Who is Jon Corzine: Why work in financial services? Jon Corzine reached the pinnacle of his Wall Street career at the age of 47, when he became CEO of Goldman Sachs. When he was forced out just five years later, he turned to politics. In two of the most expensive campaigns in U.S. political history below the Presidential level, he used over $100 million of his own funds to gain election first to the U.S. Senate, then to the governorship of New Jersey.
Biography: Jon Corzine was born in 1947 and grew up on a small farm in central Illinois. After graduating from the University of Illinois in 1969 and earning an MBA from the University of Chicago in 1973, he moved to Columbus, Ohio to work in banking.
In 1975, Corzine moved to New Jersey, having taken a job as a securities trader at Goldman Sachs in New York. In 1980 he became a partner at Goldman, one of the most prestigious and lucrative achievements in the financial services industry. Rising rapidly through the ranks, he became chairman and CEO in 1994.
As CEO, Jon Corzine engineered the transformation of Goldman Sachs from a private partnership to a public company. The initial public offering (IPO) of Goldman stock created a huge windfall for the partners, including Corzine. Indeed, Jon Corzine's current personal wealth is estimated in the range of $600 million.
However, Corzine was not universally popular as CEO, and was forced out in 1999. Then he turned his attention to politics. He had been a supporter of the Democratic Party, and had chaired a commission on capital budgeting in the federal government in 1997, under President Bill Clinton.
In 2000, Jon Corzine won election as a U.S. Senator from New Jersey. Reportedly bored and frustrated with Senate procedure, especially as a freshman in a body where seniority counts heavily, Corzine ran for governor of New Jersey in 2005, while still in his first Senate term.
Corzine ran for governor when New Jersey was in the midst of a fiscal crisis, with looming deficits despite years of accelerating tax increases. He campaigned as the candidate who would use his financial expertise to bring sound fiscal management practices to a state sorely in need of them.
Jon Corzine had a difficult term as governor. Many of his proposals for the fiscal crisis, such as leasing toll roads to private operators for one-time infusions of cash, or forcing mergers of small municipalities to consolidate local bureaucracies and services, met with widespread opposition and failed. He had difficulties working with the state legislature, despite both its houses being controlled by his own party. Indeed, his first year in office, 2006, was noteworthy for a six-day government shutdown precipitated by the inability of the legislature and Corzine to agree on a budget in a timely fashion. During Corzine's term, taxes continued to rise in a state that already had one of the highest tax burdens in the nation.
He suffered a major public relations disaster with a car crash in 2007 that nearly killed him. Corzine's motorcade was doing over 90 MPH in a 65 MPH zone on the Garden State Parkway, and Corzine was not wearing a seatbelt. Instead of receiving sympathy, Corzine was pilloried as a scofflaw contributing to two other affordability crises in New Jersey, the highest auto insurance and medical insurance premiums in the nation. Subsequent reports of speeding by his motorcades compound the image problem. Also, flaps over ethical lapses within his adminstration, both by subordinates and by himself, diminished public confidence in him as a reformer.
Defeat in 2009: Despite spending over $30 million of his own funds in a reelection bid, versus about $8 million by his successful Republican challenger, Chris Christie, Corzine was defeated in a three-way race. By most accounts, Corzine has spent over $120 million of his own fortune in his three campaigns, one for the U.S. Senate and two for governor.
Lessons: Jon Corzine rose rapidly, becoming chairman and CEO of a leading Wall Street firm at a relatively young age. His career is a noteworthy example of how, in the financial services industry, seniority generally plays a minor role in advancement. Meanwhile, his swift fall from the top illustrates the sometimes brutal internal politics of major firms. He was ousted by former allies, when they found it in their interest to push him aside.
Jon Corzine's experience as governor indicates that executive skills in industry do not guarantee success as an executive in government. For one, the ability to make orders stick, let alone to have them carried out quickly, is much more limited in government. For another, winning over millions of voters is an entirely different challenge than advancing a business career by cultivating a few key individuals as allies. Additionally, the holder of high political office has much less privacy and freedom in his personal life than a business executive.
Corzine rose to the top of Goldman Sachs while it was still a genuine partnership, indicating an ability to forge alliances with a limited number of key people to get ahead. However, his swift fall from power, even after putting huge sums into his colleagues' pockets through the conversion to a public company, possibly indicates some failure of leadership on his part.
Additionally, Jon Corzine thrived in the frenetic environment of Wall Street, where things got done quickly, where high achievers like himself advanced rapidly, and where laggards were summarily fired. The often glacial ways of legislatures and government bureaucracies present a stark contrast. Before his first term was over, Corzine apparently had lost patience with the protracted debate that marks the U.S. Senate. As governor, he was repeatedly frustrated in dealing with the legislature, which refuses to move at anything like his own speed. Furthermore, he was unable to build much popular support either for his program or for himself as a leader.
In sum, while Jon Corzine used his vast fortune to buy name recognition and to win election to high office, he lacked the personal skills necessary to succeed in this new arena. Business acumen and personal energy were not enough.
