Tuesday, December 6, 2011
Former MF Global chief executive and former Senator and Governor Jon Corzine has reportedly been subpoenaed to testify this Thursday, December 8 before the House Agricultural Committee concerning MF Global.
The ostensible primary purpose of Congressional committee hearings is to gain information so that the Congresspersons can enact appropriate legislation. Cynics, however, might contend that a major purpose is to let the folks back home know that their Congressperson is tough on Wall Street.
In any case Corzine, on advice of his low-key high-quality counsel, Andrew Levander, will most likely assert his Fifth Amendment privilege against self-incrimination and decline to answer questions. MF Global reportedly "borrowed" customer funds to support its precarious positions in foreign sovereign debt, commingling these funds with its own funds. Although I do not venture to state whether any crime was committed, or whether Corzine was involved in or knowledgeable of any wrongful activity, most criminal defense lawyers representing a hands-on head of a less-than-giant entity against which such accusations have been bruited at this stage would take a conservative approach and advise their client to remain silent. On the other hand, public figures, concerned with their political and public futures (although Corzine's future political career does not look rosy) and often with high estimations of their own powers of persuasion, sometimes feel that they must present their side of the story or else look like "criminals," and that they can do so effectively.
The obvious dangers of testifying are that the witness, whatever his culpability or lack of culpability, may make statements that may later be used as admissions in a criminal or other proceeding or, as in Roger Clemens' case, as the basis for a perjury charge. Of course, although the Supreme Court has pronounced that the protection of the Fifth Amendment applies to the innocent as well as the guilty, a refusal to answer questions is viewed by most people as an indication of guilt. Thus, the decision whether to testify is a "damned if you do, damned if you don't" situation.
Corzine, if he does not wish to testify, through his lawyers will likely seek, or has sought already, to eliminate the necessity of his physical appearance by submitting a letter explaining his intention to invoke his constitutional privilege. That request almost certainly has been or will be refused. Letters do not make good TV. Alternatively, Corzine likely will seek, or has already sought, to limit his appearance to a short statement stating his assertion of his constitutional right against self-incrimination. That request might also be refused. The Congresspersons may want Corzine to undergo a public flogging by "Q&R" -- question and refusal. That does make good TV.
Corzine could conceivably be granted use immunity and, since his resulting testimony could not then be used against him, be deprived of his Fifth Amendment protection and required to testify. However, since Oliver North's conviction was overturned based on the taint from his immunized Congressional hearing testimony, Congress has been extremely wary of using its immunity power.