Now in GOP crosshairs: Commodities
Pressure on the CFTC comes as donations from the securities industry tilt to the GOP. | Reuters
CloseBy DAVID ROGERS | 11/30/11 11:43 PM EST Updated: 12/1/11 11:31 AM EST
Leery of mounting a frontal assault on Wall Street reforms, House Republicans have opted for a guerrilla-style war on the Commodity Futures Trading Commission even as it struggles with a new mandate to regulate the famously rich and wild swaps market.
Just Wednesday, the House Financial Services Committee approved the latest in a series of legislative efforts to challenge the CFTC's rule making on trading in derivatives. Despite its new responsibilities, the agency's budget has been effectively frozen at the insistence of the House GOP. And amid the MF Global investigation, Republicans wrote CFTC Chairman Gary Gensler on Monday, demanding that he turn over a broad array of relevant records as early as Wednesday.
All this comes as political contributions from the securities and investment industry, with a major stake in the derivatives market, have tilted dramatically to the GOP. And among the lead beneficiaries is House Speaker John Boehner (R-Ohio), who collected tens of thousands of dollars from Wall Street partners in just a few days last June.
Campaign data collected by the nonprofit Center for Responsive Politics show that in the 2010 election cycle, securities and investment donors split their money almost evenly between congressional Republicans and Democrats. But the latest data reported by the center for the 2012 election cycle, show Republican congressional candidates already have collected $14 million from the industry, with donations to Democrats trailing at $9.2 million.
Boehner's enhanced status as speaker partly explains the recent increase in his donations. But in many cases, he's now getting help from Wall Street firms that gave little or nothing to the Ohio Republican two years ago.
As a result, his donations from individuals in the industry already top $568,000 — more than double what he received for the entire 2010 election cycle. His office refused to discuss what appears to have been a major Wall Street fundraising push in June, but the center's reports show about $167,000 in June contributions from dozens of individuals associated with Goldman Sachs, Cantor Fitzgerald, Paulson & Co. and Moore Capital Management.
Smaller and less attached to Wall Street, the CFTC is an easier target for Republicans than the Securities and Exchange Commission. And when the Dodd-Frank financial reform law assigned the CFTC its new role in the derivatives market — worth hundreds of trillions of dollars — it became a lightning rod for those who had opposed the law.
As early as June, the House voted to cut the agency's 2012 budget to $171.9 million — less than it had received in 2011 and just $3.1 million more than in 2010, before the reforms were enacted. And while the deal reached last month restores these funds, it was structured in a manner that could still force staff cuts unless further adjustments are made by Congress.
"Because it's politically untenable to call for repeal of Dodd-Frank, they are going under the table to try to prevent its enforcement," Rep. Jim Himes (D-Conn.) told POLITICO. And Rep. Barney Frank (D-Mass.), the chief House author of the reforms, said he has been astonished by the tactics and GOP's success in carrying out its agenda without a lot of public attention.
"It's complicated, and people don't see the different pieces," Frank said. "But what they are doing is finding the weakest links."
Wednesday's markup before the House Financial Services panel illustrates this strategy. And by their own admission, the goal for Republicans is less to pass legislation than to pressure the CFTC commissioners.
Read more: http://www.politico.com/news/stories/1111/69490.html#ixzz1fRdy1nxM
