MF Global Hotseat for Corzine ... and the White House?

Will former N.J. governor and his ex chief of staff testify about firm's demise and missing billions and what does that mean for the Obama White House?

This is a rush transcript from "On the Record," November 28, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: New developments in the MF Global scandal, $1.2 billion missing, and Congress wants to know if former CEO Jon Corzine plans to show up to testify at a hearing on the firm's massive collapse. The former New Jersey Senator now finds himself on the other side of a Capitol Hill investigation.

Fox Business Network's Charlie Gasparino joins us. Good evening, Charlie, and, boy, I'll tell you, things are not good for Senator Corzine tonight.

CHARLIE GASPARINO, FOX BUSINESS SENIOR CORRESPONDENT: No, not good. And his lawyers, what we learned at the Fox Business Network, are negotiating with the House subcommittee and there's now a Senate committee that's investigating this and they are negotiating his possible testimony.

I'll be honest with you, you are a lawyer, I'm not, but I can't see him if he does show up other than I plead the Fifth because there's a lot of stuff going on. There's a criminal investigation going on. It involves that missing money. It could be as much as $1.2 billion. So this is a serious situation.

VAN SUSTEREN: In terms of this, quote, "missing money," is it a sufficient pigs it was a really bad investment, trying to buy up the European sovereign debt and that sort of went belly up, or is there suspicion somebody has stuffed it in their pockets and run?

GASPARINO: The bottom line, in the last couple days of the firm's existence, they had to basically sell stuff to keep solvent. They had to pay people off, essentially other counterparties on trades. The problem is that to do those operational things, what it looks like is that they dipped into money that should be segregated. That was customer money.

Now, did they do that intentionally or was it bad bookkeeping? Either way it's bad. I predict if he shows up Jon Corzine will take the Fifth it he shows up.

VAN SUSTEREN: I suspect we will see Jon Corzine in some ads come the general election because he was very instrumental in helping President Obama fashion the stimulus program. He wanted a very aggressive stimulus program, and Vice President Biden has been quoted as saying Senator Corzine, the smartest guy I know in terms of the economy. So he will not only be making an appearance on Capitol Hill but we will see a lot of him.

GASPARINO: Absolutely. And here's the thing, President Obama's Achilles heel is the economy. And some of the guys from the private sector he surrounds himself with, Jeffrey Immelt at GE, I think they have created more jobs overseas than they have here. And Jon Corzine, if you look at his record on Wall Street, he got thrown out of Goldman Sachs because he wasn't a great risk manager. And if he's guilty here, forget the criminal stuff, just look at his record at MF Global. Not a great risk manager. That's not the type of guy you want touting as your economic --

VAN SUSTEREN: But they say he did a lousy job at Goldman Sachs, and he's thought to have a couple million dollars. Where did he get so rich?

GASPARINO: I don't think he has a couple million dollars. He spent a lot on campaigns, on costly divorces. I think he lost money in this. He was a decent bond trader. He made a lot of money in the early '80s and '90s trading bonds. But in terms of his managerial skills, managing Goldman Sachs, one of the main reasons he's out is because he was a lousy risk manager for the firm.

And I'll tell you, if you are a lousy risk manager, it comes back to haunt you. I think the big problem at MF Global, if you take out whether the customer money was commingled or purposely taken, we will find out about that, is that it wasn't managed well. They went whole hog into the debt of Italy and Spain when they didn't have the balance sheet to sustain that for a long period of time and investors looked at it and ran for the hills.

VAN SUSTEREN: When do you think the $1.2 billion began to disappear? Was it the last couple weeks when they began to hit the skids as they scrambled to try to find ways to stay solvent or has it going on for a long period of time and regulators have failed to catch it?

GASPARINO: We will know about that. Number one, there were money issues at MF Global for predating the implosion of the firm during that last tumultuous week and meaning people were getting checks, more money than they were owed, traders. And it was essentially a firm that didn't have very good compliance systems throughout, I think.

But I think when you really -- when the rubber met the road, it was that last week. When customers, and we at the Fox Business Network were the first to report this, customers were pulling out. They weren't dealing with the lenders. If you are a Wall Street firm you have to borrow money from the markets to keep your operations going. You have to put up collateral. Lenders were pulling those lines of credit. All that happened in the last week and particularly towards the end of the last week of their existence when the rating agencies started to downgrade them. That's when they got collateral calls and that's when people said give us the money you owe us. And that's when a lot of people think they started dipping into the customer funds.

VAN SUSTEREN: I can't help but notice the Green Bay Packer helmet behind you.

(LAUGHTER)

GASPARINO: Hey, I'm a Giant fans, just so you know.

VAN SUSTEREN: What are you doing with the Saints behind you?

GASPARINO: I'm in New Orleans. I'm here on business.

VAN SUSTEREN: OK.

GASPARINO: But I'm a Giants fan. Just remember that.

VAN SUSTEREN: All right, you are forgiven. Charlie, thank you.

GASPARINO: OK.