I believe President Obama should appoint Scott O’Malia as the acting chairman of the CFTC when Gary Gensler leaves the Commission at the end of the year.
As the United States faces a shutdown of its government due to partisan fighting between Republicans and Democrats, President Obama has a unique opportunity to remind the American people that he leads a bi-partisan administration. As a Democrat who has selected cabinet officers from the opposite party multiple times, President Obama has the opportunity to appoint a Republican appointee to be the acting chairman of the U.S. Commodity Futures Trading Commission. He has the opportunity to appoint the the person I believe most qualified to lead the CFTC during its continued development and deployment of the rules required by Dodd-Frank.
Scott O’Malia is that person. As a current CFTC commissioner and one who has the most respect in Washington and the industry at the commission for his understanding of the challenges facing the futures industry, he is the best choice to succeed current chairman Gary Gensler.
Chairman Gensler’s term is up and he will be forced to leave the commission at the end of the year. By nearly all accounts – except his own, according to some news reports – he will not be renominated as chairman and has little to no chance of being confirmed again by the U.S. Senate. While a recess appointment has been hinted at lately, I would suggest that act would only politicize the CFTC even more. What we as a nation and we as an industry need right now is to de-politicize our markets and the regulators who oversee them.
Commissioner O’Malia has earned the respect of the futures industry for his work to understand the challenges the industry faces. Specifically, his work with the Technology Advisory Committee has addressed some of the biggest issues facing not only the futures industry, but the securities industry as well.
O’Malia understands that charging forward with the launch of the SEF rules, which were still being tweaked as late as Friday was a dangerous gambit. He understands the radical residual interest rules being considered could kill the industry and the markets he is sworn to protect. I can only guess where he stands on the transaction tax issue, but know it is backed by input from a breadth of sources.
An O’Malia led CFTC could include up to three members from the Democratic side, forcing him and these fellow commissioners to find compromise and common ground in order to move the regulatory agenda forward.
In this time of demonization of our markets and segments of market participants, we need a strong regulator who understands how the markets really work and can effectively communicate to the public and the industry.
We need someone who can help restore confidence in our markets, through effective regulation and a strong understanding of the problems of the past and the challenges of the future.
We need Scott O’Malia as the acting CFTC chairman in January. If he works out OK, as I believe he will, then he should be considered as the permanent chairman.
By appointing him acting chairman, the President will help his cause with the American people during this current standoff with Congress and he will give the Dodd-Frank implementation efforts the best continuation efforts the American people and the futures industry deserve.
I have witnessed first hand Commissioner O’Malia’s professionalism as he approaches the challenges in front of the CFTC. I don’t make this recommendation based on political affiliation, I make it on selecting the best person for the job. I understand the political professionals and cynics will call me naive, but I believe we can move beyond the politics of the moment to a better future with small steps like this.
President Obama has the ability and the history of doing just that. With two Republican Defense secretaries during his presidency, Mr. Obama has looked outside his party for the best leaders for key positions. I believe this is another case of the same.
I am not a Republican and in fact, as Will Rogers once said, I am not a member of any organized political party. I believe Scott O’Malia is the best person for this job and hope President Obama will give him the opportunity.