Just when you think your ability to get any more disgusted or outraged is finally at its zenith — the point where it is unimaginable to think any worse of Wall Street or its related institutions — along comes a story that outrages you even more.
Futures magazine had an article last week about the retirement letter that Commodity Futures Trading Commission (CFTC) Administrative Law Judge George Painter sent announcing his retirement.
In the letter, he announces that his fellow admin judge has never awarded a case to a plaintiff in 20 years, and that he did so at the urging of former CFTC Chair Wendy Gramm.
A reminder to those of you who may be unfamiliar with this particular corporate harlot: Gramm was not only the former CFTC chair, but she was an Enron board member and wife of deregulation architect Phill Gramm, who for reasons unknown to decent society, is gainfully employed as a fluffer at UBS, helping to further besmirch the reputation of that bailed out firm.
“In a notice sent to complainants and their attorneys, Judge Painter claims that Levine told him that he had promised former CFTC Chair Wendy Gramm “that he would never rule in a complainants favor”. Painter’s notice goes on to say, “A review of his rulings will confirm that he has fulfilled his vow.”
In the notice Painter recommends the CFTC request the services of an administrative law judge to be detailed to the Commission from another regulatory agency to handle the remain cases on his docket. Painter writes, “If I simply announced my intention to retire, the seven reparation cases on my docket would be reassigned to the only other administrative law judge at the Commission, Judge Levine. This I could not do in good conscience.”
Now, if that isn’t weird enough, the WSJ has an a article in today’s paper that can only be described as a hit piece. The accusations of mental unfitness and heavy drinking come from the Judge’s wife in the middle of divorce proceedings.
I wrote to Sarah Lynch, asking how the Journal could do a story on this retiring judge — accusing him of being a drunk and mentally unfit — but omit his most explosive charges against his fellow judge and the CFTC chair Wendy Gramm. “In the Sept. 17 document, Judge Painter said he plans to step down in January and asked the agency to transfer his pending cases to an outside judge instead of Judge Levine.” That hardly does justice to the Judge’s retirement note, and completely omits his charge against former CFTC chair.
Lynch wrote back to note she did a story on the judge last Friday, but it ran on newswires but was not picked up by WSJ. (Reporters have no control over those editorial decision). The current article is a follow up to that prior piece.
I did a WSJ search for “CFTC Judge” seeing when in the past they had covered obscure administrative judges in the past, and other than today’s article, nothing came else was found (Journal search apparently only goes back 2 years).
The whole thing is very curious.
But what makes the WSJ piece truly weird is it ignores an article Judge Painter used to show Judge Levine was biased — from the WSJ itself! The December 2000 article about Judge Levine was titled: “If you got a beef with a futures broker, This Judge Isn’t for You—In Eight Years at the CFTC, Levine Has Never Ruled In Favor of an Investor (PDF)”
And as the Columbia Journalism Review noted:
Dow Jones-owned database Factiva and can’t find it. But it exists. Here’s a link from the Investigative Reporters and Editors website and a Factiva print from the judge that looks like a Wall Street Journal story to me.That piece reported that Judge Levine “In Eight Years at the CFTC, Levine Has Never Ruled In Favor of an Investor.”
So this is going to be a mess to untangle, but it’ll be quite the story if you can. Despite Judge Painter’s apparent infirmities, he’s not completely out to lunch on Judge Levine’s record. What’s Levine done since that 2000 WSJ story? What’s been going on at the CFTC?
Something is not right with this story. A retiring judge accuses a former CFTC chair of criminal conduct. The response — he is accused in the WSJ of being mentally unfit and a drunk, pulled from his wife’s accusation in a divorce action — is quite unseemly.
There is much more to this story, and the chief administrative law judge and/or the US Attorney should investigate these charges.
UPDATE October 21, 2010 10:31am:
The editors at the WSJ did Sarah Lynch a disservice — her piece from today is out of context without the prior article (excerpted below). And she notes that the details in her piece came form the guardianship case — not the divorce filing.
As a standalone article, it reads like a hit piece, with lots of holes and missing factors, but within the context of the prior piece, it makes more sense. The missing items are in the previous article:
“A retiring administrative law judge has asked the Commodity Futures Trading Commission to prevent his colleague from ruling on his leftover cases, saying investors won’t get a fair shake.
CFTC Administrative Law Judge George Painter, in a letter released Wednesday, accused fellow CFTC administrative law judge Bruce Levine of bias in his handling of complaints by investors against their futures brokers.
The notice, received by the CFTC’s Office of Proceedings, asks the CFTC to formally request a judge from another federal agency to take up his seven remaining cases instead of reassigning them to Levine.
In a highly unusual public rebuke of his colleague, Painter rails against the way Levine has handled cases involving investors who don’t have attorneys and come to the commission with grievances against their brokers.
Painter claims Levine told him nearly 20 years ago that he promised then-CFTC Chairman Wendy Gramm he’d never rule in favor of a complainant.
“A review of his rulings will confirm that he has fulfilled his vow,” Painter wrote. He added that Levine forces plaintiffs without legal representation “to run a hostile gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case.”
Judge Levine declined to comment about Painter’s allegations and a CFTC spokesman also declined to comment. But former CFTC attorney Robert Zwirb, who also worked at the agency during Gramm’s tenure, defended Levine’s record and said Painter’s letter is nothing more than a political attack.
“The allegation that Judge Painter makes is like a pathetic caricature,” said Zwirb, an attorney at Cadwalader, Wickersham & Taft. “It’s really aimed at the person that appointed him–Wendy Gramm. It’s so absurd. No chairman of either party…would enter into some kind of understanding like that.”
He added that Levine is the kind of judge who applies both the law and economics to his decisions, calling his opinions “intellectual works of art.”
Zwirb also provided some documents to show examples where Levine has ruled in favor of investors who filed reparations cases. In some instances, however, the defendants didn’t appear to fully participate in the proceedings.
Painter’s letter has caught the attention of lawyers around Washington, many of whom say they are stunned by what it says. It also raises questions about whether the letter will force the CFTC to look into the allegations and potentially take action.
Attached to Painter’s letter was a 10-year-old article from The Wall Street Journal, titled “If You’ve Got A Beef With A Futures Broker, This Judge Is Not For You–In Eight Years at the CFTC, Levine Has Never Ruled In Favor Of An Investor.”
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Sources:
“If you got a beef with a futures broker, This Judge Isn’t for You—In Eight Years at the CFTC, Levine Has Never Ruled In Favor of an Investor”
Michael Schroeder
Wall Street Journal December 5 2000
URL Unknown; PDF here
CFTC judge claims colleague issued biased rulings
DANIEL P. COLLINS
Futures Mag 10/14/2010
http://www.futuresmag.com/News/2010/10/Pages/CFTC-judge-claims-colleague-is-biased-.aspx
The Plot Thickens at the CFTC
A judge accuses another judge of improprieties. But there’s more to the story.
Ryan Chittum
CJR, October 20, 2010
http://www.cjr.org/the_audit/plot_thickens_cftc_judge.php
Case Sheds Light on Judge
SARAH N. LYNCH
WSJ, OCTOBER 21, 2010
http://online.wsj.com/article/SB10001424052702304011604575564610646663830.html
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