GOP accuses Corzine of profiting from Enron His campaign said his business with the firm had ended years before it collapsed in a major scandal.

Posted: September 14, 2005

When U.S. Sen. Jon S. Corzine, the Democratic nominee for governor, headed Goldman Sachs, the financial firm came up with a Wall Street gimmick that allowed the Enron Corp. to get tax breaks, two supporters of Republican candidate Douglas Forrester said yesterday.

State Sen. Diane Allen (R., Burlington) and Assemblyman Kevin O'Toole (R., Bergen) said that when Enron collapsed, the state pension fund lost $61 million on Enron investments.

"Corzine profited while the people of New Jersey paid," Allen said.

Corzine's campaign immediately shot back, with deputy press secretary M. Allyn Brooks-LaSure saying: "As usual, the Republicans have their facts wrong."

Yesterday's attack was the latest in a series of efforts by both campaigns to muddy the other's image with New Jersey voters.

Brooks-LaSure said Goldman's financial product - known as MIPS, or monthly income preferred shares - were not the source of Enron's failure. Enron's secret partnerships and hidden losses were the problem, he said.

He added that the GOP's timeline was wrong. Goldman sold MIPS to Enron in the early 1990s but lost the business to another investment banker by 1994. The problematic Enron partnerships exploded in the late 1990s, well after Enron stopped buying MIPS from Goldman, he said.

The MIPS allowed Enron to create partnerships that could issue debt and raise money free of certain taxes.

Corzine, as Goldman's chief executive officer, did lobby the Clinton administration and Congress to keep the tax breaks, O'Toole said.

Corzine's campaign said those tax breaks had been widely publicized and well-known to the Securities and Exchange Commission.

Brooks-LaSure added that one of Corzine's first acts as a senator was to "author one of the toughest reforms on corporate accountability and accounting in the nation's history."

Contact staff writer Cynthia Burton at 856-779-3858 or

comments powered by Disqus