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The Deal He Made

Before he was pushed out as CEO of Goldman Sachs, Jon Corzine had never lost at anything, and his unassuming mien masks a deep hunger for redemption. The Senate isn’t enough. Now his road leads ever deeper through the swamp of New Jersey politics.

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On a beautiful friday evening recently, Senator Jon Corzine, the former head of Goldman Sachs, a man worth some $300 million, was sitting in his silver SUV on Route 1, somewhere deep in the wilds of central New Jersey. Without a GPS or a visible road sign, it was difficult to tell exactly where he was, since one stretch of Route 1 looks more or less like any other: mile after mile of fast food, strip malls, and car dealers.

Corzine, who is running for governor, was between campaign stops. After wrapping up a public meeting at Monmouth Regional High School, he had dinner at the East Brunswick Hilton. Following a salad and chicken potpie, he stopped at a few tables to shake hands—the surprised diners found him hard to place until he introduced himself.

Afterward, Corzine rolled down Route 1, navy pin-striped jacket off, toward his next stop, the Islamic Society of Central Jersey, where he delivered a talk about genocide in Sudan. During the Q&A, one man got up and said, “We are all human beings. All of us together, as people. I am a Muslim, you are Jewish . . . ” Corzine’s neck and face turned red, but he let the man finish talking.

“Actually,” Corzine said to him finally, with a slightly awkward smile, “I’m a Methodist.”

For a politician suffering the indignities of retail campaigning, Route 1 in central New Jersey can be a long, lonely road. And even now, more than five years after Corzine left Wall Street to enter politics, it’s still hard to understand why he chose this path. Why a man whose shoes were as impeccably white as Corzine’s once were would march into the swamp that is New Jersey politics. Corzine, after all, reigned at the richest, most prestigious investment bank in New York. And for Corzine, the Senate isn’t enough. Being governor would put Corzine in a much more hands-on, make-it-happen role. It’s an executive position, of course, and New Jersey has the most powerful governorship in the country. It is the only statewide elected office. “As governor, I’d be able to affect people’s lives,” Corzine says. “I could set an agenda that really works to make the reason I got into politics happen.”

The event that made Jon Corzine a politician took place at the end of 1998, when he was in Telluride, Colorado, on Christmas vacation. As CEO of Goldman Sachs, Corzine had worked for nearly two years to transform the legendary partnership into a public company. Fighting significant resistance from many of the partners, he maneuvered and battled to sell the idea within Goldman. Eventually, he succeeded in his call for a vote by secret ballot, which had never been done before.

With the IPO approved but still several months away, Corzine and his family went skiing. While he was away, three members of Goldman’s five-member executive committee, led by Corzine’s co–chief executive, Hank Paulson (the man he appointed and who still runs the company), staged a palace coup, stripping him of his CEO title and his power. “They worked in secret against him all during Christmas,” says someone familiar with what took place.

Corzine was devastated. Apparently, he never saw it coming. “He came back from Colorado and simply could not believe what had happened,” says a confidante.

Corzine was so humiliated that he couldn’t bear to go to the office, even though he was determined to stay on for several months to see the public offering through to its conclusion. So, according to someone who knows him well, he developed an unusual routine. He’d get up every morning, put on his suit, step into his waiting limo, and ride from his house in Summit, New Jersey, to downtown Manhattan. He’d have his driver park in front of Goldman’s offices at 85 Broad Street—and he’d work from the backseat of his car. He’d have secretaries bring whatever he needed down to him. “You have to understand,” says this person, “he’d always been a winner. He was president of his fraternity. He was captain of every team he’d ever played on. He’d become chief executive at Goldman when nobody except him thought that was possible. He’d never lost at anything before.”

The IPO had made Corzine rich, but after he left Goldman, he found himself in a painful purgatory. He began to put together an investment group to buy Long-Term Capital Management, the hedge fund that had famously crashed in 1998, almost taking the world financial system with it. “I’d gone a long way down that road,” Corzine says. But then Senator Frank Lautenberg announced he wasn’t going to run for another term, and “whether I put another zero on my net worth didn’t seem nearly as interesting or as important,” he says.


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