The crony government of crooks and losers

MF Global chief missing $1.2B is financial adviser to EPA

During two days of recent congressional hearings into how as much as $1.2 billion disappeared fromMF Global customer accounts, the chief operating officer of the imploding investment firm responded again and again that he did not know.

Yet as the House and Senate interrogated Bradley I. Abelow and other top executives at MF Global Holdings Ltd., lawmakers did not mention Mr. Abelow’s role as a financial adviser for theEnvironmental Protection Agency, which as of Tuesday listed him as the chairman of its financial advisory board.

Even as he finds himself the public face of a bankruptcy and admitted to lawmakers that he had no idea how client funds disappeared, Congressand the administration have voiced no public concern about Mr. Abelow’s role advising the $8.6 billion government agency on its finances.

“EPA relying on Wall Street for financial guidance is like the blind leading the blind,” said Jeff Ruch, president of Public Employees forEnvironmental Responsibility, a nonprofit environmental advocacy groupbased in Washington.

“In Abelow, you have a Wall Street executive who just presided over the disappearance of $1 billion in investor funds purporting to help guide federal infrastructure financing.”

The EPA did not respond to multiple messages concerning Mr. Abelow’s status with the board, though the EPA’s website still reports that he is its chairman and notes his job at MF Global.

When first questioned about Mr. Abelow’s ties to the EPA in early November, just after MF Global declared bankruptcy, EPA officials issued a short statement saying only that he was appointed as chairman of the board on March 10, 2010, and that he is not paid for his position.

Officials declined to say whether they were reviewing his continued service for the board.

An MF Global spokeswoman told The Washington Times shortly after the bankruptcy filing that Mr. Abelow was reviewing all of his outside commitments and obligations.

The EPA’s financial advisory board was chartered in 1989 to “provide advice and analysis to EPA’s administrator on paying for the growing costs of environmental protection,” according to the EPA’s website. Theagency says members include “prominent experts from all levels of government, including elected officials, the finance and banking communities, business and industry and national organizations.”

It’s unclear how Mr. Abelow landed the chairmanship of the EPA financial panel, a position he noted in his biography on the MF Global website, which has since been removed.

He has ties to EPA Administrator Lisa Jackson through former New Jersey Gov. Jon Corzine. Each served at different times as the governor’s chief of staff. When Mr. Corzine lost his bid for re-election and later joinedMF Global, Mr. Abelow followed.

During his testimony to the House, Mr. Abelow said his total compensation at MF Global was a guaranteed $3 million. He joined the firm in September 2010 as chief operating officer, then was named president in March.

At appearances before House and Senate committees, Mr. Abelowexpressed sorrow for the company’s more than 2,500 employees who are facing unemployment and investors who have been unable to recoup their funds.

“As the president and chief operating officer of MF Global, I am deeply sorry for the hardship they have all endured,” Mr. Abelow told the Senate Committee on Agriculture, Nutrition and Forestry on Dec. 13.

“While I know that nothing I say can ease their pain, I hope that through my testimony today, I can help this committee understand what happened at MF Global and how we are attempting to unwind the company in a manner that provides maximum value for all parties.”

He was asked repeatedly, along with Mr. Corzine, what happened to missing customer funds. More than a dozen times in response to lawmakers’ questions, he said he did not know, could not recall or wasn’t aware of various details.

“We’re looking at the top people of the company who are responsible for the overall internal controls of this company and so, Mr. Abelow, where’s the money?” Sen. Debbie Stabenow, Michigan Democrat, asked in one such exchange.

“Senator, as I said in my statement, I do not know where the money is,” Mr. Abelow replied.

Asked by Rep. Michael E. Capuano, Massachusetts Democrat, the identity of the company’s biggest creditor 10 days before MF Global’s bankruptcy, Mr. Abelow replied, “I apologize; I simply don’t know.”

Mr. Abelow’s role at the EPA never surfaced during his testimony before either of the congressional committees this month.

MF Global declared bankruptcy Oct. 31 after telling regulators that the company had about $6.3 billion in debt from Ireland, Italy, Spain and other European countries and after credit-ratings services downgraded the company’s status to “junk,” the company said in court records.

Bankruptcy filings describe Mr. Abelow’s role at the company as overseeing day-to-day execution of company strategy and holding “direct responsibility for risk, operations, client services,” among other corporate activities.