DeCROCE SAYS CORZINE MUST EXPLAIN WHY NJ KEPT THE MONEY SPIGOT OPEN

STOCK PURCHASE WASN’T THE ONLY HELPING HAND OFFERED BY THE CORZINE ADMINISTRATION


Assembly Republican Leader Alex DeCroce today called on Gov. Corzine to explain why New Jersey ignored the worsening financial condition of Lehman Brothers and continued to offer the investment firm more and more financial aid and profit opportunities at taxpayer expense.

“All Jon Corzine had to do to realize Lehman Brothers was on shaky ground was pick up the Wall Street Journal,” said DeCroce, R-Morris and Passaic. “Warning signs were evident for months and months.

“Yet in the past year, the Corzine administration not only used state pension funds to purchase nearly $178 million in Lehman stock, reportedly losing more than half the money it invested, the state offered the firm other financial opportunities as well. It entered into an agreement with Lehman Brothers to create a new directed investment fund with a $105 million commitment from both partners. And it offered Lehman Brothers nearly $20 million in incentives to move some of its employees to Jersey City.

“What in the world was he thinking?” asked DeCroce. “Lehman Brothers was in such a precarious financial position not even South Korea and Dubai would come to its rescue. But apparently screaming headlines about Lehman’s troubles and the dangers any investor in the floundering firm obviously risked didn’t bother New Jersey’s own Wall Street ‘wizard.’

“Now we have workers who are counting on their government pension checks to survive shaking their heads in disbelief and an even bigger state budget crisis. “Amazingly, Corzine told a national television audience on CNBC yesterday that investment banks with ‘bad earnings’ should be a source of concern.’ Then he owes the public an explanation why he wasn’t concerned about offering a tanking investment bank more than $200 million of their money.”

DeCroce said the explanation offered yesterday by State Treasurer David Rousseau was totally unacceptable.

“You can’t brush this debacle aside by saying, in effect, ‘Don’t worry. We owned only a small part of Lehman Brothers. It could have been worse.’ Maybe a couple of hundred million dollars is not a lot of money to Jon Corzine, but it is to middle class families who are struggling to make ends meet.”

DeCroce said he agreed with The Star-Ledger, which called the Lehman Brothers investment “foolish.” In its editorial today, the state’s largest newspaper said “the rationale for making a buy should be solid. This wasn’t the case.”