More proof that Corzine aided and abetted ENRON

His Wall Street Way: Corzine Fought for Tax Breaks for Enron, But Raises Taxes on New Jerseyans

By Chris Christie …

In 1985, Jon Corzine Earned A Spot On Goldman’s “Elite Nine-Member Management Committee.  He Was Instrumental in Directing…More Than 9,000 Employees.” (Jeff Pillets, “Corzine built success by taking big risks senate race represents latest gamble,” The Record, 10/22/00)

Jon Corzine And Goldman Sachs Made Around $69 Million In Fees For Their Work For Enron. “…according to data from First Call/Thomson Financial, top Wall Street firms made $323 million in fees for underwriting stocks and bonds issued by Enron.  Goldman Sachs led the list at $69 million…” (Ben White, “Tired of Stock Answers?,” Washington Post, 04/14/02)

While Corzine Was On The Management Committee, Goldman Created A Financial Vehicle Known As “Monthly Income Preferred Shares” (MIPS), Which Allowed Enron To Hide Significant Amounts of Debt In These Tax Havens. “In 1993, Goldman Sachs & Co. invented a security that offered Enron Corp. and other companies an irresistible combination.  It was designed in such a way that it could be called debt or equity, as needed.  For the tax man, it resembled a loan, so that interest payments could be deducted from taxable income.  For shareholders and rating agencies, who look askance at overleveraged companies, it resembled equity.” (John McKinnon and Greg Hitt, “Double Play: How Treasury Lost In Battle To Quash A Dubious Security,” Wall Street Journal, 02/04/02)

Corzine’s MIPS Allowed Enron To Hide Their Debt And Keep Up The Façade That Lead To Eventual Collapse. “Enron’s collapse cannot be traced to any one decision.  But the survival of MIPS was an early milestone for what became a series of transactions in which the company borrowed more and more without making clear that was what it was doing.” (John McKinnon and Greg Hitt, “Double Play: How Treasury Lost In Battle To Quash A Dubious Security,” Wall Street Journal, 02/04/02)

The Clinton Administration Believed MIPS Were A “Charade” And Chose To Investigate. “To top officials at the Clinton Treasury Department, the so-called Monthly Income Preferred Shares, or MIPS, looked like a charade – a way for companies to mask the size of their debt while cutting their federal tax bill.” (John McKinnon and Greg Hitt, “Double Play: How Treasury Lost In Battle To Quash A Dubious Security,” Wall Street Journal, 02/04/02)

Jon Corzine Actively Fought To Keep This Charade (MIPS) Legal, Even Writing A Letter To Lobby In Support Of The Gimmick On Enron’s Behalf. “The lobbyists successfully asked members of the House and Senate tax-writing committees to announce their opposition to the Treasury proposals in letters to colleagues or to the Clinton administration.  Those letters, in turn became fodder for lobbyists seeking broader support…One letter, signed by Jon Corzine, then chief executive officer of Goldman Sachs…portrays the Treasury as attempting to draw “completely arbitrary lines” between debt and equity.” (John McKinnon and Greg Hitt, “Double Play: How Treasury Lost In Battle To Quash A Dubious Security,” Wall Street Journal, 02/04/02)

Goldman Sachs Kept Their Buy Ratings High On Enron; Sticking By Them For Longer Than Most. “Goldman Sachs…had ‘strong buy’ ratings on Global Crossing and Enron until Oct. 4 and Nov. 21, respectively.” (Ben White, “Tired of Stock Answers?,” Washington Post, 04/14/02)

5 years After Jon Corzine Successfully Lobbied For Keeping The MIPS Loophole Open, Enron Collapsed. The Failure at Big Companies Cost American Families $60,000 On Average.  “The string of accounting failures at big companies in the last year has cost U.S. households nearly $60,000 on average as some $5 trillion in market value was lost, a member of the Securities and Exchange Commission said Thursday.” (Associated Press, “Accounting Scandals Cost Average Household $60K,” 11/15/02)

Enron Reported Debts of $10.2 Billion In 2000 But When They Collapsed Their Real Debt Was $40 Billion. “At the end of 2000, Enron reported debts of $10.2 billion on its balance sheet. In its bankruptcy filing, it listed debts of almost $40 billion, including $22 billion on its balance sheet, nearly $7 billion ‘off balance sheet’ and almost $11 billion for ‘project financings.'” (Robert J. Samuelson, “The all-too-human side of capitalism,” Washington Post As Appeared in The Star Ledger, 12/21/01)

Enron Used The Very Gimmicks Corzine Fought For To Overstate Company Profits By $591 Million From 1997-2000. “On Oct. 16, the company announced it would take a $1 billion charge to reflect losses in ‘broadband’ communication and water businesses, among others. It also announced another $1.2 billion loss on a transaction outside its balance sheet. On Nov. 8, the company said its profits from 1997 to 2000 had been overstated by $591 million.” (Robert J. Samuelson, “The all-too-human side of capitalism,” Washington Post As Appeared in The Star Ledger, 12/21/01)

When Enron Collapsed, New Jersey’s Public Employees Pension Fund Lost A Staggering $61 Million. “New Jersey’s public employees pension fund lost $61 million last year after Texas energy trader Enron Corp.’s stock plummeted from more than $80 a share to less than $1 a share in the largest bankruptcy in the largest bankruptcy in the nation’s history.” (Anthony S. Twyman, “Enron cost state fund for workers $61 million – But official assures pensions are secure,” Star Ledger, 01/22/02)

After Enron’s Collapse, Senator Corzine Ironically Presented Himself As A ‘Reformer,’ Writing Legislation To Protect Corporate America From Loopholes Like The Very Gimmick He Fought To Protect. “In the Senate, Jon Corzine has been recognized as a reformer.  In the wake of Enron and Worldcom, he wrote key provisions of the new laws that require honesty and transparency in corporate America.” (“Why Jon Corzine Is Different,” Corzine for Governor 2005)

Today, Jon Corzine Continues To Hurt The Public Employees Pension, Deferring $2.5 Billion In Pension Payments This Year Alone. (FY2010 Budget)

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www.ChristieforNJ.com
Paid for by Chris Christie for Governor, Inc    Ronald Gravino, Treasurer

CHRIS CHRISTIE … can be reached via email at press@christiefornj.com.
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One Response to “More proof that Corzine aided and abetted ENRON”

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