Just before he retired, former Commodity Futures Trading Commission judge
George H. Painter issued a notice to the Commission that exposed his colleague,
Judge Bruce Levine, as a biased and corrupt judge, according to an Oct.
19 Washington Post article. In his notice, Painter claimed that Levine
told him almost twenty years ago that he had promised then-Chairwoman
of the Commission Wendy Gramm that he would stand in the way of investor
complaints and never rule in an investor's favor.
Congress created the Commodity Futures Trading Commission in 1974. Its
mission is to regulate the commodities market and "protect market
users and the public from fraud, manipulation, and abusive practices related
to the sale of commodity and financial futures and options." Painter's
claims of bias and misconduct imply that Levine and Gramm failed to uphold
the Commission's responsibilities.
Painter and Levine worked together at the Commission for almost twenty
years. As the Commission's two administrative law judges, it was their
duty to preside over investor complaints that alleged misconduct by trading
professionals or financial firms involved in the commodities market. According
to the article, Painter wrote that he could not "in good conscience"
turn his seven pending cases over to Levine and asked the Commission to
enlist another federal administrative judge to take them.
"Judge Levine, in the cynical guise of enforcing the rules, forces
pro se complainants to run a hostile procedural gauntlet until they lose
hope, and either withdraw their complaint or settle for a pittance, regardless
of the merits of the case," wrote Painter. To back up his claims,
he appealed to Levine's record. "A review of his rulings will
confirm that he fulfilled his vow."
According to the article, in addition to Painter's claims, Gramm has
been criticized by some politicians in Congress for her apparent role
in assisting Goldman Sachs and Enron gain increased influence over the
commodities market. The fact that she joined Enron's board after leaving
the Commission lends weight to the criticisms.
This is not the first time Levine has been the subject of scrutiny for
his CFTC record. Ten years ago, the Wall Street Journal published an article
that claimed Levine almost never ruled in favor of an investor. In the
few cases where he did rule for the complainant, his hand was forced by
defunct firms that were unable to put together a defense.
While the CFTC has released Painter's notice, the Commission has declined
to issue a formal comment on the matter.