Jon Corzine left Goldman Sachs with a net worth far exceeding even that of Mitt Romney today. Many accounts of his tenure at Goldman suggest he “failed up” the corporate ladder.
Pushed out of Goldman in a power struggle (sparked in part by his support for a government bailout of Long-Term Capital Management), he nonetheless pocketed somewhere between $350 million and $500 million when the company went public. He used the cash to buy himself a Senate seat, spending $62 million out of his own pocket.
After the Senate, he spent nearly $40 million of his own money to win the New Jersey governorship. While he was running for senator, the married-but-separated Corzine struck up a romantic relationship with Carla Katz, also married and head of Local 1034 of the Communications Workers of America. They broke up in 2004, but the flirting apparently never ended. In 2007, Katz and Corzine were both involved in negotiations over a state workers’ contract. In one e-mail during that time obtained by the Newark Star-Ledger, Katz informs the governor, “BTW, I had an over the top erotic dream about you last night. Bad boy!!”
Bad boy indeed. When the couple broke up, and after her union had endorsed Corzine and worked for his reelection, the governor’s lawyers negotiated a settlement whereby he reportedly paid Katz more than $6 million and forgave a half-million-dollar loan he made to her when they were still an item.
When Corzine ran for reelection as governor, both President Obama and Vice President Joe Biden stumped for him. Biden explained that from the moment he and the president sat down to figure out their economic strategy, “Literally, the first guy I called was Jon Corzine. It’s not a joke. It’s not a joke. First of all, he’s the smartest guy I know in terms of the economy and on finance, and I really mean that.”
Despite that ringing endorsement, Corzine lost his 2009 reelection bid to reformer Chris Christie. So Corzine went back to Wall Street, as chief executive of MF Global Holdings, a bond-trading firm. A research note from the firm of Sander O’Neill Partners summarized what the Street expected from Corzine: “We suspect that his contacts in Washington could prove useful as MF Global navigates a shifting regulatory environment.”
Corzine proceeded to do exactly the sorts of things Wall Street has become infamous for: making crazy bets with other people’s money, counting on governments to bail out the private sector, and, allegedly, expecting to get friendly treatment from regulators. Gary Gensler, chairman of the Commodity Futures Trading Commission, was an old friend and colleague of Corzine’s at Goldman Sachs and in Washington. Gensler had been a key aide to Senator Paul Sarbanes and had reportedly worked closely with Corzine writing the Sarbanes-Oxley bill. At MF Global, under Gensler’s watch, Corzine bet more than $6 billion on the European-sovereign debt crisis, using borrowed client money. MF Global also apparently commingled client and company funds to pay off financial obligations, which is illegal.