Cantwell blocks nominations over oil trading rules

Sen. Maria Cantwell has blocked three nominations to the Commodity Futures Trading Commission - including the president's choice to lead the panel - saying the federal agency has failed to regulate oil markets even as the price of gasoline hits record highs.

"They've dropped the ball," Cantwell said of the five-member commission. "And the consequences are the American people are paying hand over fist for our inability to rein in oil traders and properly do oversight."

Cantwell, a Washington state Democrat, said she will continue to block the nominations of Acting Chairman Walter Lukken and two other acting commissioners indefinitely.

"We have a CFTC and an administration that is watching out more for Wall street than Main Street," Cantwell said Thursday on the Senate floor. "We need transparency and tough rules in place to make sure that markets work for the consumer."

Cantwell's action comes as the Senate moves ahead with a Democratic plan to curb oil market speculation that has been blamed for some of the recent run-up in oil prices. Democrats say the price hikes are due in part to speculation and investment by Wall Street traders who are buying huge quantities of oil just to resell at a higher price.

Cantwell said she was encouraged that the commodity futures commission charged an oil trading firm Thursday with manipulating oil prices - the first indictment to come down since the regulators began a new investigation into wrongdoing in the energy markets. Netherlands-based Optiver Holding, two of its subsidiaries and three employees were charged with manipulation and attempted manipulation of crude oil, heating oil and gasoline futures on the New York Mercantile Exchange.

While the indictments are welcome news, the commission must do more, Cantwell said.

Referring to a recent comment by President Bush that Wall Street traders got "drunk" - causing many of the problems now afflicting the U.S. economy - Cantwell said, "Wall Street might be drunk, Mr. President, but it is the American people that have the hangover, and we have to help them recover."

A key part of that effort is confirming commissioners "who are going to enforce the laws on the books," Cantwell said.

A spokesman for the agency declined to comment Thursday. Besides Lukken, who has served on the CFTC since 2002 and has been nominated to chair the five-member panel, Cantwell also is blocking the nominations of acting Commissioners Bart Chilton and Scott O'Malia. Chilton is a former Clinton administration official and leader of the National Farm Union, while O'Malia is a former aide to GOP Sens. Mitch McConnell of Kentucky and Pete Domenici of New Mexico.

The White House said that commodity futures commission investigations had resulted in 58 enforcement actions against 157 defendants in the last year. Proceedings initiated by the CFTC have yielded more than $133 million in civil penalties and $105 million in restitution, the White House said in a statement.

Cantwell has been calling for greater transparency and oversight of oil and gas markets for months. In April, she called on the Department of Justice to create a special task force to examine fraud and manipulation of oil and gas markets, and she has repeatedly called on the CFTC and other federal agencies to use their existing authority to conduct oversight over the oil and gas markets.

The Senate bill, which moved forward this week on a procedural vote, has since bogged down amid partisan squabbling.

Republicans appeared unlikely to agree to cut off debate and move the measure to a final vote. They complained that Senate Majority Leader Harry Reid, D-Nev., had blocked them from offering amendments.

Cantwell called the bill a good start, but added: "We need to make sure it provides a clear and workable approach so that markets respond accordingly, and there is no possible excuse for federal regulators to continue sitting on their hands."