear.

Little had a bright political future ahead of her on election night in 2010.   Then she started talking. 

She declared her rematch with Pallone, announced the formation of Anna’s Army and challenged Gooch, who had funded independent anti-Pallone ads, to a rematch.  She failed to thank her supporters, Tea Party and establishment, who were caught off guard by her lack of humility. 

She’s on the verge of crossing a line from which there will be no return.   She should reconsider and start mending fences.  Many of her old friends are forgiving.

• Tweet

Timing Is Everything

The Federal Reserve and other central banks took action today to contain the sovereign debt crisis in Europe.

Stocks and commodity prices soared.

The bankers actions came six weeks too late for Jon Corzine.

• Tweet

Corzine does for Wall Street What He Did For New Jersey

MF Global files bankruptcy

http://www.nypost.com/p/news/business/with_frantic_sales_talks_failing_tiO1ERdMp7SN1PnC7UC54N

UPDATE

Regulators Investigate

http://finance.yahoo.com/news/Regulators-Investigating-MF-nytimes-752197815.html?x=0

ANOTHER UPDATE

News Alert
from The Wall
Street Journal

MF Global admitted to federal regulators that
money had been diverted out of customer accounts, according to a federal
official who said the move violated the law.

The Wall Street
brokerage, which filed for bankruptcy protection Monday, acknowledged the
shortfall amid mounting questions from regulators as they went through the
firm’s books while trying to facilitate a sale to Interactive Brokers Group, the
official said. Regulators still don’t know where the customer funds went, who
directed the move or how widespread the practice was, the official said.

• Tweet

What if we held an election and nobody cared? Part 2, 13th Legislative District

Prelude from Part 1:

In seven weeks New Jersey voters will have the opportunity to elect an entirely new state legislature.

Patrick Murray’s Monmouth University/Neptune Nudniks poll conducted in August indicates that New Jersey voters disapprove of their legislature by a 48%-35% margin.  Democrats disapprove by 45%-38%.  Independents, the majority, disapprove by a whopping 50%-28%.  Surprisingly, Republicans approve of the legislature by a 45%-41% margin.  Public workers disapprove by 55%-26%.

Based solely on those poll results, one might expect that we’d be in the middle of a spirited campaign with Democrats and public workers rallying to throw the Republicans out of office.  Obviously that is not the case.  Democrats control the legislature that their base and Independents disapprove of strongly.

Due to Dr. Alan Rosenthal’s decision that New Jersey voters are better off being continuously represented by legislators they don’t know, there are only a handful of competitive legislative races.  The Democrats will continue to control the legislature for the next two years.  Probably the next ten years.

13th Legislative District

This district keeps the Bayshore towns of Aberdeen, Hazlet, Holmdel, Keansburg, Keyport, Middletown, and Union Beach from the old 13th, adds Atlantic Higlands, Highlands, Monmouth Beach,  Rumson and Sea Bright from the old 11th and Fair Haven, Little Silver, Oceanport, Marlboro from the old 12th.

The Republican incumbents are Senator Joe Kyrillos and Assembly Members Amy Handlin and Declan O’Scanlon. O’Scanlon previously represented the old 12th.

On paper this should be a competitive district.  Democrats actually have a voter registration edge.  According to Labels and Lists Inc there are 34,193 registered Democrats, 33,758 registered Republicans and 74,492 unaffiliated (Independent) voters in the district.

Despite the slight registration edge for Democrats, the district generally votes Republican.  John McCain won the district in 2008, Chris Christie beat Jon Corzine here by a wide margin, and Anna Little beat Frank Pallone here in 2010.

Of the 16 municipalities in the 13th, 9 of the are comfortably controlled by Republicans. 6 are competitive towns with a local governing body that shifts from R to D on occasion.   Aberdeen is the only reliably Democratic town on the municpal level.

With 31% of the registered voters in the district, Middletown dominates.  Even though their registration edge is less than 2000 voters, Republicans dominate Middletown.  Middletown voters love their hometown office holders, Joe Kyrillos and Amy Handlin who they have elected time after time over the last two decades plus; Kyrillos served two terms in the Assembly from 1988 through 1991 and has been a Senator since 1992.  Handlin was a Monmouth County Freeholder from 1990 through 2006 when she entered the Assembly.

Roughly 73% of the district is new for O’Scanlon.  Yet, that 27% from his old district, Fair Haven, Little Silver, Oceanport and Marlboro knows O’Scanlon well.  They elected him to two terms in the Assembly after he lost to Michael Panter by only 73 votes in 2005.

The Democrats are running two former Hazlet mayors and a former Middletown township committee member. 

Christopher Cullen is the former Hazlet Mayor challenging Kyrillos for Senate.  Cullen, who served one term on the Hazlet Township Committee, won the nomination for Senate as a write-in candidate in the primary after failing to submit his petitions after being tabbed at the nominating convention in the spring.  He is the director of facilities maintenance and custodial services at MAST High School.  He is a member of Operating Engineers Local 68 and was previously a member of the teamsters.

Hazlet’s Community Center is named for Cullen’s father, James J. Cullen, who served the community for many years as a Republican office holder.

Both Democratic Assembly candidates won their first municipal elections in the wake of Operation Bid Rig.  Lavan was elected to the Hazlet Township Committee in 2005 and served through 2010 when he lost his reelection bid.  Like Cullen, his union roots are deep.  He has been a member of the International Longshoreman’s Association for 46 years.  He is making his support of unions, and the Right to Work legislation that Handlin and O’Scanlon have sponsored, the center piece of his campaign.

Short, a former Republican and a West Point graduate was the first Democrat elected to the Middletown Township Committee in 2006 in the wake of Bid Rig. He was swept out of office with Jon Corzine in 2009 as Chris Christie and the GOP swept Middletownoverwhelmingly.  Short was ambivalent about seeking a second term, but ultimately ignored MMM’s advise that he take the plaque.

Based on the early inactivity of the campaign, I was wondering if the feisty Constitution Party slate of Steve Boracchia for Senate, Bill Lawton and Frank Cottone might actually garner more votes than the Democrats in this race.  However, a volunteer from the Democratic campaign reached out to me to optimistic declare that the Democrats will produce a shocking victory on election day.  The volunteer said that Cullen, Lavan and Short are going in 20 different directions knocking on doors and that they are marshalling their scare resources for a last minute sprint into office.

While the 13th districts candidates don’t have the state Democratic support that the 11th district candidates have enjoyed….a paid staff and high profile fund raisers hosted by Newark Mayor Cory Booker and Senate President Stephen Sweeney…the volunteer said that the campaign is expecting an influx of union money and that Assembly Majority Leader Joe Cryan is coming to the district next week to raise money for the slate.

• Tweet

Christie: “I Stand With You”

By Art Gallagher

InTheLobby and Capitol Quickies report that Governor Chris Chrisite told a statehouse rally of pro-life demonstrators, “I stand with you,”  adding that he stands “with each and every one of those precious human lives.”

Our old Monmouth County friend Bob Jordan, now a statehouse reporter and blogger, quoted Christie on Capitol Quickies as follows:

“What we need to do each and every day is to live our lives in a way that encourages everyone to understand why this cause is so important,” Christie told those gathered. ”To show that we respect the life of every human being, and that every human being is one of God’s creatures and deserves the love and respect that God gives to all us.”

I was immediately reminded of the last time a governor stood on the statehouse steps and said “I stand with you.”   That was back on June 19, 2006, five months into Jon Corzine’s term as governor. It was 11 days before Corzine and the Democratic legislature shut down the government.

That day, Corzine joined a rally of 10,000 public employees and declared, “I’ll stand with you for your pension rights …”

Maybe Trenton really has been turned upside down.

Governor Christie had quite a day today.  In addition to his unequivocal remarks at the pro-life rally, the governor conditionally vetoed COAH  legislation that failed to reform how affordable housing is provided in New Jersey and increases the unnecessary burden on the State’s municipalities.

In a statement announcing the veto, Christie said:

“If the goal of this legislation is to replace an already broken system for providing affordable housing with a common sense, predictable and achievable process, then this bill sorely misses the mark,” said Governor Christie.  “The Senate has presented a considerably different version of the legislation I originally supported in June – one that was simple and sufficiently close to the recommendations contained in the March 19, 2010, report of the Housing Opportunity Task Force. This version perpetuates the Council on Affordable Housing (COAH) nightmare by placing further burdens on municipalities and the environment while creating rather than eliminating additional bureaucracies in order to satisfy the needs of special interests.  I believe this bill should be amended to return it to its original, beneficial form as passed by the Senate in June.”

The original version of S-1 passed by the Senate in June 2010 called for:

 

• eliminating COAH and the arbitrary affordable housing numbers it assigned to municipalities
• requiring that 1 out of every 10 newly constructed housing units be designated as affordable (towns with no growth would have no further affordable housing obligation other than to inventory and rehabilitate its existing affordable housing stock)
• limiting State review of municipal housing plans
• protection against builder’s remedy lawsuits for municipalities 
• elimination of commercial development fees, though residential development fees were permitted to be charged if a developer chose not to build affordable units on-site and decided to pay the residential development fee instead

 

In its current, unacceptable form, S-1:

 

• requires 10% of all the housing units in every municipality in the State to be affordable
• necessitates that 25% of the affordable housing obligation be met by inclusionary development, legislating sprawl by increasing the amount of mandated new housing by 500% to 700%.  
• creates a new regulated entity to review a municipality’s housing plans
• causes towns to have to pay for two planners – one to draft the plan, and the other to certify it meets the requirements of the bill
• provides no meaningful protection against builder’s remedy lawsuits
• requires towns in the Highlands, Pinelands, Fort Monmouth and Meadowlands districts to have 15%to 20% of all new construction as affordable

As if that were not a full day’s work, Christie held a Town Hall Meeting in the Camden County borough of Chesilhurst this afternoon where in touted his pension and public employee health benefit reform package.

The highlights of the Governor’s “fiscal sanity” package are as follows:

Christie Reform Agenda for Public Employee Pensions – At a Glance

The current pension system is underfunded by $54 billion and, unless reforms are enacted, that number will grow to $183 billion by 2041, even if the taxpayers make all statutorily required pension fund contributions.

 

·         Governor Christie’s reforms will reduce total pension underfunding from $183 billion in 2041 without reform to $23 billion in 2041, and

·         Increase the aggregate funded ratio from the present level of 66% to more than 90% in 30 years.

 

A PDF of Governor Christie’s Reform Agenda proposal for pensions is attached to this release.

 

 

Christie Reform Agenda for Public Employee Health Benefits – At a Glance

Today, New Jersey’s unfunded liability, or future costs expected in the health benefits system, is $66.8 billion.  New Jersey spends $4.3 billion annually on public employee and retiree health care costs, and the problem is only getting worse.

 

The cost for operating the health care benefits program for public employees and retirees is slowly sapping New Jersey’s budget to the point where it is becoming impossible for state and local government to fund critical priorities and bring rising deficits into line.

 

·         Without immediate action, costs will increase by more than 40 percent over the next four years.  By contrast, the average cost to an active public employee will increase by less than 10 percent over the same period.

·         The cost of health benefits, as a percent of New Jersey’s annual budget, has grown from 4.5 percent in 2001 to more than 9 percent today.

 

Governor Christie’s reforms will restore fairness to the system by:

·         Transitioning the cost-sharing in the system to a more realistic model,

·         Offering more options for employees to choose from, and

·         Switching to a system requiring employees to pay a percentage of their premium rather than a percentage of their salary.

Personally, I don’t think the pension reforms go far enough, but that will be the subject of a future post.  For this post, I just appreciate how far we’ve come in one year under Christie’s leadership.

Governor Christie will be holding a Town Hall meeting in Middletown on Wednesday morning, 11 AM, at the VFW on Route 36.  The doors open at 10:30.  Seating is first come, first seated.

• Tweet