Colorado Lawmakers Call for Special Prosecutor to Investigate MF Global

May 16, 2012
Corzine, whose firm could not account for more than $1 billion in investors money, made a $4,600 donation to Sen. Mark Udall (D-Colo.). Udall has so far elected not to return the donation.graciepoo / Foter

WASHINGTON – Rep. Cory Gardner agrees that a special prosecutor should investigate MF Global Holdings, the failed derivatives brokerage firm that cannot account for $1.6 billion of investors’ money.

The Fort Collins Republican has signed a congressional petition that urges Attorney General Eric Holder to appoint an outside counsel because a major Democratic fundraiser led the defunct company.

“The only way to get straight answers on this is to get someone who’s not compromised,” Gardner said in an interview last week. “There were a lot of people in Colorado affected (by the firm’s collapse), especially in agriculture and commodities trading.”

Rep. Scott Tipton too has signed the letter which began circulating in Congress last week. The Cortez Republican cited the Obama administration’s ties with Jon S. Corzine, the former CEO of MF Global who has helped raise $500,000 for President Obama’s re-election campaign.

“It’s a conflict of interest, or a perception of one. We’ve got Corzine who’s a major bundler for the president,” Tipton said in an interview last week.

Corzine has given $3.9 million in campaign contributions to Democrats over the past two decades, including a $4,600 donation to Senator Mark Udall (D-Colorado) during his last campaign.  According to the most recent FEC report, Udall had yet to return the donation.

Sixty-five House Republicans have signed the letter, which Rep. Michael Grimm (R-N.Y.) wrote. None of the signatories are Democrats. Carol Danko, a spokeswoman for Grimmn, said “we wanted to be bipartisan, but were only able to get Republicans.” The Justice Department declines comment on the letter, spokeswoman Alisa Finelli said.

Rep. Doug Lamborn (R-Colorado Springs) said he has not reviewed the letter, while Rep. Mike Coffman (R-Lone Tree) said he would sign it.

While Colorado House Democrats also declined to discuss the contents of the letters, two leading House Democrats said that appointing a special prosecutor in the case of MF Global is unnecessary.

Rep. Barney Frank, a member of the Financial Services Committee, rejected the argument that Corzine’s fundraising represents a conflict of interest for the administration. “That’s true of any number of people: Just because they raise money for someone doesn’t mean it’s a conflict of interest,” Frank said in an interview.

Rep. Henry Waxman of California said that appointing a special prosecutor would be counterproductive. “I’m very tired of these special prosecutors wasting taxpayers’ dollars,” he said, referring to the Clinton-era investigations into the Whitewater land deal and intern Monica Lewinsky.

With the fall election less than six months away, both House Republicans and Democrats have accused each other of using Grimm’s letter as a political football.

The letter suggests that Corzine received preferential treatment from regulators because he worked at the investment banking firm Goldman Sachs with Gary Gensler, who President Obama selected as the chairman of the U.S. Commodity Futures Trading Company.

When Waxman was told of this criticism, he noted that Grimm has “been accused of ethics violations.” Grimm was accused of extorting campaign contributions from an influential rabbi earlier this year, a matter that media organizations say the FBI has begun probing.

Grimm accused Holder of mishandling multiple federal investigations at a press conference last week. Grimm’s spokeswoman denied the allegation. “Given the congressman’s background, as a former FBI agent who specialized in fighting white-collar crime, he has over a decade of experience looking into these sorts of questions,” Danko said in an interview.

For his part, Gardner suggested that Waxman’s opposition to the appointment of a special prosecutor was political in nature. “I wonder if he would have (opposed) it when Democrats were in power,” he said.

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