A congressional panel has voted to subpoena former Sen. Jon Corzine to testify next Thursday about his role leading MF Global, a brokerage firm that collapsed this fall after a disastrous bet on European debt.
The hearing will be a rare moment in Washington. Congressional historians had to reach back to 1908, when a former senator from North Carolina was called to testify in connection with a corporate lobbying scandal, to find a similar instance of an ex-member of Congress being summoned by his former peers.
The House Agriculture Committee voted Friday to issue the subpoena after Corzine failed to reply to an informal request to appear at the hearing.
Chairman Rep. Frank Lucas, R-Okla., said his testimony is "essential to fulfill our objectives."
Hours later the head of the Senate Agriculture Committee called for subpoenas to be issued to Corzine and other MF Global executives to appear Dec. 13 before that panel, if they don't come voluntarily.
Sen. Debbie Stabenow, D-Mich., said she plans to convene a meeting of committee members Tuesday to vote on the subpoenas. And a third panel, the House Financial Services oversight subcommittee, announced plans to vote Wednesday on a subpoena for Corzine to appear at its Dec. 15 hearing.
"MF Global's customers, including many farmers and small business owners, trusted this firm to make purchases on their behalf, and now their money is missing," Stabenow said. "A matter of this magnitude requires a thorough investigation."
A spokesman for Corzine declined to comment.
MF Global filed for bankruptcy protection on Oct. 31. Corzine resigned as chairman and CEO a few days later. In just a week, stock investors lost an estimated $585 million.
At the Senate Agriculture Committee hearing, Corzine could face tough questions from former Senate colleagues.
Corzine, a Democrat, represented New Jersey in the U.S. Senate from 2001 to 2005. For two of those years, he led the committee that raised campaign money for Democrats seeking election to the Senate. He later served one term as New Jersey's governor before moving on to lead MF Global. He was also CEO of Goldman Sachs from 1994 to 1999.
Corzine has few good options now that the House Agriculture Committee has voted to subpoena Corzine and the other two panels are poised to do so. By law, anyone who is subpoenaed by a congressional committee must appear before it. If they don't, they could be held in contempt of Congress and go to prison.
Corzine could refuse at the hearing to answer their questions, invoking his Fifth Amendment right against self-incrimination. That could diminish his credibility.
Still, if he cooperates with lawmakers, he could provide information that might come back to hurt him in criminal and civil investigations.
Corzine "is being whipsawed between the congressional subpoena and the looming criminal investigation," said Robert Mintz, a former federal prosecutor in New Jersey who heads the white-collar defense practice at McCarter & English in Newark.
"It's a unique situation that Jon's in," said Abbe Lowell, a defense attorney who was counsel to the House of Representatives and whose clients have included former Sen. John Edwards and former Nevada Gov. Jim Gibbons.
Regulators are looking into whether MF Global used money from customers' accounts for its own purposes as its financial condition worsened. That would violate securities rules. The FBI is investigating whether the firm violated any criminal laws.
An estimated $1.2 billion or more may be missing from customer accounts. Regulators say MF Global moved money out of customer accounts within days as the firm's cash dried up.
MF Global was one of the biggest players in the derivatives market. Derivatives are investments that are based on the value of an underlying asset, such as interest rates or oil prices.
No one at MF Global has been charged with a crime or civil violation.