MF Global's campaign fallout

It will not be easy for President Obama to distance himself from his close political ally, former New Jersey Democratic Governor Jon Corzine, and Corzine's MF Global bankruptcy, and there is plenty of photo evidence of that to go around.

Mr. Corzine is now said to have hired a "leading white-collar criminal defense lawyer," amid SEC and FBI investigations.  There are allegations of missing customer funds and "disguised" debt levels over the past two years.   And a shareholder suit has been filed against Corzine and three other executives, as Reuters reports:

The complaint filed Thursday ... accused the executives of having "continuously touted" MF Global's financial controls and liquidity, despite knowing their statements were false and misleading at the time they were made.

Mr. Corzine's leading role in the demise of MF Global leads right into the Obama reelection campaign. 

While the President campaigns against so-called Wall Street greed, lending a wink and a nod to the Occupy crowd, the legal spotlight now falls on one of his own Wall Street money bundlers, or perhaps bunglers, as the Washington Post reports:

The bankrupt financial company MF Global, now under federal investigation for possibly misusing clients' money, is one of the top sources of contributions for President Obama's reelection, complicating the campaign's effort to turn public anger at Wall Street into a political advantage.

Employees of the company have given $108,650 to Obama's campaign and the Democratic National Committee, according to federal records. MF Global's chairman and chief executive, former New Jersey governor Jon Corzine has raised at least $500,000 for the campaign and the DNC as a "bundler," or volunteer fundraiser.

The President hopes to ride a wave of class-war rhetoric and Occupy agitation against Wall Street into a second term, hoping the mass media will overlook the "death to capitalism" aspect of the Occupy protests, but he now has another complication with that strategy, as the Post points out:

Obama held his first New York fundraiser for the reelection campaign at Corzine's home on Fifth Avenue in Manhattan, overlooking Central Park. Guests gave the maximum $35,800 donation to Obama and the DNC.

Mr. Corzine owed the President for Obama's two trips to New Jersey to pump up then-governor Corzine's 2009 reelection campaign, in the vain hope that the Obama "magic" might rub off on the Corzine campaign. 

Time magazine at the time characterized the Obama pitch as an effort to recast Corzine into "a reformist crusader who will heal the state's corruption woes." 

A reformist crusader who has now retained a criminal defense attorney.

The Obama campaign has said it will return Mr. Corzine's $5,000 cash donation if charges are filed against Corzine, but the Republican Party insists that the entire $500,000 bundled by Corzine be returned.

How quickly Mr. Corzine is tossed under the Obama campaign bus remains to be seen, but the MF Global bankruptcy is yet another bad optic for the Obama reelection campaign.