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.”

>

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

Category: Financial Press, Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

31 Responses to “Judge: CFTC Corrupt, Wendy Gramm Criminal”

  1. JohnL says:

    I’m shocked. Shocked to find there’s gambling going on in here.

  2. MayorQuimby says:

    I believe Mr. Holder has the day (year) off. Sorry everyone. Now get back to work!

  3. Petey Wheatstraw says:

    Good morning, BR. How’s the coffee?

    Re: The Judges:

    The Judiciary is by far the most corrupt branch of government, and the WSJ is yellow journalism (same as all of the other Rufus Murdick media). No surprise, there. That’s what happens when you deregulate to the point that corporations can openly work against the interests of society. Not much that can or ever could be done against a newspaper engaging in such practices, but broadcast media (dependent on licensed use of public airwaves) used to have to serve the public interest in order to obtain or maintain its license to broadcast. Why were our parents and grandparents so much more protective of the public interest? I’m really starting to believe there’s something being put into our water (maybe the old “fluoridation is mind control” idea was true). Then again, maybe we were raised and publicly educated to be fools. We’ve played into the hands of the corporatists.

    As for the Judiciary, there is no reason for any private and natural American citizen to believe that they will get a fair shake from our uber-corporatized, uber-immunized Judiciary.

    A few years ago, Margaret Hagen, PhD. — a professor of Psychology at Boston University — wrote a book entitled, ‘Whores of the Court: The Fraud of Psychiatric Testimony and the Rape of American Justice’. You can pretty much get the gist of the book from the title.

    http://whoresofthecourt.com/

    It’s no wonder Judge Painter’s mental state has been called into question, and it’s no surprise that the question made it’s way into the public discourse via a divorce proceeding. Ultimately, Judge Painter will be eaten alive by his former peers for the crime of breaking ranks with the Brotherhood of the Bar and telling the truth about one of his peers.

    The Court system is a for-profit industry, openly shirking it’s Constitutional duties and limitations in order to enrich and empower its membership, and to further enable the corporatist agenda. It is the backstop for all manner of pseudo-official criminality.

  4. HEHEHE says:

    Barry you don’t go into it enough. Who is Wendy Gramm? Why the wife of former Sen Phil Gramm. He of the wonderful Gramm Leach Bliley act which destroyed Glass Steagal. I don’t want to besmirch her due to her husbands actions when she’d done enough crazy stuff on her own to destroy the economy. She did a great job on Enron’s board of directors for oh so many years making sure nothing funny went on there too. Truly a woman with amazing gifts of oversight.

  5. Yeah, I hammer that point in Bailout Nationbut forget that everyone does not know that.

    I’ll add that above.

  6. sumo says:

    I, for one, welcome our grasping thieving overlords.

  7. Transor Z says:

    Brooksley who?
    http://www.pbs.org/wgbh/pages/frontline/warning/view/

    Wasn’t it reporter Jimmy Breslin who said that when you want to assassinate someone’s character you always start with accusations of insanity and then move on to accusations of sodomy?

  8. Petey Wheatstraw says:

    “There is much more to this story, and the chief administrative law judge and/or the US Attorney should investigate these charges.”
    ___________

    Yeah? If that happens, just watch how fast the “official” evaluation of Judge Painter’s “mental state” will paint him as a complete psychopath.

    Who knew? He seemed like such a normal person, until he went bat-shit crazy and bit the hand that fed him.

  9. HEHEHE says:

    Seriously I dare somebody to find two people in this country who have done more to destroy the economy more than Phil and Wendy Gramm.

  10. Transor Z says:

    Barry: Is it divorce proceedings or guardianship proceedings? I think it might be the latter…

    @HEHEHE: Alan Greenspan and Robert Rubin might give them a run for their money.

    ~~~

    BR: Both

  11. VennData says:

    Phil Frontal Screwedity.

  12. b_thunder says:

    So where was this judge before? Was his conscience asleep while he was on the bench? Or perhaps the same arm that “fed” judge (refuse capitalize this judge) Levine, also “fed” Painter?

    i wonder if certain bow-tied pundit/investors will keeps telling anyone who’d listen: “call your broker, buy some coffee, sugar, rubber and when futures.” i’m sure all your right will be protected.

  13. curbyourrisk says:

    BR said: There is much more to this story, and the chief administrative law judge and/or the US Attorney should investigate these charges.

    ____________________________

    SO NOT GONNA HAPPEN……… HAVE YOU FORGOTTEN WHAT COUNTRY YOU LIVE IN? HAVE YOU FORGOTTEN THE RULE OF LAW MEANS VERY LITTLE ANYMORE IN THIS COUNTY, UNLESS YOU ARE A COMMONER???

  14. ashpelham2 says:

    The arrogance and pride of the ruling party is never to be underestimated. Aren’t the Gramm’s from Texas? Has a decent polictician ever come from that state? LBJ doesn’t count…

  15. Lancair360 says:

    BR, I’m not here to defend Wendy Gramm because lord knows she and Phil have done more than enough damage to this country to warrant a good deal of criticism but lets be fair about what Judge Painter wrote.

    Nowhere in his letter did he state (or even suggest as you do) that Wendy Gramm urged Judge Levine to rule against a complainant. He merely wrote that Judge Painter promised Wendy Gramm he would not rule in favor of a complainant.

    How this promise came about is anybody’s guess and it may be a distinction without a difference but I have seen more than my share of cases where judges take a stupid/unethical stand without being prompted to do so.

  16. Re: The Judges:

    The Judiciary is by far the most corrupt branch of government, and the WSJ is yellow journalism (same as all of the other Rufus Murdick media). No surprise, there. That’s what happens when you deregulate to the point that corporations can openly work against the interests of society. Not much that can or ever could be done against a newspaper engaging in such practices, but broadcast media (dependent on licensed use of public airwaves) used to have to serve the public interest in order to obtain or maintain its license to broadcast. Why were our parents and grandparents so much more protective of the public interest? I’m really starting to believe there’s something being put into our water (maybe the old “fluoridation is mind control” idea was true). Then again, maybe we were raised and publicly educated to be fools. We’ve played into the hands of the corporatists.

    As for the Judiciary, there is no reason for any private and natural American citizen to believe that they will get a fair shake from our uber-corporatized, uber-immunized Judiciary.

    A few years ago, Margaret Hagen, PhD. — a professor of Psychology at Boston University — wrote a book entitled, ‘Whores of the Court: The Fraud of Psychiatric Testimony and the Rape of American Justice’. You can pretty much get the gist of the book from the title.

    http://whoresofthecourt.com/

    It’s no wonder Judge Painter’s mental state has been called into question, and it’s no surprise that the question made it’s way into the public discourse via a divorce proceeding. Ultimately, Judge Painter will be eaten alive by his former peers for the crime of breaking ranks with the Brotherhood of the Bar and telling the truth about one of his peers.

    The Court system is a for-profit industry, openly shirking it’s Constitutional duties and limitations in order to enrich and empower its membership, and to further enable the corporatist agenda. It is the backstop for all manner of pseudo-official criminality.
    ~~
    some things need to be re-read.
    ~~

    BR,

    and you wonder why some argue that “Markets should ‘regulate themselves’ “(?)

    there’s a big clue, it does away with the pretense/delusion..

  17. Petey Wheatstraw says:

    Lancair360 Says:

    “Nowhere in his letter did he state (or even suggest as you do) that Wendy Gramm urged Judge Levine to rule against a complainant. He merely wrote that Judge Painter promised Wendy Gramm he would not rule in favor of a complainant.”
    _____________

    What’s the diff? You can’t rule for one without ruling against the other. In either event, such a statement is unethical, if not criminal.

    “. . . I have seen more than my share of cases where judges take a stupid/unethical stand without being prompted to do so.”
    _____________

    Being that there are generally no cameras in the courtroom, and in States where cameras are allowed, or if non-litigant witnesses are present in the courtroom, off-the-record meetings in Judges Chambers happen all the time. If the utmost secrecy is required, the judge simply goes duck hunting with the party seeking a favorable ruling from the court. Why else would such off-the-record meetings between members of the same fraternity (or worse yet, a private meeting between the judge hearing the case and a party involved in litigation before the Court) be allowed?

    Cameras at every intersection, but none in the courtroom? The Judiciary is above the law.

  18. ACS says:

    LBJ certainly doesn’t count; just read the Caro biography.

  19. Patrick Neid says:

    “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”…..

    That certainly was the norm in the late 70′s, 80′s and early 90′s. For anyone to win in arbitration the broker/dealer virtually had to draw a gun and steal your money. “Fast market” conditions virtually covered everything outside of embezzlement. The house always won. Even the individual brokers themselves got screwed by their U4 agreements. Then, perhaps even now, in futures trading when a client went deficit the broker has to make up the difference regardless of conditions. They take your paycheck after the mortgage payment! Don’t even think about arguing about it.

    You haven’t lived until you have an account a quarter of a million in deficit, the client calls you up and tells you they have no more money and it’s your birthday—on the open, Oct 20, 1987!

  20. HEHEHE says:

    Believe me if the WSJ is protecting Wendy it’s because Wendy knows too much.

  21. AHodge says:

    i think this admin will get to this, it is an R connected judge afterall.
    but not while the election on
    the inflexible order of the day is look pro business?

  22. Darkness says:

    Wendy Gramm has been a real winner for a long time. Did Enron’s and the energy industry’s bidding at OMB’s OIRA and then, despite the breaking scandal and mass resignations, refused to back down on accepting her revolving door reward on Enron’s Board. The lack of shame in this family alone is astounding enough.

    Screwing over your country should be called on fast and hard when it happens at this level.

  23. carrottop says:

    great piece barry.

  24. DeDude says:

    After the supreme court first refused votes to be counted to give the presidency to Bush and then later gave citizens rights to corporations, nobody with a brain can be shocked about Judge Levine. However, the fact that Judge Painter openly states the corrupt biases of our legal system in favor of our corporate masters is shocking. I have no doubt that he must have been drunk.

  25. nemo says:

    I’m sure Rupert Murdoch’s ownership of the Wall Street Journal has absolutely nothing to do with the recent dumbing down and editorial corruption of the WSJ. It must be just a coincidence.

  26. notakid says:

    All one needed to know of phil and windy was back when phil was wanting to run for prez …. recall his money is all that matters attitude, oh and he is another hawk who was a draft dodger in the ‘Nam days.

    The two of them are as corrupt and money grubbing as any two I can think of.

    Match made in heaven i guess, honest people couldn’t stand the two of them.

  27. S Brennan says:

    “Forget it, Barry. It’s Murdoch.”

    Apologies to Joe Mantell who died a few weeks ago…

  28. Dexter says:

    The most corrupt couple in Washington. I hope a Matt Taiibi piece is coming.

  29. FrancoisT says:

    Hey Dexter,

    Don’t miss Taibbi’s next book “Griftopia”

    As barry said; He captures the Zeitgeist of the nation better than anyone else.

  30. lexalexander says:

    [[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.]]

    And WikiLeaks implicates U.S. personnel in yet more war crimes, and Diane Sawyer’s response is to suggest that the Wikileaks people be prosecuted.

    Forget it, Barry, we’re all Murdoch now.

    Apologies to both the late Joe Mantell and previous commenter S. Brennan

  31. [...] Hiltzik of the Los Angeles Times takes Judge Painter‘s CFTC accusation against his fellow judge Bruce Levine to a new level: “It would be [...]