[Congressional Record Volume 154, Number 20 (Thursday, February 7, 2008)]
[Senate]
[Pages S774-S775]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 DOJ STAFF MEMO ON THE FUTURES MARKETS

  Mr. DURBIN. Mr. President, I thank the majority leader for requesting 
10 minutes for me in morning business.
  The State of Illinois is home to some of the most dynamic and 
innovative financial services firms in the world. For the futures 
markets, Chicago is a global leader. I pay particularly close attention 
to the vitality of these markets. It is an important part not only of 
the economy of my home State but of the economy of our Nation. The work 
in the futures markets has a direct impact on everything from pork 
bellies to currencies to the price of oil.
  I am deeply disturbed with what has taken place this week within the 
Department of Justice relative to those futures markets. As we have 
been told, the staff at the Justice Department recently wrote a memo to 
the Department of Treasury questioning the structure of clearing and 
settlement services in the U.S. futures industry. The staff has 
referred to concerns about restraint on competition and other issues.
  What is troubling about this disclosure is that the Department of 
Justice staffers apparently are claiming that they were simply 
commenting on a Treasury proposal regarding the overall competitiveness 
of America's financial markets. But the comment period on the Treasury 
proposal ended 2 months ago, 2 months before the Department of Justice 
released this memo, and it is been more than 6 months since that same 
Department of Justice approved the merger of the Chicago Mercantile 
Exchange and the Chicago Board of Trade.
  Well, people say: So what? Bureaucrats release memos. Who pays any 
attention to those? Well, let me tell you what happened yesterday. When 
this memo became public, the price of the Chicago Mercantile Exchange 
stock declined by over $100 in 1 day. That reduced shareholders' market 
capitalization by almost $6 billion. A memo from the Department of 
Justice to the Department of Treasury leaked to the Dow Jones Press 
Service, which became public, cost the Chicago Mercantile Exchange, in 
1 day, market capitalization of almost $6 billion. There was no 
justification for this memo. The comment period was closed, the 
Department of Justice had acted on the merger, and there was no reason 
to release it.
  I have joined with my colleague, Congressman Rahm Emanuel, in sending 
a letter to Attorney General Mukasey and Secretary Paulson calling on 
them to not only look at the substance of this memo but also the 
circumstances. By what right was this staff memo issued in the first 
place or released to the press?
  I want to quote one of the Commissioners of the Commodity Futures 
Trading Commission. That is the Government agency responsible for 
regulating these markets. This is what the Commissioner said:

       The Department of Justice staffer letter has unfortunately 
     roiled the markets, and this is precisely the kind of 
     behavior that Government regulators are supposed to take 
     ordinary care and attention to avoid.


[[Page S775]]


  He is right. I think that letter was entirely inappropriate, and the 
fact that it was the leaked to the press--and I do not know whether it 
was leaked at Justice or at Treasury--is something that should be 
investigated. I do not want to read too much into this, but someone who 
understood the impact of the market and decided to short the stock 
could have made a lot of money yesterday. I am not saying that 
occurred, but that is how serious it is, that the stock would go down 
$100 in 1 day because of this action. Today, the stock has started to 
recover. I am glad. But still we have to answer, at the Federal level, 
why this ever occurred.

  These markets are ready to be regulated and examined, and they should 
be. We want transparency and public trust at every single level. And we 
know that competition in this market goes far beyond the United States. 
These are now international and global markets, and the Chicago 
Mercantile Exchange is the one of the leaders in these markets. They 
should be closely regulated, closely watched, and should be subject to 
all of the laws and regulations concerning transparency. But when some 
staffer at the Department of Justice can take a potshot at this global 
market and cost them almost $6 billion in market capitalization in 1 
day, I think we have a right to demand accountability.
  I am joining with my colleagues in the Senate and in the House in 
calling on this administration to look into this matter as quickly as 
possible. I hope to find out why this comment letter was filed 2 months 
after the Treasury Department deadline if the memo was meant to be 
related to that effort. I hope to find out if the Department of Justice 
considered its influence on the markets prior to drafting this letter 
or leaking this letter, whatever was done.
  I hope there is not more to this story than the Justice Department 
staffers are claiming, but I wonder. That is the reason I have written 
to these two leaders in the administration asking for a timely 
response.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BOND. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Mr. President, I understand that the bill is to be called 
back up, the FISA bill; is that correct?
  The PRESIDING OFFICER. That would be the regular order.
  Mr. BOND. If the proponent of the amendment is ready, I would suggest 
that we begin the final lap on these amendments.

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