Prosecutions unlikely against MF Global—prosecutors want a “smoking gun” or they won’t act

Because, you know, that’s how all prosecutions work in the U.S. — no smoking gun and the murderer / drug dealer / black driver in the “differently-hued” neighborhood skates. Because we, a forgiving people, have such high standards for who goes to jail in America.

Sorry, I forget myself. I was thinking of a country with Rule of Law. Our own murderers / drugsters / wrongly-hued will never get off. The whiff of a possibility of a crime, and you could even end up in solitary for years on end.

Only the 0.01% always escape justice. It’s the old old story: “Rule of Law for thee; skatage for me and my friends.” The wicked prize itself buys out the law; after all, it’s why that money exists.

NY Times (h/t Masaccio; my emphases):

When the money first went missing, prosecutors in New York and Chicago scrambled to stake a claim. Now, four months later, both Preet S. Bharara, the United States attorney in Manhattan, and Patrick J. Fitzgerald, his counterpart in Chicago, are shying away from leading the case, one of those people involved in the case said.

Indeed, a number of federal prosecutors have expressed doubts to others involved in the case that anyone at MF Global — including the firm’s chief executive, Jon S. Corzine, and back-office employees in Chicago — intentionally misused customer money, said people involved in the case who were not authorized to speak publicly about the investigation.

That’s the Patrick Fitzgerald, hero of the aggressively-cautious failed Cheney prosecution. And Preet Bharara? He’s this upstanding fellow.

A note on how to read the press — People “involved in the case” means insiders on the prosecution team(s). “Not authorized to speak publicly” means “authorized leakage” — in other words, just the opposite of what the words actually say. This is the refusing-to-prosecute prosecutors playing out their cover story through anonymous insiders.

How do you know I’m right? Because this is the expected story — the story that says, unless Jon Corzine has the bleeding body of his babysitter leaking from the trunk of his car, he skates. The cops will always say, “Oh, it’s you, Mr. C. Drive right through.” Dog bites man, says “unauthorized source.” See how that works?

What’s the unexpected story? That someone like this can be arrested for anything, even by Pat Fitzgerald:

[Jon Corzine is] a Top 0.1% in spades: a Goldman CEO, a senator, a governor, and a major Dem fundraiser in an election year. If he does see a jail or a courtroom, it will be revolutionary.

Now if the anonymous source had said, “Corzine’s headed for the slammer” ahead of the official announcement — that’s a candidate for unauthorized leaker (also a candidate for unemployed prosecutor).

Will Jon Corzine ever be indicted? Will the sun set in the east? Stay tuned, but bring something to read.

Masaccio sarcastically adds more:

$1.2 billion disappears, but that isn’t a smoking gun[?] What’s the matter with these people? … See, if it was Just One of those Things, then it wasn’t a crime. If you accidentally dip into my bank account and use it to pay your debts … that just isn’t a crime. Circumstantial evidence isn’t enough to prove a crime any more [for the elite perpetrators]. You have to have an e-mail from someone saying: “I’m going to use customer funds to pay counterparties of MF Global.”

Investigators are closing in on the money. Within a week of bankruptcy, MF Global sent $165 million to an account at JPMorgan from an account that held segregated customer funds. Someone at MF Global instructed the back office to do it, and someone authorized the transaction. But we can’t expect a US Attorney, say Preet Bharara in New York, or Pat Fitzgerald in Chicago, to go to a Grand Jury and say something like this.

The payment was authorized by these defendants. Those defendants knew how much cash MF Global had, and they did nothing to stop the first defendants from paying more than that to counterparties. Here are the records.

Masaccio wants to let a jury of their peers decide the case. A former prosecutor himself, he lays out the prosecution and defenses deftly. Do read; it’s fascinating.

But it’s not like it matters, it seems. Will Jon Corzine ever be indicted? The New York Times is preparing us for No.

Update: This comment by Bucklerjc summarizes the situation perfectly, and also points out our own smoking gun, the original sin in America’s Rule of Law “problem.”


(To follow on Twitter or to send links: @Gaius_Publius)

Gaius Publius is a professional writer living on the West Coast of the United States.

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