Corzine tie didn’t compel Gensler MF Global recusal, review says

Internal CFTC review finds no need for Gensler recusal on MF Global

‘A Distraction’

On Nov. 3, agency lawyers told Gensler he didn’t need to withdraw from the MF Global investigation. Gensler decided the same day to recuse himself anyway. In a Nov. 8 statement, Gensler said that he didn’t want “my participation to be in any way a distraction in this important matter.”

The agency’s lawyers decided to produce a written justification for their opinion for the record, Steve Adamske, a CFTC spokesman, said yesterday. Adamske said the lawyers based their analysis on an interview with Gensler and said he didn’t know of additional interviews with Corzine or others named in the memo.

Steven Goldberg, a New York-based spokesman for Corzine, declined to comment.

Early Partners

The December memo produced by the lawyers describes an overlapping set of business and political relationships, while not revealing close personal ties with any of five people related to MF Global.

Gensler, 54, and Corzine, 65, were among between 100 and 200 Goldman Sachs partners in the early 1990s, working together on the trading floor of the bank’s fixed-income division.

In January 1993, Corzine asked Gensler to serve as co-head of fixed-income trading in the Tokyo office, which made Corzine one of Gensler’s direct supervisors. “Their relationship during this period was solely professional,” the memo said.

Between 1995 and 1997, Gensler, then in New York, was co- head of finance, reporting to Corzine and Henry Paulson. In all, Corzine spent 24 years at Goldman Sachs, rising to co-head of the firm with Paulson, who later became President George W. Bush’s Treasury secretary.

After Gensler and Corzine left Goldman, they had infrequent discussions, according to the memo. Corzine, a Democrat elected as U.S. senator from New Jersey and later governor of the state, occasionally spoke with Gensler in 2002, when Gensler was serving as an adviser to lawmakers drafting the Sarbanes-Oxley Act. They stood together on the Senate floor as lawmakers moved toward final passage.

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