Corzine, Abelow: Will They Testify on Capitol Hill?

The men who ran MF Global before its demise have yet to inform a U.S. House subcommittee about whether they will voluntarily agree to testify in upcoming hearings investigating the firm's demise, the FOX Business Network has learned.

Staffers for the House Financial Services Committee's subcommittee on Oversight and Investigations were working late Sunday afternoon in preparation for their Dec.15 hearing, but have yet to hear from representatives of former MF Global Chief Executive Jon Corzine and the firm's President Bradley Abelow about whether they will voluntarily agree to testify, people close to the subcommittee say.

The men have until 10 a.m. EDT Monday to respond, according to a letter the subcommittee sent requesting their public testimony. If they ultimately refuse, it will raise the political stakes for the subcommittee as it prepares for the hearing. Corzine, a long-time Democrat dating back to his days as chief executive at Goldman Sachs, is also a former New Jersey governor and major Wall Street supporter of President Obama. In April, Corzine held a high-profile, $35,800-a-plate fundraiser for the president and before MF Global's troubles, he was widely considered a possible successor to Treasury Secretary Tim Geithner if the president wins re-election in 2012. Abelow, also a former Goldman executive, was Corzine's chief of staff as governor.

The big question for the committee is whether it will go the additional step and subpoena Corzine and Abelow about the details of MF Global's demise. While the Republicans are in the majority and control the majority of the votes needed to compel testimony, Democrats on the committee are likely to put up a fierce fight in an effort to protect both Corzine and Abelow, according to people with direct of the subcommittee's deliberations.

The stakes are certainly big for Corzine and Abelow, and by extension President Obama. MF Global's implosion, including the whereabouts of as much as $1.2 billion of missing customer money, is a focus of numerous civil and criminal investigations. Investigators at the Commodity Futures Trading Commission, as well as the U.S. Attorney's office have also launched inquiries into disclosures made by MF Global to analysts and rating agency officials during its tumultuous final days. The subcommittee is also likely to look at these issues.

For these reasons, white-collar defense attorneys say they think if Corzine and Abelow do testify they will almost certainly plead their Fifth Amendment right against self incrimination in order to avoid at the very least a "perjury trap," a situation where prosecutors are unable to mount a case on the crime under investigation, but use inconsistencies in testimony to bring other charges.

But the media frenzy surrounding a high profile Wall Street Democrat taking the Fifth could have political implications for the president who accepted $5,000 from Corzine individually, and $500,000 in contributions based on Corzine's fundraising efforts.

Attorneys for Corzine and Abelow didn't return a call for comment; a spokeswoman for the subcommittee declined comment.

MF Global, once a staid commodities broker, began to take big bets in the global markets after Corzine's appointment as CEO in 2010. Disclosures about MF Global buying sovereign debt tied to troubled European countries Italy and Spain, caused a sharp drop in MF Global's shares, and lenders pulling lines of credit. In the end, MF Global filed for bankruptcy protection, and since then it has been the target of regulatory and criminal probes including the disappearance of customer money.

People close to the subcommittee say the exact agenda for the hearing hasn't been set, and it's still unclear whether it will compel testimony from Corzine and Abelow through a subpoena. But as of now, the committee will look at "all aspects of MF Global's failures, specifically as it relates to Corzine and Abelow" including the still unaccounted for customer money, according to a person familiar with the matter.

But the broad inquiry will also focus on MF Global's dealings with regulators and rating agencies prior to its demise and possible meetings between senior executives at MF Global, including Corzine and regulators at the CME Group, the futures exchange which also serves as a regulator of firms in the futures market, and credit rating agencies.

The discussions between credit raters and MF Global officials could be key because major rating agencies didn't begin to downgrade the firm until just before its bankruptcy. One major credit rating agency, Standard & Poor's downgraded the firm to "junk" only after its bankruptcy filing.