While the written response of the Commodity Futures Trading Commission (CFTC) to a Senate Energy Committee request for information about market manipulation was similar to that of FERC in saying it would be illegal for them to divulge details of preliminary investigations, the CFTC won a pass from the committee by offering to provide private confidential briefings for the congressional committee. FERC did not.
"Any response that is 'Sorry, we can't tell you about that' is not going to be an acceptable response," a committee spokesman said, explaining criticism leveled at the Federal Energy Regulatory Commission by Energy Committee Chairman Jeff Bingaman, D-NM (see Daily GPI, April 17).
"In my view, the collapse last fall of the Amaranth Advisors hedge fund, with its large positions in natural gas markets, suggests congressional oversight in this area is warranted," Bingaman said in his press release. "Given the billions of dollars at stake, it's appropriate for the committee to ask serious questions about how our regulatory agencies are working together, whether they have the authorities they need to adequately police these markets, and if they are using the authorities they have as Congress intended -- to protect American consumers and businesses." The senator said he had some questions that FERC had left unanswered.
In their written responses to the committee both agencies described their market monitoring processes, but refused to name names and incidents they had investigated, noting that most often their initial observations, starting off with very little information, were proved wrong when full information was gathered. Besides the fact that they are prohibited from relating any information about these preliminary investigations, the premature release of information could disrupt the market unnecessarily, the letters said. The CFTC, however, included a footnote, to wit: "Upon receipt of a congressional request, Commission staff has provided private, confidential briefings in similar circumstances."
The Senate committee "was satisfied with the oral responses from the CFTC. They told us what we were interested in learning. We haven't had the same offer from FERC," Senate committee spokesman Bill Wicker said. The contretemps could be smoothed later this week when Bingaman meets privately with FERC Chairman Joseph P. Kelliher. Questioned as to whether the committee planned to hold hearings later, Wicker said it was too soon to speculate on what the committee's next action would be; "we haven't ruled anything out."
The written responses from the agencies to the committee, sent in February, were released this week pursuant to a Freedom of Information Act request.
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