Last week, Jon Corzine testified before Congress that he had no idea that the company he ran into the ground, MF Global, had borrowed money from customer accounts. Corzine might end up wishing that he’d just taken the Fifth instead. A witness directly contradicted his claim in Senate testimony yesterday, saying that Corzine not only knew about the raids on customer accounts, he ordered at least one of them himself:

The head of the private exchange tasked with overseeing MF Global said Tuesday that Jon Corzine may have been aware of a transfer of client funds from the firm he formerly led, possibly contradicting the former governor and senator’s statements under oath that he had no knowledge of the events that resulted in the disappearance of $1.2 billion in customer funds. In a hearing before the Senate Committee on Agriculture, Nutrition and Forestry, Terrence A. Duffy, the chief executive of CME Group, said a senior female executive of MF Global told a CME auditor that Corzine — the former chief executive officer and chairman of the firm — was aware of a $175 million loan of customer money to a European affiliate of the now-bankrupt commodities brokerage. “Mr. Corzine was aware because our employee had heard this, on the phone—‘Send back 175’ — and said he was aware of this loan,” Duffy told the Senate committee. … Duffy didn’t elaborate on the exact nature of the $175 million loan that Corzine had allegedly known of, or whether that specific loan was among those that were illegal and improper. Futures firms are required to segregate customer money from the firm’s own funds, though there are circumstances under which moving customer money is permitted, provided there is sufficient collateral. “The only thing I can tell you [is] that MF Global transferred customer money to its broker dealer, and that Mr. Corzine was aware of the loans being made from segregated accounts,” he said. When asked for elaboration, a CME spokesman said the firm would not comment beyond the remarks Duffy made at the hearing.

If that testimony holds up, Corzine has just set himself up for a perjury charge on top of his other woes. That is a materially false statement of a kind that demands perjury prosecution; the entire point of the hearing was to determine how customers lost $1.2 billion in the collapse. Giving knowingly-false testimony under oath to Congress could add several years to whatever sentence Corzine eventually gets.

Zero Hedge caught this yesterday:

Following another boring day of hemming and hewing, during which Corzine repeatedly exhibited unbearable amnesia and said he had no knowledge of virtually anything until Sunday night, here comes the CME Executive Chairman Terry Duffy, under oath, with what Roberts said “is a bomb” statement which basically says that Corzine lied under oath. Specifically, according to Duffy’s remarks during the Q&A, an MF Global employee, a woman, advised the CME that Corzine had been aware of a $175 million loan made to Euro affiliates just days prior to the bankruptcy: a loan which effectively was that of commingled customer accounts, and more importantly a refutation of previous statement under oath by the man who was “financial advisor” to none other than the vice president of the United States who said he did not know about this until late on Sunday. This was not in his prepared testimony.

This is why defense attorneys try to get their clients to take the Fifth in any hearing that comes before prosecutions. It’s too easy to get tripped up by hostile questioners even if one isn’t intending to offer false and/or misleading testimony. Taking the Fifth looks bad politically, but at the point where a client is facing a big SEC investigation, Congress is holding hearings, and over a billion dollars has gone missing, a competent defense attorney — or even one just out of law school — knows that the client’s political life is over anyway.

If confirmed, will this change the media coverage of Corzine and the MF Global scandal? Two of the three broadcast networks have avoided even mentioning that the former New Jersey governor and US Senator is a Democrat, and no one else is bothering to mention that Corzine was one of Obama’s biggest bundlers in this cycle, as well as Obama’s liaison to Wall Street for ginning up big bucks for the re-election campaign. I seem to recall the media getting into a lather over Ken Lay’s much less concrete connections to George W. Bush after Enron’s collapse.