By Jim McElhatton- The Washington Times
During two days of
recent congressional hearings into how as much as $1.2 billion disappeared from
MF 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 the Environmental 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,
Congress and 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 for
Environmental Responsibility, a nonprofit environmental advocacy group based 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. The agency
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 joined
MF 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.
Abelow expressed 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.