I sort of blew right by the story of the CFTC judge corruption scandal the other day when it came out, but it’s a pretty big deal. Barry Ritholtz takes a whack at it today. Basically, an Administrative Law Judge at the CFTC (Commodity Futures Trading Commission), George Painter, revealed in his retirement letter that a colleague of his, Judge Bruce Levine, has never awarded a case in favor of a plaintiff in 20 years on the bench. He traces this back to a deal Levine made with Wendy Gramm, the former head of the CFTC and the wife of Phil Gramm (R-Enron and UBS). Indeed, the numbers check out, at least for the time period we know about; Judge Levine has never decided in favor of a plaintiff, i.e. never decided in favor of an investor crying mistreatment or fraud by a commodity dealer or major broker in commodity futures and derivatives trading. Barry picks it up from there:
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 [...]
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)”
Here’s why Painter accused Levine of this misconduct: there are only two Administrative Law judges at the CFTC. “If I simply announced my intention to retire,” Judge Painter says in his letter, “the seven reparation cases on my docket would be reassigned to the only other administrative law judge at the commission, Judge Levine. This I cannot do in good conscience.” He wanted his docket to transfer to an admin law judge at the SEC or FERC instead.
The article that Ritholtz cites, which is nowhere to be found in the WSJ’s archives, makes the case pretty strongly that Judge Levine is in the pocket of the commodity dealers. And as the Center for Public Integrity explains, under Dodd-Frank the CFTC will be much more involved in regulating over-the-counter derivatives.
So far, the CFTC has not responded to this allegation.





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Ah, the missing archives scenario! That’s why I don’t rely solely on my Favorites Tool Bar. I save the article as html. I print it. I save it as a word document. And then I copy/paste into an email to myself if its really important. Because that is exactly what happens. Information disappears. I know some people pdf or do a screen shot of it. Glad you have it.
I don’t expect this to get any traction. Trashing the whistleblower as a drunk and raving lunatic is par for the course.
Oh look at that! Scooter told us that in his love letter to Judith. “they are all connected at the roots”. He referenced the big Aspen trees which I really think mean all the big guys.
Why now after 20 years??? Where the f*ck was he when he first found out that this judge intended to vote a specific way in every single case? Good for Painter for saying something but he’s complicit. He knew this was going on. Levine told him that’s how he was going to rule.
…and Obamco’s war on whistleblowers continues unabated, with an assist by everyone’s favorite propagandist this side of Josef Goebbels, Rupert Murdoch.
I was wondering when teh crazy (it burns…) from the editorial page would infect the news section. Must say I’m surprised it would take 3 years to purge the ethical journalists from the Journal, though. Thought it would be done much sooner.
It seems there’s a good old boy network in the Fed judiciary that’s tighter than most Mafia crews, Margaret. Look at that hooker and blow judge in Atlanta that was recently busted by the FBI. All his fellow judges in the Atlanta courthouse recused themselves from the arraignment, resulting in a specially appointed judge from DC dispatched to adjudicate the case.
Bruce Levine sounds like a Supreme Court candidate!
Painter is no whistleblower, as I read the memo (following back the links from Barry Ridholz).
He didn’t go to some superior or law enforcement agency and say “There’s a funny judge in the courtroom next door, and you ought to look into it.” What he did was issue a notice and order recommending to whoever assigns cases at CFTC that his old cases not be passed along to Levine.
That’s not whistleblowing — that’s trying to take care of a few people you’ve developed some relationship with before you close the door behind you.
To me, this reads like Painter is an idiot who didn’t realize he was confessing to twenty years of participation in a conspiracy to obstruct justice, not a whistleblower asking for an investigation.
Judge Automoton, why not get a on-sided magic 8-ball.
Another judge or two to impeach:
http://www.huffingtonpost.com/2010/10/21/peter-defazio-impeachment-chief-justice-john-roberts_n_771431.html
Roberts.
Funny someone said that a nominee may not perjure themselves – but he thinks Roberts did not. Well I would suspect he did… but everyone KNOWS Clarance Thomas did! So start with that loser.
As for Roberts I wanted to smack the Cheshire Cat smile off his face when I saw him before Congress or any time at the SOTU address. The lying POS. Biggest “activist” judge we are ever going to have in our lives.
He clearly knows he is obvious. The real trouble will be when we go so far down the rabbit hole that he is fully out there with his agenda and crimes without that shit eating smile on his face. When POS like this are allowed to hold their heads high.
one-sided magic eight ball…. “survey of my rules says…”
Painter attached a copy of the WSJ article to his memo, which you can read at Barry’s site.
A taste . . .
“In nearly 180 cases over eight years at the Commodity Futures Trading Commission, he [Levine] has a remarkable record. Except for a handful of cases in which defunct firms failed to defend themselves, Judge Levine has never ruled in favor of an investor.”
It’s a long piece, but worth reading.
Just wonder if this isn’t going to open the door to an avalanche of lawsuits against the CFTC by plaintiffs or their heirs that Levine ruled against over the years?
And I love it that Painter says that he couldn’t let the remaining seven cases go to Levine “in good conscience”.
Helluva conscience that guy’s got. Only took it twenty fucking years to kick in.
Having worked in the legal system for more years than I care to count, including having worked in the federal court system, I can only confirm what you say. Judges will nearly always protect their own no matter what.
There are “good” judges who remain ethical and definitely do their best to uphold the rule of law. But make no mistake, Judges will definitely never stick their necks out to see one of their “brethren” take a hit, even if it’s richly deserved.
I agree that it’s “nice” that Painter finally blew the whistle on Levine, but it’s sort of like: hey thanks for nothing, ya cowardly putz.
Yeah, Painter knew all along that Levine was dirty, but Painter did NADA until Painter was “safe” with his pension paid by YOU & ME.
And of course Pirate Murdoch will go to the ends of the earth to castigate Painter and protect Levine. Definitely. Without a doubt.
Don’t expect Obamaco to “do the right thing.”
Don’t you just love the courage of careerists who do the right thing on the way out the door? With compatriots like these, in high places no less, who needs enemies?
I agree to the nth degree
This story is close to the heart of all investors who have known for years that TPTB in DC in collusion with the Wall Street elite have been manipulating the prices of commodities especially gold and silver. The suppression of the latter is what allowed Robert Rubin to run his strong dollar policy, but the game has been unraveling ever since the financial tsunami hit two years ago.
It seems the rule of law means increasingly little even to those whose job it is to uphold that very law.
Thanks for coming back to this David, this is a major scandal and we shouldn’t let Wendy’s minions hide it away.
Well “love” wouldn’t be the word I’d use….
I caught this at Washingtonsblog a couple days ago
Copy of his order at the link
When I saw the name Wendy Gramm I was unsurprised at all. Its interesting how criminals are all in our lives and usually on the right. Is anybody really shocked?
We need some serious house cleaning in Government, start at home, fix your city/town Government and work your way forward.
That decrepit old reptile Rupert Murdoch now owns the WSJ and we can see that it is becoming Fox News on newsprint.
Bruce Levine belongs in prison, as do the Gramms.
(and to peterr @7)
jeez, give the guy a little credit… delayed conscience is better than none… could’ve avoided your ire entirely by just STFU.
Very well, Peterr@7. Does this sentence make you feel better?
I don’t expect this to get any traction. Trashing the
whistleblowerPerson telling the truth as a drunk and raving lunatic is par for the course.Gramm-Leach-Bliley Act was a Phil Gramm masterpiece. AKA Financial Services Modernization Act of 2000. It basically tore down Glass-Steagall and created the modern regime for credit default swaps, mortgage-backed securities, and the split of duties b/w the SEC and the CFTC. It was the biggest economic time bomb one could plant. And it only took 8 years to explode. I think Phil retired after he got Clinton to sign this. He and Robert Rubin probably were ready to celebrate at that point.