Recently, the White House announced the nomination of two men to the Commodity Futures Trading Commission, which is seemingly good news at first. However, as the old saying goes, “the devil is in the details.”
The two nominees are Chris Brummer, a Georgetown University law professor, and Brian Quintenz, a former senior policy aide to former Congresswoman Deborah Pryce, an Ohio Republican.
Five CFTC commissioners serve five-year terms. All commissioners are never up for reappointment at once, and no more than three commissioners may be from the same political party. If both Brummer and Quintenz are confirmed, the CFTC would be ruled by three Democrats and two Republicans.
Brummer would fill the current vacancy by Democrat Mark Wetjen, who left the Commission in 2015. Quintenz would fill the current vacancy by Republican Scott O’Malia, who stepped down in 2014.
Now I’m sure these two gentlemen are nice, smart guys, but let’s talk about their experience—or lack of. In terms of agriculture—you know, the folks the CFTC are supposed to be looking out for—these guys have zero experience. They also have zero experience whatsoever in the markets they are supposed to be regulating. Not a stitch.
These guys would be a better fit at the U.S. Securities and Exchange Commission.
The mission of the CFTC is to “foster open, transparent, competitive and financially sound markets, to avoid systemic risk and to protect the market users and their funds, consumers and the public from fraud, manipulation and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act.”
The traditional futures markets were once regulated by USDA, then Congress created the CFTC in 1974.
The Senate Agriculture Committee is tasked with vetting and confirming CFTC nominees. My guess is that Chairman Pat Roberts will not stand for this lack of agriculture experience, but time will tell. Roberts said reauthorizing the CFTC—which is overdue—would be “useless” if commissioners “don’t comprehend how their decisions impact end-users, especially agriculture producers.”
The Agriculture Committee already has a number of items on its plate this year—Child Nutrition Reauthorization, biotech labeling and of course CFTC reauthorization under the Commodity Exchange Act. Fitting in a confirmation of these two guys may be tight.
Editor’s note: Seymour Klierly writes Washington Whispers for the Journal from inside the Beltway.