[Congressional Record Volume 154, Number 152 (Wednesday, September 24, 2008)]
[House]
[Pages H9321-H9323]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  REGARDING INSPECTOR GENERAL OF COMMODITY FUTURES TRADING COMMISSION

  Mr. TOWNS. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 6406) to elevate the Inspector General of the Commodity 
Futures Trading Commission to an Inspector General appointed pursuant 
to section 3 of the Inspector General Act of 1978, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6406

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. INSPECTOR GENERAL OF COMMODITY FUTURES TRADING 
                   COMMISSION.

       (a) Elevation of Office.--
       (1) Inclusion of cftc in definition of establishment.--
       (A) Section 11(1) of the Inspector General Act of 1978 (5 
     U.S.C. App.) is amended by striking ``or the Federal 
     Cochairpersons of

[[Page H9322]]

     the Commissions established under section 15301 of title 40, 
     United States Code;'' and inserting ``the Federal 
     Cochairpersons of the Commissions established under section 
     15301 of title 40, United States Code; or the Chairman of the 
     Commodity Futures Trading Commission;''.
       (B) Section 11(2) of the Inspector General Act of 1978 (5 
     U.S.C. App.) is amended by striking ``or the Commissions 
     established under section 15301 of title 40, United States 
     Code,'' and inserting ``the Commissions established under 
     section 15301 of title 40, United States Code, or the 
     Commodity Futures Trading Commission,''.
       (2) Exclusion of cftc from definition of designated federal 
     entity.--Section 8G(a)(2) of the Inspector General Act of 
     1978 (5 U.S.C. App.) is amended by striking ``the Commodity 
     Futures Trading Commission,''.
       (b) Effective Date; Transition Rule.--
       (1) Effective date.--The amendments made by this section 
     shall take effect 30 days after the date of enactment of this 
     Act.
       (2) Transition rule.--An individual serving as Inspector 
     General of the Commodity Futures Trading Commission on the 
     effective date of this section pursuant to an appointment 
     made under section 8G of the Inspector General Act of 1978 (5 
     U.S.C. App.)--
       (A) may continue so serving until the President makes an 
     appointment under section 3(a) of such Act consistent with 
     the amendments made by this section; and
       (B) shall, while serving under subparagraph (A), remain 
     subject to the provisions of section 8G of such Act which 
     apply with respect to the Commodity Futures Trading 
     Commission.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Towns) and the gentleman from Tennessee (Mr. Duncan) each 
will control 20 minutes.
  The Chair recognizes the gentleman from New York.


                             General Leave

  Mr. TOWNS. Madam Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. TOWNS. Madam Speaker, I yield myself such time as I may consume.
  H.R. 6406 will elevate the Inspector General of the Commodity Futures 
Trading Commission to a Presidentially appointed, Senate-confirmed 
position. This bill strengthens the integrity of the Commodity Futures 
Trading Commission by giving the Inspector General more authority and 
independence to investigate CFTC's regulation of commodity futures and 
option markets.
  H.R. 6406 builds upon legislation recently passed by the House to 
give the CFTC more authority to investigate and regulate speculations 
in all and future markets. In light of the current financial crisis, 
this bill is an important step in boosting the independence, 
accountability, and credibility of a key financial regulator.
  Under current law, the Inspector General is hired by the chairman of 
the CFTC. This process may prevent the IG from conducting a thorough 
investigation into CFTC's programs and operations. This bill will 
separate the IG's oversight function from day-to-day management by the 
chairman and commissioners and reassure market users and the public 
that they are being protected from fraud, manipulation, and abusive 
practices related to the sale of commodity and financial futures.
  Madam Speaker, this bill is a small but important step towards 
improving public trust in the Commodity Futures Trading Commission. I 
fully support its passage and urge my colleagues to do the same.
  I reserve the balance of my time.
  Mr. DUNCAN. I yield myself such time as I may consume.
  Madam Speaker, I'm honored to be on the floor on this legislation 
with my good friend, Chairman Towns, who is one of our great Members on 
the other side.
  Today we take up H.R. 6406 which elevates the Inspector General of 
the Commodity Futures Trading Commission to an Inspector General 
position requiring a Presidential appointment and Senate confirmation, 
or, as some people refer to it, a PAS position.
  On behalf of Ranking Member Davis, I do want to express one concern, 
and that is that this legislation does not come to the floor through 
regular order, and while we understand the need to move quickly to 
ensure that we have solid oversight from an independent source at the 
CFTC, this bill could have benefited from a review by the Oversight and 
Government Reform Committee.
  Recommendation 6 of Paul Volcker's National Commission on Public 
Service issued in January of 2003 said, ``Congress and the President 
should work together to significantly reduce the number of executive 
branch political positions.''

                              {time}  1730

  The Commission noted that President Kennedy had 286 leadership 
positions to fill when he became President in 1960, and that by the end 
of the Clinton administration there were 914 principle leadership 
positions; and that in 2001, the new President, George W. Bush, at that 
time confronted a total of 3,361 offices to be filled by political 
appointment.
  The Commission pointed to several reasons for this, mostly due to a 
bad Federal management structure. But regarding Inspectors General, we 
believe much of this stems from an assumption that the PAS process 
generates a more professional and independent Inspector General. To our 
knowledge, no one has successfully demonstrated a nexus between the PAS 
process and professional excellence. And our fear is that a growing lag 
in the PAS process will cause even larger gaps in leadership during the 
Presidential transitions.
  With that said, however, on our side, we're inclined to support this 
bill given the current crisis that we face. And we know that the CFTC 
is a very important agency, particularly at this time. But we caution 
our colleagues to pay more attention to these ``elevation bills'' in 
the future and insist on a specific articulated need for any proposed 
change, and also, hopefully, full committee hearings.
  Madam Speaker, I reserve the balance of my time.
  Mr. TOWNS. Madam Speaker, I yield 2 minutes to the gentleman from 
North Carolina, Congressman Etheridge.
  Mr. ETHERIDGE. I thank the gentleman for yielding.
  Madam Speaker, I rise in support of H.R. 6406, Mr. Larson's bill to 
make the Inspector General at the CFTC a Presidential appointment, and 
hence more of an independent office within the Commission.
  Madam Speaker, as you know, the provisions of H.R. 6406 were 
originally part of the Commodity Markets Transparency and 
Accountability Act introduced by the Ag chairman, Chairman Peterson, 
and myself after Representative Larson had brought it to us. The House 
has already supported those provisions with 276 votes when the CMTA was 
first considered on July 30 of this year. Unfortunately, because of 
jurisdictional issues, the provisions were not a part of the version of 
the CMTA Act that passed the House last week. I am pleased that we are 
able to take this vote today to promote an independent Inspector 
General for the CFTC as originally intended.
  We passed the CMTA to bring some more sunshine to the commodities 
market and over-the-counter trading of energy and agricultural 
commodities. This greater transparency will help establish greater 
confidence in the markets. An independent Inspector General will 
contribute further to that goal.
  I applaud the gentleman from Connecticut for his perseverance in 
moving the bill forward. The points he has raised regarding the need 
for this bill have merit. Currently, the Department of the Treasury is 
the only financial regulator with a Presidentially-appointed Inspector 
General. This bill will make the CFTC the second financial regulator 
with this kind of independent oversight.
  Given the financial turmoil that we have seen in other financial 
markets, the arguments for a more independent Inspector General for the 
CFTC also apply to other financial regulators, like the Federal Reserve 
Board and the SEC. Congress may want to consider requiring similar 
provisions for other financial regulators.
  This bill is a step in the right direction to bring confidence to 
financial markets. I urge my colleagues to support the bill.
  Mr. DUNCAN. Madam Speaker, I continue to reserve our time.
  Mr. TOWNS. Madam Speaker, I yield 3 minutes to the sponsor of the 
bill, Congressman Larson from the great State of Connecticut.
  Mr. LARSON of Connecticut. Thank you, Chairman Towns.
  I appreciate the opportunity to speak on behalf of this important 
bill that's a

[[Page H9323]]

vital piece of our anti-speculation measures we have passed in the 
House this session.
  By elevating the Inspector General of the Commodities Futures Trading 
Commission to the level of a wholly independent office will provide for 
greater oversight in our commodities markets and, as Mr. Etheridge has 
said and as Mr. Peterson and the committee acknowledged, was important 
in terms of us letting all the sunshine we can into what is commonly 
referred to as the ``dark market.'' And this would provide us a great 
opportunity to make sure that, on behalf of the American people, that 
we return the sheriff to the job and bring back much-needed regulation 
in these areas.
  I want to thank Chairman Peterson and Ranking Member Goodlatte for 
their leadership and Chairman Waxman and Ranking Member Tom Davis for 
helping with this legislation. But I must say that the genesis of this 
legislation comes from individuals from my home State who came to me 
with concerns about senior citizens having to take their entire Social 
Security check and put it into home heating oil. And what they had 
noted is that rampant speculation was driving the costs up in these 
markets and the laws of supply and demand have been suspended, and what 
was needed was an antiseptic, a way to open up and look at these 
markets in terms of allowing the sunshine to come in.
  As my grandfather Nolan would say, ``It's a simple case of trust 
everyone, but cut the cards.'' And in this, not only do we have an 
opportunity to cut the cards, but shuffle and give a new deal to the 
American people. That's why this legislation is so important.
  I appreciate all of the work and effort the committee has done. 
Certainly the surge in oil prices this summer has worsened the concerns 
on behalf of the American people. It's important, especially given all 
that has happened as we sit here, that this Congress, that this body do 
everything that it can to restore oversight and review and bring back 
to the American people the notion that this is the people's House, and 
we're watching what's happening on Wall Street on their behalf and 
empowering people with all the appropriate tools to go after those who 
will break the law or move outside of the law and not act on behalf of 
the interests of the American people.
  Again, I want to thank the chairman. And I want to thank those in the 
committee for ushering this legislation forward.
  Mr. DUNCAN. Madam Speaker, we continue to reserve.
  Mr. TOWNS. Madam Speaker, let me say, I want to first commend the 
gentleman from Connecticut for putting this legislation together.
  This is a very timely piece of legislation; we need it today more 
than ever. We need to have an independent IG. We need to make certain 
that his hands are not tied or her hands are not tied, that they're 
able to go and to look, and wherever the problem is, that they're able 
to go without being interfered with.
  So I think this is a great piece of legislation. And I'm happy to 
have a presidential appointment, because that's the kind of 
independence that's needed, as you know what's going on in this country 
today. I mean, let's face it. And of course we need to make certain 
that we have transparency. We need to make certain that people in the 
position are able to carry out that position without any kind of 
restrictions at all. So this legislation addresses that.
  I think it's a good piece of legislation. I encourage my colleagues 
and friends to support it. And I say to the author of it and to the 
members who have been very involved in the Ag Committee for this, I 
really want to say to you, thank you for doing the right thing.
  On that note, Madam Speaker, I reserve the balance of my time.
  Mr. DUNCAN. Madam Speaker, I'm sorry. We didn't realize that Chairman 
Towns didn't have any other speakers. So I urge all Members to support 
the passage of H.R. 6406.
  Mr. DAVIS of Virginia. Madam Speaker, today, we take up H.R. 6406, 
which elevates the Inspector General of the Commodity Futures Trading 
Commission to an Inspector General position requiring a Presidential 
appointment and Senate confirmation, PAS positions.
  This legislation does not come to the floor through regular order--
and while I understand the need to move quickly to ensure we have solid 
oversight from an independent source at the CFTC, this bill could have 
benefited from a review by the Oversight and Government Reform 
Committee.
  Recommendation 6 of Paul Volcker's National Commission on the Public 
Service, issued in January 2003 is, and I quote, ``Congress and the 
President should work together to significantly reduce the number of 
executive branch political positions.''
  The Commission noted that President Kennedy had 286 leadership 
positions to fill when he became President in 1960; that by the end of 
the Clinton administration, there were 914 principal leadership 
positions; and that, in 2001, the new President George W. Bush 
confronted a total of 3,361 offices to be filled by political 
appointment.
  The Commission pointed to several reasons for this--mostly due to a 
bad Federal management structure. But I think much of this--and let's 
focus on IGs here--stems from an assumption that the PAS process 
generates a more professional and independent Inspector General.
  I see little evidence this is true. I don't think anyone has 
successfully demonstrated a nexus between the PAS process and 
professional excellence.
  Since we already have too many PAS positions and I doubt the next 
President and the next Congress will take the Volcker Commission's 
Recommendation 6 to heart, large gaps will continue to occur in 
leadership during Presidential transitions.
  With that said, however, I am inclined to support this bill given the 
current crisis we face. But I caution my colleagues to pay more 
attention to these ``elevation bills'' in the future and insist on a 
specific, articulated need for any proposed change.
  Mr. DUNCAN. Madam Speaker, I yield back the balance of my time.
  Mr. TOWNS. Madam Speaker, I yield back the balance of my time and 
urge my colleagues to support this legislation.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York (Mr. Towns) that the House suspend the rules 
and pass the bill, H.R. 6406, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________