By Benjamin Goad - 07/23/14 03:21 PM EDT
News that a departing member of the Commodity Futures Trading Commission is headed for a major industry group with business before the agency is prompting criticism from advocates who call the move a record-fast “spin through the revolving door.”
A top Democrat also raised questions Wednesday about Scott O’Malia’s swift move from the CFTC to a derivatives industry trade group, suggesting Congress might need to address rules allowing for such jumps.
Those opportunities were made clear two days later, when the International Swaps and Derivatives Association (ISDA) announced Wednesday that O’Malia would be joining the group as chief executive officer.
“This is why Americans are so disgusted with so many high-ranking government officials and believe that Washington is in cahoots with Wall Street,” said Dennis Kelleher, chief executive at the left-leaning group Better Markets.
“Rather than protecting the public interest, they look like they are working for the industry in their government positions and then cashing in, getting what looks like an after-the-fact payoff from industry for services rendered,” he added.
Kelleher said O’Malia’s move was particularly troublesome, since he was joining a group that has been at odds with CFTC initiatives.
Beyond fighting against regulations pressed by the agency, the ISDA is plaintiff in a pair of lawsuits against the CFTC, he said.
Rep. Maxine Waters (Calif.), the top Democrat on the House Financial Services Committee said she would have “serious concerns” about the transition, as reported, and said she would have questions about O’Malia’s intentions.
“It does not bode well to have someone move and go right into a position that they could exercise some influence based on where they’ve been, so I would have concerns about that,” she said.
Waters added that Congress should “start to talk about how we would prevent that kind of move from happening.”
Kelleher said more stringent restrictions are exactly what’s needed to tamp down on an increasingly problematic trend of regulators taking positions within the industries they regulate.
“Killing public trust and reeking of conflicts of interest, senior government officials cashing in and influence peddling are out of control and must be limited by law,” he said.