A decade ago, Jon S. Corzine was a freshman U.S. senator whose financial expertise earned him a spot on the Senate Banking Committee, where he could grill those called to testify before Congress.
On Thursday, Corzine was in the uncomfortable position of sitting in the witness seat, explaining to members of the House Agriculture Committee what had happened to $1.2 billion that farmers invested in his now-bankrupt financial firm, MF Global.
Corzine, 64, New Jersey's former governor, looking drawn and somber through more than two hours of questioning, had a simple yet confounding answer: I don't know.
"I simply do not know where the money is, or why the accounts have not been reconciled to date," Corzine told the committee.
Thursday's hearing was just the beginning.
The Senate Agriculture Committee and a House Financial Services subcommittee also have subpoenaed Corzine, and he is scheduled to appear before them next week.
It's believed to be the first time in at least 100 years that a former senator has been subpoenaed to testify before Congress. All three congressional bodies voted unanimously to order Corzine to appear.
"This really is illustrative of how far he has fallen," said Brigid Harrison, a political science professor at Montclair State University. "You had at one point someone who was at the top of the world, first as a U.S. senator and then a governor, essentially being forced to appear before a panel of his former colleagues.
"In my view, this is probably the pinnacle of embarrassment for former Gov. Corzine."
Federal agencies including the FBI are investigating whether MF Global used customer money meant to be kept separate from the investing arm of the company to invest in risky European debt, a violation that could bring criminal charges or civil litigation. MF Global's bankruptcy is believed to be the eighth largest in American history.
Corzine, former CEO of the company, apologized to farmers who, through MF Global, bought futures in products such as grain, corn, or fertilizer in order to minimize large swings in price.
MF Global, at Corzine's direction, invested heavily in European sovereign debt in the hopes of a big payoff for a company that was already in financial trouble when he took over in April 2010. But the strategy drew scrutiny from regulators and credit-rating firms, leading investors to begin withdrawing their money as they lost confidence. MF Global declared bankruptcy Oct. 30.
"I think about this every day," said Corzine, who grew up on a farm in central Illinois. "I could not be more regretful of the stress that we are bringing to people's lives."
In hindsight, Corzine said, "it would have been better to have taken different judgments at the time they were taken. But we, and I, did those things that we thought were in the best interest of shareholders and all the stakeholders."
But for many of the 46 committee members who represent farmers and ranchers, Corzine's story smacked of the same investor behavior that led to the 2008 financial collapse that drove the country into recession.
"It's pretty amazing that we're in this situation," said Rep. Colin Peterson of Minnesota, the ranking Democrat on the committee. "From all accounts, it seems to me that no one has learned a thing here. Wall Street is operating as if 2008 never happened."
Corzine, who worked for nearly 25 years at Goldman Sachs, serving as senior partner from 1994 until 1999, has been criticized for betting on European debt and not keeping enough cash in reserve to prevent a worst-case scenario, commonly called leveraging.
Lehman Bros., which went bankrupt in 2008, had leverage ratios of at least 30 to 1. By comparison, MF Global was leveraged at 40 to 1, according to reports.
At least $1.2 billion of customers' money - which was supposed to be kept segregated - may have been invested in European debt. Although customers should get back about 70 percent of what they invested in MF Global, they may never get all their money back, said James Kobak, lead attorney for the trustee liquidating MF Global.
Rep. Timothy Johnson (R., Ill.) asked when MF Global customers might know what they have left.
"They've got to buy seed . . . equipment, various other things for the crop season next year," Johnson said.
The claims process could take up to 60 days, Kobak said.
Asked whether he'd known customers' money was commingled and possibly lost on bad investments, Corzine hedged.
He said that since his resignation Nov. 3, four days after MF Global declared bankruptcy, he had had no access to paperwork that would help explain what happened. To the best of his knowledge, that money, including the missing $1.2 billion, was kept separate, as legally required, he said.
"I haven't reviewed records to be absolutely sure whether there was some small entry at some point, but I don't remember," he said. "As I sit here and as I said to the chairman and I felt comfortable that there was no intention, certainly on my part, to violate any segregation laws."
But for Rep. David Scott (D., Ga.), that answer wasn't good enough.
"Mr. Corzine, we have to find that money," he said, adding that he had to answer to Georgia farmers. "We've got to get better answers than this from you because you are the CEO."
Corzine said that ultimately, the missing money was his responsibility but he declined to speculate about what may have happened to it.
"I know I had no intention to ever authorize the transfer of segregated money. . . . I certainly couldn't confirm based on what I have before me today, but I know what my intentions were," Corzine said.
The Commodity Futures Trading Commission approved a new rule Monday that restricts the ability of firms to invest in sovereign foreign debt.
The commission had considered the measure in July but financial firms asked them to drop it. Corzine said he and other company executives argued against the change in a conference call with the commission's chairman, Gary Gensler. Corzine and Gensler were colleagues at Goldman Sachs.
Corzine said he had had limited contact with Gensler, adding that it was not the kind of relationship in which he called Gensler every week, every month, or even necessarily every year. He did not "exert undue influence" on regulators, Corzine said.
Gensler has recused himself from the investigation.
Because Corzine's firm is under investigation, anything he says at any of the hearings can be used against him. Many expected him to invoke his Fifth Amendment right to remain silent.
"As a former United States senator who recognizes the importance of congressional oversight, and recognizing my position as former chief executive officer in these terrible circumstances, I believe it is appropriate that I attempt to respond to your inquiries," Corzine said in 21-page written testimony.