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To: KLP who wrote (49234)	2/17/2012 1:19:23 PM
From: Peter Dierks	Respond to of 71588

You have very neatly picked up some of the most important points. Obama owes much to Corzine. It is no small wonder that democrats don't like to discuss him.

To: KLP who wrote (49234)	2/17/2012 8:27:41 PM
From: Peter Dierks	1 Recommendation Respond to of 71588

Admin stops pretending it has long-term debt plan by Philip Klein Senior Editorial Writer February 16, 2012 Obama spent much of last year pretending that he had a plan to tackle the nation's long-term debt crisis. He never released an actual plan, but he gave a bunch of speeches pretending that he had. And Obama pushed the idea that he was privately ready to cut a "grand bargain" on the debt were he not thwarted by intransigent Republicans. This was a narrative dutifully reported by the media, despite the lack of any formal plan. Now, the pretending is over. On Monday, Obama unveiled a budget that added to the debt while using a series of budget gimmicks to claim deficit reduction. And today, Treasury Secretary Tim Geithner conceded that the administration didn't even attempt to do anything about the nation's long-term debt problem. Earlier today, he told the Senate Budget Committee that long-term spending would be "unsustainable" even if Obama's budget was fully adopted. Later, in a separate hearing, he explained to House Budget Committee chairman Rep. Paul Ryan, R-Wis., that the only intention of the Obama budget was to address deficits in the next decade, not to put the nation on a sustainable fiscal path. He also trashed Ryan's budget, which does actually solve the problem, for putting too much of a burden on seniors to pay for health care. “We’re not coming before you to say we have a definitive solution to that long-term problem," Geithner told Ryan. "What we do know is we don’t like yours.” There you have it. The administration has dropped any pretense. It's more comfortable attacking Ryan's plan than offering an alternate solution. Geithner tried to downplay the significance of the long-term problem, acting as if the nation can cross that bridge when it comes to it. But as Ryan pointed out, the Treasury Secretary, more than anybody, should recognize how problematic it would be for bond investors to lose faith in America's finances. If they stop buying U.S. bonds, a crisis can hit much sooner than a chart would suggest. Furthermore, virtually every budget expert recognizes that the longer the nation waits to do address its problems, the more drastic the possible solutions have to become. So, now that the administration itself has acknowledged it has no plan, it's time for the media to follow suit and stop blaming the lack of a debt plan on Republican unwillingness to agree to tax increases. Video of Geithner's exchange with Ryan below. youtube.com campaign2012.washingtonexaminer.com

To: KLP who wrote (49234)	3/4/2012 11:10:48 AM
From: greatplains_guy	1 Recommendation Respond to of 71588

Never mind tomorrow's kids, U.S. debt hurts today's adults by Deroy Murdock 03/02/2012 NEW YORK -- Fiscal conservatives unwittingly sabotage themselves by invoking “the children” when explaining the dangers of America’s ballooning national debt. They should spend lots more time discussing how federal red ink harms adults today. Tying debt reduction to parenting causes two problems: First, if America’s children will pay off the national debt, why sweat it now? Washington’s spendaholics will embrace any available excuse to keep federal spending grinding onward. If the debt will vex the kids, it clearly needs no attention for another decade, maybe two. So, until then, PARTY! Second, millions of American adults lack children. Some have not had them. Others don’t want them. While speeches about “the children” may play moms and dads like fiddles, they barely pluck the heart strings of the childless. Free marketeers, thus, should add a badly needed note of urgency to their overtures on the national debt. Current and previous federal borrowing hurts American adults -- and this entire economy -- right now, well before little Johnny and Sally turn 21, find jobs, and start signing the tab for Washington’s endless fiscal happy hour. For now, the good times are rolling. After the Bush-Rove Administration’s fiscal bacchanal, the gross national debt was $10.6 trillion when President Obama took office. Today, that figure is $15.4 trillion -- and climbing. It likely will crash through today’s $16.4 trillion debt ceiling in mid-October, weeks before the November election. According to the Congressional Budget Office, the debt will total $21.7 trillion in 2022. Servicing this debt will be a massive national enterprise. Net interest payments will soar from $224 billion to $624 billion in 2022 alone. Over the next 10 years, CBO projects that interest to bondholders will cost $4.25 trillion. This is nearly double the expected budget for ObamaCare! “This debt cloud over our economy is depressing growth right now,” said Alabama’s Jeff Sessions, the U.S. Senate Budget Committee’s top Republican. Sessions cites economists Carmen Reinhart of the University of Maryland and Kenneth Rogoff of Harvard. They determined that advanced nations with gross-debt-to-GDP ratios above 90 percent experience 1 to 2 percent lower median growth rates. Slower growth means fewer jobs, lower incomes, and grimmer people. America’s debt/GDP ratio equals 105 percent today, well within that danger zone. Obama’s budget keeps that figure above 102 percent through 2022. “The nation’s debt is leading to higher costs for businesses and American households to obtain long-term credit,” states a May 2011 report by Senator Sessions’ budget analysts. “Longer-term interest rates would be even lower today, and more stimulating of economic activity, if today’s deficit and government debt were lower.” Federal Reserve Chairman Ben Bernanke also sees the national debt menacing today’s adults. “Expectations of large and increasing deficits in the future could inhibit current household and business spending,” he said in October 2010, “for example, by reducing confidence in the longer-term prospects for the economy or by increasing uncertainty about future tax burdens and government spending — and thus restrain the recovery.” Washington will not get serious about any of this until Democrats grow up. President Obama’s deficit projections exceed $575 billion every year through 2022. Even after proposing a $1.9 trillion tax hike, he never comes close to balancing the budget. When House Budget Chairman Paul Ryan (R–Wis.) asked Treasury Secretary Timothy Geithner how he would cure this debt headache, Geithner sniffed: “We’re not coming before you to say we have a definitive solution to our long-term problem. What we do know is we don’t like yours.” House Republicans last year passed Ryan’s sober, debt-curbing budget. The Democratic Senate then sandbagged it. As for 2012, “We don’t need to bring a budget to the floor this year,” declared Senate Democratic Leader Harry Reid of Nevada. Why start now? In serial violation of the Congressional Budget Act, the Democratic Senate last passed a budget on April 29, 2009. Debt-weary Americans who worry about “the children” should start fretting about Washington’s infantile Democrats. -------------------------------------------------------------------------------- Mr. Murdock, a New York-based commentator to HUMAN EVENTS, is a columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. humanevents.com

To: KLP who wrote (49234)	3/19/2012 8:39:07 AM
From: Peter Dierks	1 Recommendation Respond to of 71588

Big Labor’s Big Bucks Mar 26, 2012, Vol. 17, No. 27 By MARK HEMINGWAY Last week, the New York Times reported that “labor leaders say they will mount their biggest campaign effort, with far more union members than ever before—at least 400,000, they say—knocking on voters’ doors to counter the well-endowed ‘super-PACs’ backing Republicans.” Prior to the Supreme Court’s Citizens United decision loosening campaign finance regulations, union members were allowed to knock only on the doors of other union members. Now they’re canvassing all voters. While many have decried Citizens United for unleashing a torrent of corporate money in elections, critics are oddly silent about the fact that it also gives union bosses even more freedom to spend. Of course, union manpower has always provided huge amounts of in-kind support for Democratic campaigns—unions claimed to have 250,000 door-knockers in 2008. Despite some restrictions on this kind of advocacy, unions regularly took advantage of their lack of enforcement. In any case, if you really care about the corrupting influence of money in politics, your beef is with union bosses. Since 1989, 12 of the top 20 donors to political campaigns have been unions. Unions spent over $400 million on elections in 2008, and nearly every penny went to Democrats. They spent over $200 million in 2010, and the single largest donor in that election was the American Federation of State, County, and Municipal Employees (AFSCME), which spent $87.5 million. AFSCME has already pledged $100 million for the upcoming election. As AFSCME is a public employee union, that means the largest funder of Democratic campaigns is you, the taxpayer. Once upon a time Democrats—and even the AFL-CIO’s former president John Sweeney—opposed this kind of public sector union campaigning on principle. If you don’t think that all this money is corrupting, you haven’t been paying attention to the Obama administration’s stimulus, health care, and bailout giveaways to unions. And what about the National Labor Relations Board trying to bar Boeing from building a factory in a right-to-work state? Recall that in April 2010, when Democrats still had control of Congress, they tried to pass the DISCLOSE Act. The bill would have instituted all kinds of restrictions and disclosure requirements for corporate political donations. But the legislation would have allowed unions to transfer unlimited funds among affiliated groups to pay for political ads with no disclosure whatsoever. Additionally, companies that received TARP money would have been banned from giving. GM couldn’t write checks, but the United Auto Worker beneficiaries of TARP funds could. DISCLOSE also would have curbed donations by employees at private companies receiving more than $10 million in government contracts. Public employee unions, however, would still be free to give generously. We were saved from this brazen act of hypocrisy only because Republicans had the necessary 41 votes in the Senate to prevent the DISCLOSE Act from passing. It’s worth remembering that unions no longer represent the interests of the American worker. The Bureau of Labor Statistics reported earlier this year that union membership has fallen to a 70-year low—11.8 percent of the workforce. Of that total, the majority are now public sector workers. And private sector union pension plans are $160 billion in debt, even as their union reps pour hundreds of millions into campaigns. In October 2010, when the Wall Street Journal first reported that AFSCME was America’s biggest political donor, that fact quickly became a standard talking point as voters headed to the polls to hand Democrats the worst party defeat since the end of World War II. If voters understand that union bosses are our most corrupt special interest and that Democrats are utterly beholden to them, it’s likely to be a winning issue for Republicans in 2012 as well. weeklystandard.com

To: KLP who wrote (49234)	4/23/2012 1:34:00 AM
From: greatplains_guy	1 Recommendation Respond to of 71588

The Great TARP Cover-Up Some folks want to pretend government intervention never happened. Nick Gillespie from the April 2012 issue Pity the Billionaire: The Hard Times Swindle and the Unlikely Comeback of the Right, by Thomas Frank, Metropolitan Books, 240 pages, $25 In one of his reportedly few sober moments, the legendary statesman and tippler Sen. Daniel Patrick Moynihan (D-N.Y.) is rumored to have said, “Everyone is entitled to his own opinion, but not his own facts.” Weirdly, the lack of definitive sourcing for that quotation only confirms its essential validity. But what happens when the facts seem so different to different people that there is virtually no common ground for conversation, much less resolution of basic differences? I thought a lot about that question—not to mention drinking—while reading Thomas Frank’s new book, Pity the Billionaire, which he describes as “a chronicle of a confused time, a period when Americans rose up against imaginary threats and rallied to economic theories they understood only in the gauziest of terms.” A University of Chicago–trained historian who co-founded the hip left-wing journal The Baffler and did a stint as the token liberal on The Wall Street Journal’s opinion pages, Frank has written a series of books about American culture and politics, most famously What’s the Matter With Kansas? (2004). He now occupies the “Easy Chair” column at Harper’s, a centuries-old seat of curmudgeonly, anti-capitalist editorializing once held by Lewis Lapham. To Frank, fears that debt-fueled spending and government intervention in the economy helped cause and perpetuate the financial crisis are plainly “imaginary.” He believes the economic “theories” America is currently embracing are hardcore austerity measures ripped from the playbook of Herbert Hoover, circa 1929. “The revival of the Right,” says Frank, “is as extraordinary as it would be if the public had demanded dozens of new nuclear plants in the days after the Three Mile Island disaster; if we had reacted to Watergate by making Richard Nixon a national hero.” Where to begin separating facts from opinions? For starters, it’s simply wrong to claim, as Frank does, that “the main political response to [the financial crisis of 2008] is a campaign to roll back regulation, to strip government employees of the right to collectively bargain, and to clamp down on federal spending.” Certainly the Tea Party, a handful of people in Congress (most of them with the last name Paul), and some policy wonks would welcome such moves. But far from being powerbrokers, these folks are little more than marginalized dreamers, as likely to be attacked by their allies as by their enemies. The toughest fight that Tea Party favorite Rand Paul had in becoming the junior senator from Kentucky in 2010 came not from his Democratic opponent but from Senate Minority Leader Mitch McConnell (R-Ky.), who did everything he could to keep Paul from gaining office. Lest we forget, the major response to the financial crisis in 2008 was the bailing out of Wall Street and the auto companies under a conservative Republican president and the implementation of an $840 billion stimulus plan promoted by a Democratic president. That’s not to mention a massive overhaul of the nation’s financial regulations and a health care reform package that was routinely described as “historic” and “transformational” at its passage. Ironically, such immediate, massive and—in the case of the stimulus—ineffective actions are in keeping with Herbert Hoover’s policies. That’s because, contrary to Frank’s claims, Hoover was never a fan of government austerity (at least while in office). According to Florida State University economist Randall G. Holcombe, Hoover increased federal expenditures in real terms by 88 percent between 1929 and 1933. Perhaps the major interventions of the last few years sneaked through under the wire because too many of us were traumatized by the collapse of Bear Stearns. But in fact, spending and regulations ballooned tremendously all through George W. Bush’s presidency—and still show no sign of slowing down. In constant 2010 dollars, the federal government spent about $2.3 trillion in 2001. By 2010 the total was around $3.6 trillion. And although the federal government has not passed (and will not pass) a budget for a third straight year, the two plans currently on the table envision spending either $4.7 trillion or $5.7 trillion in 2021. The lower figure comes from the budget that passed the GOP-controlled House last spring. The higher number comes from President Barack Obama’s budget proposal. If austerity is the new black, the news has yet to reach the people who actually wield power in the capital. And if the Washington elite aren’t serious about cutting spending, they sure aren’t hell-bent on cutting red tape and regulations either. For self-evident reasons, George W. Bush and the Republicans soft-pedaled the fact that over the course of his presidency he hired 90,000 net new regulators; signed the Sarbanes-Oxley bill, which radically complicated corporate accounting practices; passed a record number of “economically significant” regulations, costing the economy $100 million or more per year; and, according to economist (and reason columnist) Veronique de Rugy of George Mason University’s Mercatus Center, spent more money issuing and enforcing federal regulations than any previous chief executive. Obama is continuing the trend, increasing employment at regulatory agencies by more than 13 percent and issuing 75 major rules in his first two years. All this happened during what Frank calls “the golden years of libertarianism.” So I have difficulty understanding what he is talking about when he issues dicta such as “free-market theory has proven itself to be a philosophy of ruination and fraud.” Frank is surely correct that many anti-government types conveniently minimize the role that private-sector bad actors at banks, financial houses, and elsewhere played in causing the financial crisis. But he also never provides a compelling response to the argument (common among libertarians) that the root of the problem is implicit and explicit bailout guarantees that socialize the costs of irresponsible risk taking. When it comes to free markets, I feel like quoting Gandhi’s answer when asked how he felt about Western civilization: “I think it would be a good idea.” Pity the Billionaire suffers not just from a lack of engagement with what I consider reality. It dismisses out of hand those with whom the author disagrees. Members of the broadly defined right, says Frank, “blow off the facts when they feel like it; they swipe symbols from the other side.” I hear him, and I even have some sympathy when he cries in exasperation, “What kind of misapprehension permits the newest Right to brush off truths that everyone else can see so plainly?” We live in an era of “beer summits,” diplomatic “resets,” and a screwed-up economy in which inflated housing prices are not allowed to fall to the depressingly low levels they might actually be worth. In ways he surely didn’t intend, Frank’s Pity the Billionaire helps explain why so many of us seem to be talking past each other. Nick Gillespie, editor in chief of reason.tv and reason online, is the co-author, with Matt Welch, of The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America (PublicAffairs). A version of this article originally appeared in The Daily on January 7, 2012. reason.com

To: KLP who wrote (49234)	10/12/2012 10:35:16 AM
From: Peter Dierks	Respond to of 71588

Ghost of Al Gore will haunt smirking, interrupting Joe Biden as he fibs about what spies and generals told Obama administration 2 October 2012 6:44 AM Joe Biden came out swinging at Paul Ryan, flailing wildly and landing a few punches on his own jaw as well as his opponent's. He showed the kind of spirit and populist anger that President Barack Obama was so conspicuously lacking and has cheered up many demoralised Democrats. But Biden's performance here in Danville, Kentucky was both comical and self-defeating. Just as Al Gore sighed and rolled his eyes in 2000, so Biden smirked and guffawed. He gesticulated wildly and jabbed his finger. He interrupted Ryan and the moderator Martha Raddatz. Many women and swing voters will have hated it. Perhaps the even bigger problem the Obama campaign will have in the coming days is that Biden, again just like Gore in 2000, repeatedly exaggerated and mischaracterised for effect. And worse than Gore - who was caught in a series of small lies in 2000 - Biden was demonstrably untruthful in some big respects. Most seriously, Biden blamed the US intelligence community for the debacle and stated that no one had requested additional security. When asked by Raddatz why the White House had blamed the death of Ambassador Chris Stevens on protests about a movie, he responded: 'Because that was exactly what we were told by the intelligence community.' There is ample evidence that this was not the case. From tomorrow, expect a number of senior intelligence figures to come out and say that. The US intelligence community is not about to take the fall for what happened in Benghazi just so Obama can be re-elected. Even more startling was Biden's insistence: 'Well, we weren’t told they wanted more security there. We did not know they wanted more security again.' That is directly contradicted by testimony from two State Department officials this week. Eric Nordstrom, expressed frustration at how his appeals for more resources were rebuffed. Lt Col Andrew Wood, former head of a 16-member U.S. military team that helped protect the embassy in Tripoli, testified: 'We were fighting a losing battle. We couldn't even keep what we had. There were requests for extra security; those requests were not honoured.' On Afghanistan, Biden said that the Joint Chiefs had wanted to bring back the surge troops during this year's fighting season. 'There are people that are concerned, but not the Joint Chiefs,' Biden said. 'That was their recommendation in the Oval Office to the president of the United States of America. I sat there.' In fact, Admiral Mike Mullen, chairman of the Joint Chiefs, testified before Congress that he had recommended a less aggressive drawdown timetable. 'The President's decisions are more aggressive and incur more risk than I was originally prepared to accept,' he said. Failing to tell the truth about the professional advice and judgements of intelligence chiefs and generals is a perilous route for Biden to go down. There were smaller issues too. Biden said that Libya was five times larger than Syria. In fact, Libya is almost ten times bigger than Syria. So much for Biden's much-vaunted foreign policy expertise. At times, Ryan seemed a little cowed by Biden. Certainly, no one could blame him for being bemused by his antics. There were points at which Ryan could have held Biden to account and he didn't. He blinked too when he asked Biden whether he knew what the unemployment rate was in his native Scranton, Pennsylvania. Biden said he did but one sensed he was bluffing. Rather than wait for Biden to hang himself, Ryan told him it was 10 percent. But as the night wore on, it was clear that Biden was all about Biden (who, even though he will be 73 and has won precisely zero in two presidential runs in 1988 and 2008, harbours ambitions to run in 2016). Whereas Ryan advocated for Romney, Biden was blowing his own trumpet. Ryan made no mistakes and kept his cool. Conservatives wanted more full-throated arguments for their policies but Ryan was not about that tonight - his game plan was to be calm and reasonable and make the case that this election is a clear choice between bluster and excuses about the last four years and a plan to change things. Biden over-compensated for Obama's passivity last week in Denver. He need to achieve a decisive victory that would allow Obama to regain the momentum. In this respect, he failed - snap polls suggested a score draw between the two men. And by engaging in off-putting histrionics and displaying a cavalier attitude towards the truth, Biden was channelling Al Gore - in the debates against George W. Bush that put paid to Gore's lifelong ambition of winning the White House. harndenblog.dailymail.co.uk

To: KLP who wrote (49234)	6/27/2013 11:31:45 PM
From: greatplains_guy	Respond to of 71588

Former New Jersey Democrat Senator Corzine and O'Brien Charged in MF Global Collapse CFTC Alleges Unlawful Misuse of Customer Funds; MF Global Is Fined $100 Million Updated June 27, 2013, 7:28 p.m. ET. By SCOTT PATTERSON, AARON LUCCHETTIand JAMILA TRINDLE WASHINGTON—Federal regulators on Thursday filed civil charges against former MF Global Holdings Ltd. Chief Executive Jon S. Corzine and a top lieutenant for overseeing the misuse of almost $1 billion in customer funds, saying Mr. Corzine "bears responsibility" for the New York commodities brokerage's 2011 demise. The Commodity Futures Trading Commission's complaint cited conversations not previously disclosed purportedly showing Mr. Corzine played a more active role in the firm's activities than he had suggested in the past. The lawsuit, filed in U.S. District Court in Manhattan, comes as a new blow for Mr. Corzine, whose reputation—built on a career as a top executive at Goldman Sachs Group Inc., New Jersey governor and U.S. senator—has been tarnished in the past two years. Mr. Corzine, 66 years old, has been grilled by Congress in several high-profile hearings and is the focus of several civil lawsuits related to his oversight of the company. The agency also charged a former executive at the firm, Edith O'Brien, with misusing customer funds, saying she aided and abetted the violations. The agency is seeking monetary penalties from Mr. Corzine and Ms. O'Brien and to ban the two from ever again trading commodities on Wall Street. The CFTC's 47-page complaint depicts Mr. Corzine as instrumental in making decisions that put customer accounts at risk by allegedly moving money in violation of strict rules prohibiting such transfers. In addition to the firm's misuse of customer funds, the CFTC also charged Mr. Corzine with "failure to supervise diligently," a violation of CFTC rules requiring top officials at regulated firms to maintain strong oversight of a firm's operations and employees. "Mr. Corzine is being charged with being more than a passive actor in the downfall of MF Global," said CFTC enforcement chief David Meister in a Thursday conference call with reporters. Large trades pushed by Mr. Corzine "strained MF Global's liquidity and used up its cash," he said. Andy Levander, a lawyer for Mr. Corzine, called the CFTC lawsuit "unprecedented" and "based on meritless allegations." He said, "Mr. Corzine did nothing wrong, and we look forward to vindicating him in court." A lawyer for Ms. O'Brien, Christopher Barber, said in a statement that the CFTC case against his client was "meritless." The CFTC also fined MF Global Inc., the parent company's broker-dealer that handled the funds, $100 million—the agency's largest fine ever against a futures merchant. MF Global agreed to settle the complaint and admitted to the CFTC's allegations. The company would pay the penalty after customers and creditors receive 100% of their claims, the trustee for MF Global Inc. said Thursday. The complaint comes as the CFTC attempts to show a more muscular approach to policing customer funds amid criticism that it failed to spot red flags at MF Global and Peregrine Financial Group Inc., a futures broker whose founder stole millions in customer funds. It alleges about $1 billion in customer money was transferred from segregated accounts at MF Global to help prevent the company's financial collapse. The removal of customer funds was a blow to confidence in the banking industry just three years after the financial crisis required numerous banks to accept taxpayer money to stay afloat. The case also garnered attention since Mr. Corzine was viewed by some as a potential Treasury secretary. Among the CFTC complaint's allegations is that Mr. Corzine ignored warnings from his global treasurer, Vinay Mahajan, that the firm's liquidity situation was "grave." Mr. Corzine took steps to avoid tapping a line of credit that risked "giving the appearance that the firm needed to borrow money and therefore was in financial trouble," the complaint alleges. In October 2011, Mr. Corzine told the firm's treasury department they would "go negative" in customer accounts to avoid tapping that credit facility, in violation of firm policy, the complaint alleges. Wall Street firms commonly record phone conversations for record-keeping reasons. In a recorded conversation that month, Mr. Mahajan told other employees, in reference to Mr. Corzine's trading and the company's use of dwindling funds, that "we have to tell Jon that enough is enough. We need to take the keys away from him." The CFTC complaint alleges that Mr. Corzine "disparagingly nicknamed the global treasurer 'the Gravedigger.' " Mr. Mahajan wasn't charged with any wrongdoing. Gregory O'Connell, a lawyer for Mr. Mahajan, said his client "only worked for MF Global for 10 weeks and acted appropriately at all times." The case relies on numerous recordings of conversations that CFTC officials allege show Mr. Corzine was more than a "passive" actor in the customer fund violations. On Wednesday, Oct. 26, five days before MF Global's bankruptcy, Ms. O'Brien, the assistant treasurer for the firm's brokerage unit, told an employee on a recorded telephone line that the firm wouldn't be in compliance with customer-segregation rules because funds weren't being returned to customer accounts. Ms. O'Brien said it was "a total clusterf—. They have to move half a billion dollars out of [Bank of New York Mellon] to pay me back." The following day, the employee told Mr. Corzine on a recorded telephone line that some of the funds Ms. O'Brien had transferred from the unit representing futures customers' accounts to help satisfy MF Global's proprietary obligations hadn't been returned. According to the complaint, Mr. Corzine asked if she had received back enough money "to be in compliance," and the employee responded, "No, she['s] indicating she's net short $106 million." Mr. Corzine told the employee to "raise hell" with J.P. Morgan Chase & Co., MF Global's banker, to obtain funds to "cover up" the gap left. The CFTC alleges Mr. Corzine didn't receive assurances that the funds were returned. In congressional testimony, Mr. Corzine claimed he didn't know customer funds had been misused and that Ms. O'Brien assured him a separate transfer of customer money was proper. Mr. Corzine took over MF Global in March 2010 and quickly pushed the firm to place large, leveraged bets on European debt. In the summer of 2011, amid widespread economic turmoil in Europe, those bets looked increasingly risky, prompting concerns among regulators and ratings firms about the firm's stability. By October 2011, MF Global's finances had become increasingly stressed. In its final days, it dipped heavily into customer funds to help finance its trades, eventually using nearly $1 billion, regulators allege. In the process of moving cash, some customer funds were misplaced. Efforts to recover the funds have led customers with money in U.S. accounts to get about 89% of their money back, according to the MF Global Inc. trustee. They are expected to get more back in coming months, pending bankruptcy court approval. Proving an executive failed to supervise the firm or its employees is easier than proving fraud, lawyers say. The CFTC will have to show Mr. Corzine was directly involved in overseeing those who committed the violations, according to lawyers. The existence of phone calls between Mr. Corzine and others could help the CFTC make that case. Still, they cautioned the charges aren't a slam dunk. The case will hinge on Mr. Corzine's degree of involvement because he "can argue that he relied on others in overseeing the firm's operations," Peter Henning, a law professor at Wayne State University in Detroit, said in an email. Write to Scott Patterson at scott.patterson@wsj.com, Aaron Lucchetti at aaron.lucchetti@wsj.com and Jamila Trindle at jamila.trindle@dowjones.com online.wsj.com