"Email Ties Corzine to Missing Funds," says The Wall Street Journal. Except the email does nothing of the sort. A parable on how "smoking guns" are fabricated.
You can always tell when a report about a government investigation is drafted to promote a false media narrative. Invariably, the report highlights a direct quote that is no more than a fragment of a sentence*, one that excludes any reference to the elements of traditional journalism: Who, what, when, where, why or how.
Case in point: the phase, "Per JC's [Jon Corzine's] direct instructions," lifted from a contemporaneous email sent by the treasurer of MF Global a few days before the company collapsed. The cryptic phrase was inserted into a memo prepared by House Finance Committee staffers, which was leaked to the press in order to promote a false narrative about smoking gun evidence.
If you read Bloomberg, or the Wall Street Journal or the AP, you would come away with the impression that Corzine directed the treasurer to cover the overdraft at a company bank account by withdrawing funds owned by a customer held in a segregated customer trading account. That withdrawal would be a big deal, and illegal.
But the report presents no facts to support that impression. The New York Times, which reviewed the treasurer's email, not just the interpretation by House staffers, pointed out that Corzine directed the treasurer to cover the overdraft, but the email shows nothing to suggest that he told the treasurer to cover the overdraft by withdrawing funds from a customer account.
Similarly, the House memo does indicate that the funds were transferred from a customer account, but it never states that Corzine gave instructions to transfer funds from that particular account. In fact, the memo inserts a footnote, on page 3 of the memo, to highlight the point that the transfer may have involved funds owned by the company. It states:
Futures commission merchants and broker-dealers are permitted to, and in the ordinary course of business do, deposit funds in excess of segregation requirements in segregated accounts. These excess funds belong to the firm, and may be transferred out of the segregated accounts.
In other words, the treasurer's email, like most company emails, was, on a standalone basis, ambiguous to the point of being meaningless.
Presented with hard evidence nullifying any interpretation of the "smoking gun," evidence potentially absolving Corzine, these reporters simply omitted the facts that thwarted their scandal narrative. Kudos to the Times for scrutinizing the documents more carefully.
Finally, the foregoing should not be used to suggest any kind of absolution of Jon Corzine. One of the most salient features of many corporations is that those at the top know how to avoid leaving fingerprints. Hank Paulson, Rumsfeld and Dick Cheney never used email. But reporters should not embellish the facts to support a hunch.
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*Other examples of fragmentary quotes used to promote false media narratives:
1. Valerie Plame, wife of Ambassador Joe Wilson, "offered up his name," to go to Niger, but at whose prompting, and under what circumstances? This excerpt was used by Republicans to impugn the credibility of Plame and Wilson.
2. Barney Frank told Maxine Waters to "stay out of it," stay out of what? In what context did he mean that? The report was unclear as to whether the authors were directly quoting Frank, or were paraphrasing him. This excerpt was used to impugn Waters.
3. Remember when George Tenet's claim, "It's a slam dunk," was quoted by Bob Woodward, who never asked Tenet if the phrase was quoted in context.