CFTC Head Recuses Self from MF Global Situation
Senators question the recusal; believe attempt to avoid accountability.
Compiled by staff
Published: Dec 7, 2011
Republican Senators are questioning a top regulator's decision to recuse himself from an investigation into the collapse of MF Global Holdings. Commodity Futures Trading Commission Chairman Gary Gensler argues that by recusing himself, he is keeping his ties to former MF Global Chairman Jon Corzine from becoming a distraction from the agency's investigation. But Republican Senators believe the decision appears to reflect an attempt to avoid congressional accountability for his agency having missed apparent rule violations at the company.
Senator Mike Johanns, R-Neb., says he didn't believe Gensler's argument. Gensler worked at Goldman Sachs Group Inc. while Corzine was running the investment bank in the 1990s.
"To me, it looks like you're ducking the responsibilities of your job," Johanns said. "When this got uncomfortable, because money isn't there that should be there, and for whatever reason you folks didn't discover that until it looks like it's too late, you don't want to come up here and answer questions."
Corzine, a former U.S. Senator and Governor of New Jersey, is expected to testify before the House Agriculture Committee on Thursday. The CFTC is leading the regulatory probe into the missing money. Senator Charles Grassley, R-Iowa, urged the CFTC head to recuse himself from the agency's investigation last month, saying it was difficult to believe he could be completely objective. But Senator Bob Corker, R-Tenn., charges that his recusal was more about a career-enhancing situation to avoid accountability.
Meanwhile, like the House Ag Committee, the Senate Ag Committee has voted unanimously to subpoena former MF Global CEO Jon Corzine to testify at a Dec. 13 hearing on the collapse of MF Global and the whereabouts of the estimated $1.2 billion in missing customer funds.
In a joint statement, Ag Committee Chairwoman Debbie Stabenow, D-Mich., and Ranking Member Pat Roberts, R-Kan., said that it's important that citizens come forward and testify when asked by the committee, especially in a matter this serious. They said that by issuing the subpoena, the committee demonstrates their commitment to understand what happened to cause the extraordinary collapse of MF Global.
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