Following the release of two holds on his nomination, the Senate last Tuesday easily confirmed former Treasury official and Goldman Sachs executive Gary Gensler to be chairman of the Commodity Futures Trading Commission (CFTC).
Gensler's nomination cleared the Senate by 88-6 after Sens. Maria Cantwell (D-WA) and Bernie Sanders (I-VT) released their holds on his nomination that were placed more than a month ago (see NGI, May 18). Still both Cantwell and Sanders voted against confirming Gensler.
"I still remain concerned about Mr. Gensler's nomination to chair the Commodity Futures Trading Commission," Cantwell said on the Senate floor. "Mr. Gensler was at the Department of Treasury a decade ago and he helped push through a bill [in] Congress that provided an iron-clad protection against the regulation of the financial products, such as credit default swaps and derivatives, that are at the heart of this financial crisis.
"I believe we need new blood at the CFTC and all regulatory agencies. We need people who are willing to help move us from a world of unregulated toxic assets to a world of transparency and aggressive oversight," she said. While at Treasury, Gensler testified before Congress against regulation of the derivatives market. "Mr. Gensler, as we know now, was wrong."
And "remarkably now the Senate is confirming Mr. Gensler to serve as the chair of the CFTC...that same agency [he] defamed in his previous tenure as undersecretary at Treasury. That is why I'm opposing Mr. Gensler's confirmation to run the CFTC at a critical [and] important time when we need more financial regulation in these agencies."
While Gensler "is clearly not the nominee that I would have chosen for this position, nor were his answers [to my questions] all that I would have liked, there is no question that he is a stronger nominee today than he was five months ago when I first met him," Sanders said.
"He certainly is an extremely bright and knowledgeable person and has the ability to do a very fine job if he is willing to stand up to the big banks and in support of consumers and the American people. This may be Mr. Gensler's Nixon in China moment. I hope this turns out to be the case."
Sen. Tom Harkin (D-IA), chairman of the Senate Agriculture Committee that has jurisdiction over CFTC nominations, acknowledged that he also has "had some reservations about this nominee -- concerns with elements of his background" on the regulation of the derivatives market. Nevertheless he voted to confirm Gensler last Tuesday.
He noted that Gensler will have his hands full because the CFTC has "never faced more daunting times than it does now."
Cantwell and Sanders agreed to release their holds and allow a vote on the Senate floor after the administration announced earlier this month that it was sending a regulatory reform package to Congress to crack down on excessive and speculative derivatives and commodities trading (see NGI, May 18). The two senators had objected to the role Gensler played nearly 10 years ago as a former undersecretary of the treasury in supporting deregulation of the derivatives market.
Also last week President Obama announced his intent to nominate Commissioner Bart Chilton for a second term on the CFTC. Chilton, the most vocal member of the CFTC, was sworn in as a commissioner in August 2007; his first term has already expired.
Chilton's nomination for a five-year term, expiring in April 2013, has been forwarded to the Senate Agriculture Committee, which has jurisdiction over the CFTC, and then will be sent to the Senate for a vote on confirmation. Chilton's nomination could run into some resistance from senators who are openly critical of the CFTC.
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