Former New Jersey Gov. Jon Corzine has a knack for using money -- often not his own -- to gain political and personal advantage. But his latest power play -- taking $40 million of his former company's insurance to protect himself -- is mind-boggling.

Corzine is now in the CNBC headlines because the big bets he took as chief executive of MF Global brought down the firm in one of the 10 largest bankruptcies in U.S. history. But his risk-taking, free-spending ways began a long time ago.

On the move

Corzine rose to prominence as co-chair of Goldman Sachs, a leading investment bank and, some would say, the biggest predator on Wall Street. But in 1999 he was bounced out after doing battle with his co-CEO.

Corzine left with $400 million and decided to own New Jersey. He handily won one of its U.S. Senate seats in 2001 by spending $62 million of his own money in the most expensive Senate campaign in history.

When Gov. Jim McGreevey resigned after wrongdoing, New Jersey State Sen. Richard Codey was appointed to succeed him until the interim election in 2005. But Corzine decided that he wanted to be governor and pushed Codey aside. And with his money -- and the fact that New Jersey is largely Democratic -- Corzine again got his way.

His "me first" attitude prevailed during his four year term. His tenure is best remembered for the car wreck he caused on New Jersey's Garden State Parkway in 2007 when Corzine's official car was traveling 90 miles an hour with emergency lights flashing on its way to a high profile meeting between radio talk show host Don Imus and the Rutgers University women's basketball team.

Then in 2009, after a bitter re-election campaign, he was voted out of office, trounced by Republican Chris Christie. Corzine headed back to private industry, taking the top spot at MF Global in 2010.

Going bankrupt

According to a Congressional report, Corzine made dangerous trades, including huge bets on foreign debt in unstable economies, which ultimately totaled $7.4 billion. And when the company's risk officer challenged him, Corzine had the man fired.

"The level of hubris and bullying … stands out for sheer offensiveness," wrote Bloomberg news columnist William Cohan.

In 2011, just 14 months after Corzine took over, MF Global imploded, resulting in at least 23 lawsuits. Federal regulators questioned how an estimated $1.6 billion in customers' money disappeared.

Corzine's strategy, according to the court-appointed administrator now in charge of MF Global, has been to delay, delay, delay. And to use MF Global's Directors & Officers (D&O) insurance policy.

Insurance for execs

D&O is designed to protect a company's directors, officers and board members from lawsuits by paying their legal expenses. Almost all public companies, and many private ones, purchase it for the top brass, arguing that if CEOs, CFOs and board members had to pay their own legal expenses, no one would want the jobs.

But cases such as MF Global show that in many instances corporate officers and CEOs behave badly, and that boards allow them to do so. Should they all get a free ride in court because their companies bought huge D&O policies?

Apparently so. In the latest court hearing, the judge was "startled," according to The Wall Street Journal, to learn that Corzine & friends had already spent $30 million on their defense and were demanding another $10 million.

"You've spent a lot of money," the judge said. And, he added, it only "got you as far as discovery," the first step in the legal process. Nonetheless, Corzine and his cohorts got the $10 million, part of MF Global's total $225 million policy, according to The New York Times.

Some might argue that the longer this case drags on, the less likely justice will be served, particularly since Corzine is now 67. It also might offend those who've had to plead guilty, even to minor traffic offenses, because they couldn't afford an attorney.

And finally, it might bother shareholders to know that so much of their money is spent on insurance to defend executives who -- like Corzine -- can do whatever they want, knowing full-well their legal bills will be covered.