UPDATE 2-Obama campaign may return cash from MF Global's Corzine
* MF Global chief was major fundraiser for Obama
* Republicans, Democrats spar over big fundraisers
* Politicians becoming sensitive about ties to Wall St. (Adds details on Wall Street ties, Republicans' response)
WASHINGTON, Nov 2 (Reuters) - President Barack Obama's re-election campaign would return the donations made by embattled MF Global chief Jon Corzine if he were charged with any wrongdoing, a campaign official said on Wednesday.
Corzine, who is at the center of a storm over the securities company's bankruptcy this week, has been a major fundraiser for Obama, having donated the maximum of $5,000 that an individual can give for a presidential campaign, according to campaign finance records.
He also held a lavish $35,800-a-head fundraising dinner for Obama at his home in April and raised or "bundled" donations of at least $500,000 so far for Obama's 2012 re-election effort.
An Obama campaign official, speaking on condition of anonymity, said the donations received from Corzine as an individual would be returned if civil or criminal charges are brought against him.
"Politicians, like business people, are risk averse," said Jim Kessler, a policy analyst at the Democratic-leaning think tank Third Way. "Until people know more of what is going on they will distance themselves from Jon Corzine."
Neither MF Global nor Corzine, a former Goldman Sachs (GS.N) executive, have been accused of any wrongdoing, though investigations are under way by several U.S. regulatory agencies.
Bad European debt trades by MF Global pushed the company into bankruptcy, but the heat on the firm now is concentrated on why it cannot account for large sums of customer money that was supposed to be kept separate from other funds, sources told Reuters.
MF Global said in court this week there are no shortfalls in its brokerage accounts.
Obama has a frosty relationship with Wall Street because of the regulatory overhaul he ordered following the 2007-2008 economic meltdown. But bankers and other financiers remain prominent among his big financial backers.
A Democratic fundraiser for past presidential candidates said the loss of one person should not affect Obama's standing on Wall Street.
"I don't see how one person is going to make or break anything," this person said, speaking on condition of anonymity because he is friendly with Corzine. "If the economy is going well that would be the best envoy into Wall Street."
Still, Republicans seized upon Obama's ties with Corzine, a former Democratic U.S. senator and New Jersey governor.
"It would only be right of they gave all of the money back that came of it," Republican National Committee spokesman Sean Spicer said of the minimum of $500,000 that Corzine raised.
SENSITIVE TO WALL STREET TIES
Both sides are sensitive to being perceived as too cozy with Wall Street.
Earlier, Nevada Democrats chastised Republican presidential candidate Mitt Romney for a fundraiser he is holding in New York attended by John Paulson, a hedge fund manager known for making billions of dollars during the home foreclosure crisis when the stock market tanked.
Corzine has also donated $15,000 to the Democratic Congressional Campaign Committee this year and $25,000 to Senate Democrats in 2010, according to regulatory filings.
Elected to the Senate in 2000, Corzine served on the Senate Banking Committee and was a vocal advocate for the Sarbanes-Oxley Act of 2002, which tightened U.S. accounting rules after the Enron scandal.
In 2005 he won election as New Jersey's governor and resigned from the Senate a year before the end of his term.
"If you look at his life accomplishments, up until three days ago, the most noteworthy thing remains Goldman Sachs," said a former senior Republican aide on the banking committee.
Unlike some other senators, Corzine did not leave behind a long roster of former staff members who assumed powerful positions in government.
Corzine has two connections at the U.S. Commodity Futures Trading Commission, which is investigating the collapse of MF Global.
Steven Adamske, the commission's director of public affairs, is a former Corzine press secretary.
Both CFTC Chairman Gary Gensler and Corzine worked at Goldman Sachs. Gensler was an adviser to Democratic Senator Paul Sarbanes, co-author of a 2002 accounting law that set new standards for U.S. public companies in the wake of several major corporate scandals that shook public confidence in the securities markets. (Additional reporting by David Ingram; editing by Christopher Wilson Mohammed Zargham)