MF Global steals $1.6 billion, much of it from farmers • Incredible rich/poor gap in college graduation rates • VFDs are charging yearly fees as public support declines
A good portion of the $1.6 billion that went missing during the last days of MF Global came from farmers. They had accounts with the company, buying and selling futures to hedge the bets on their crops.
(Remember, MF Global was led by former Democratic Sen. Jon Corzine of New Jersey.)
During the last days of the company, somebody at MF took this money — money held in individual accounts — and used it to cover MF losses. That money is gone and, according to New York Times columnist Joe Nocera, “there is virtually no chance that the full amount will ever be recovered.”
Now, Nocera, writes, it looks like nobody will be prosecuted. More than $1.6 billion was taken and nobody will be charged. Nocera:
Let’s not mince words here. These executives committed a crime. Virtually every knowing violation of the Commodities Exchange Act is a crime, but taking money from segregated customer accounts is at the top of the list. And for good reason. Customer money is supposed to be sacrosanct. If a broker-dealer goes bankrupt, the segregated accounts are supposed to remain safe, a little like the way bank deposits remain protected if a bank goes under. Indeed, customers need to be able to trust the fact that their money is segregated and protected at all times. Otherwise, the markets can’t function.
Yet, a few weeks ago, Azam Ahmed and Ben Protess, who have done a remarkable job covering the MF Global bankruptcy for The Times, wrote an article suggesting that prosecutors were having trouble putting together a criminal case against anyone at MF Global. So far, wrote Ahmed and Protess, they’d been “unable to find a smoking gun.” In fact, they continued, “a number of federal prosecutors have expressed doubts” that MF Global “intentionally misused customer money.” Apparently, the current theory is that it was all just a big accident, the chaos of those final days causing the firm’s executives to tap into customer funds without realizing it.
• The Wall Street Journal reports that some volunteer fire departments are asking residents to pay voluntary, annual subscriber fees. The fees range from $60 to $150. Timothy Martin reports:
A growing number of volunteer fire departments, most of them in the rural South, are asking residents to pay an additional fee for firefighting service, though not for such things as responses to medical emergencies, which make up most fire-department calls. This throwback to a centuries-old practice comes as public budgets get slashed and local donations dry up.
• The U.S. Senate may vote today on whether it will continue a long-standing program that compensates rural counties and schools for the declining timber revenue from public lands.
• Two years ago this Thursday, the U.S. Departments of Justice and Agriculture held the first in a series of workshops on the impact of business concentration in the ag business on rural communities and farmers.
The thought, two years ago, was that the DOJ would gather evidence and then move to break up the monopolies that are taking over a good portion of rural life. Two years later, nothing has happened.
Food and Water Watch will mark the day with an event in Washington, D.C. They will have farmers and ranchers who participated in the hearings (there were about a half dozen) talk about what happened and what didn’t. Reporters who want to dial in to the event should contact Anna Ghosh at aghosh(AT)fwwatch(DOT)org.
• Colorado’s Pueblo Chieftain notes that Sen. Mark Udall has gotten a pledge from the current Secretary of the Army that he will not expand the Pinon Canyon Maneuver Site in the southeastern part of the state. The buzzing planes have driven residents in the region crazy. And ranchers are afraid the Army will condemn their land to expand the maneuver site.
Here is what the paper’s editorial page has to say:
Now, we do fully appreciate Sen. Udall’s efforts here. And we believe him when he says that, as long as he’s a U.S. senator, the Army will never get congressional approval for expansion.
But it would be helpful, as former Sen. Tim Wirth suggested last October, that the Pentagon “shut down once and for all the plans for Pinon Canyon expansion and broader uses. The budget demands, requirements to replace and upgrade equipment, and need to tend to the military’s infrastructure, all argue that the Pentagon should stop new expansion efforts.”
We call on the Pentagon to make just such a statement. And we urge Colorado’s congressional delegation to seek legislation banning expansion at Pinon Canyon.
The ranches surrounding the maneuver site are vital to the nation’s food supply. Those families who have dedicated their lives to the land deserve the assurance that they can continue to provide food for our nation.
• Minnesota Public Radio reports that an “arts economy” is rising on the southwest prairie as artists are being attracted to the low costs found in small towns. MPR reports:
Rural areas rely heavily on the self-employed, and arts-related endeavors are becoming a larger and increasingly legitimized part of the picture. The movement toward arts-based economic growth, sometimes called “creative placemaking,” seeks to revitalize and re-imagine cities or neighborhoods searching for a new way forward.
• Thomas Edsall reports in the New York Times of this incredible gap in college-going (and completion) between rich and poor. Edsall finds that college completion rates are not related to test scores as much as family wealth.
Contrary to those who say that this is the meritocracy at work, differences in scores on standardized tests do not fully explain class disparity in educational outcomes. When high-scoring students from low-income families are compared to similarly high-scoring students from upper-income families, 80 percent of the those in the top quarter of the income distribution go on to get college degrees, compared to just 44 percent of those in the bottom quarter.