'Ponzi Scheme' Takes Down Jon Corzine; Networks Forget He Was 'Top' Economic Voice

Flashbacks of 2008 were on the minds of many when MF Global, a Wall Street firm led the Democratic former N.J. Gov. Jon Corzine, filed for bankruptcy amid a huge scandal. Forbes said the firm owes $2.2 billion to JP Morgan and Deutsche Banks. But the broadcast networks had amnesia when it came to their previous coverage of Corzine, his role as adviser and fundraiser for Obama and their previous use of him as an economic expert.

MF Global filed for bankruptcy protection on Oct. 31. The firm, under Democrat Corzine’s leadership had invested in more than $6 billion European sovereign debt and was overleveraged (borrowed too much). Why would they have invested in such risky assets? According to both New York Times and Fox Business contributor Charles Gasparino, Corzine was betting on a European bailout.

The firm’s bankruptcy from bad investments would have been scandalous enough, but with CBS News.com reporting Nov. 4 that more than $600 million dollars is still missing, landing Corzine in “hot water.” Corzine resigned as CEO on Nov. 4 after hiring Andrew J. Levander, a well-known criminal defense attorney. The former governor and his firm are under F.B.I. investigation.

The networks have done little reporting on this “big name” Democrat’s scandal airing just 12 news stories or briefs (most were briefs), according to Nexis. On the morning of Nov. 1, not one of the three networks reminded viewers that Corzine is a Democrat. ABC, CBS and NBC also forgot to mention that they have relied on the former politician as an economic expert and that he is tied to the Obama administration.

Those 12 stories entirely ignored Corzine’s cozy relationship with President Obama for whom he raised more than $500,000 according to MSNBC. They forgot he was a potential top pick for Treasury Secretary, even though they had reported it in 2008. And they said nothing about the way they’ve consulted Corzine as an economic and political expert in recent years. He had even promoted financial regulation in an ABC interview because it would “be good for Americans.”

CNBC’s Andrew Ross Sorkin reacted to the MF Global scandal saying on NBC “Nightly News” by comparing it to 2008. He described MF Global’s investments in European bonds as high stakes gambling, called it like a “mini Ponzi scheme” and similar to the Maddoff scandal. Sorkin’s report was one of the only full stories (rather than a news brief) about the MF Global scandal on ABC, CBS or NBC.

Ironically, Corzine has been a go-to expert for the networks. NBC’s “Today” included a quote from Corzine from an MSNBC appearance saying what he thought Obama should do to show that he is serious about the economy on Aug. 10, 2011. Just a year earlier, on Aug. 15, 2010, the former governor and senator was one of “four top voices on the economy” interviewed on ABC’s “This Week.”

Recent coverage also failed to mention that the firm Corzine used to work for, Goldman Sachs, received a huge government bailout through TARP and was charged with fraud by the SEC in 2010. Corzine had been “forced out” of his CEO position at Goldman Sachs. During his term as governor, Corzine was tainted by a bribery and “corruption” scandal involving many of his allies in New Jersey. “His own commission of the Department of Community Affairs, Joseph V. Doria Jr., had his home and office searched by the F.B.I.,” according to the Times.

That New Jersey corruption scandal hurt Corzine, who lost his reelection bid for governor after what the North Jersey Star-Ledger called a “tumultous term.” The Star-Ledger said he was elected to “tame New Jersey’s runaway spending and property taxes,” but after failing to do that, voters elected Republican Chris Christie instead.

While he was still governor, Corzine stumped for Obama’s economic policies on ABC, CBS and NBC, promoting everything from the stimulus package to health care policy and financial regulation.

On Oct. 12, 2008, Corzine told NBC “Meet the Press” viewers that “we need a real economic stimulus …that means infrastructure.” CBS had interviewed Corzine on Sept 19, 2008, to present Obama’s prescription for the economy.

The networks even asked Corzine about possibly being the Treasury Secretary immediately following Obama’s election victory. NBC said the former Goldman Sachs CEO was on the “short list” for Obama’s Treasury pick.  Matt Lauer asked Corzine point blank on Nov. 14, 2008, “Are you going to be Treasury Secretary? Or would you like to be chairman of the Federal Reserve?”

As recently as August 2, 2011, Sorkin asked in his financial column (DealBook) for The New York Times if Corzine could be on the “short list” (again) to replace current Treasury Secretary Timothy Geithner.

Julia A. Seymour
Julia A. Seymour
Julia A. Seymour is the Assistant Managing Editor for the MRC's Business and Media Institute.