New CFTC steward: novice who could break logjam
WASHINGTON (Reuters) - Mark Wetjen, the 37-year-old Democrat nominated to a pivotal fifth seat on the Commodity Futures Trading Commission, proved his political mettle as the "general" of the Senate floor last summer, shepherding through the biggest financial reforms since the Great Depression.
As Senate Majority leader Harry Reid's point man on Dodd-Frank, Wetjen (pronounced Wee-jen) was instrumental in helping rationalize differing versions of the bill, and making sure it moved swiftly once it made its way to the Senate floor for passage, according to a former senior staffer.
While that process will have given the little-known former lawyer an unparalleled view of the reforms that will overhaul the swaps market, Wetjen has left few clues to his personal views of the legislation that he must now help implement, lobbyists and political sources have said.
Wetjen, named by President Barack Obama to replace retiring Democrat Michael Dunn, is expected by many to join forces with CFTC Chairman Gary Gensler and Bart Chilton in pressing forward quickly with reforms.
The Obama Administration needs a third vote to head off a looming counter-attack on the extreme regulatory make-over, including resistance from the two Republican commissioners, Scott O'Malia and Jill Sommers, who have sometimes issued scathing critiques of the current reform process.
Little is known about Wetjen's views before his expected Senate confirmation hearings, unlike his four potential peers, who were better known when they were named.
This could lead to a few tricky months as speculation mounts about his views. Already, some industry lobbyists are questioning his grip on the regulatory agenda.
"He probably doesn't have any significant amount of knowledge about these issues. If he did, I think we would know more about what positions he's likely to take," said a source who lobbies on behalf of the financial industry and follows CFTC rulemaking closely.
At stake may be the future of the world's derivative markets. The CFTC is midway through writing reforms that would bring the $600 trillion over-the-counter swaps market under federal oversight, and put checks on commodity speculation.
PEDAL TO THE FLOOR
Wetjen's closest colleagues say he always presented an independent assessment to Reid, not a preconceived view. This ability to step back would be an asset to the CFTC.
"I think there are some people that think Mark leaves this job with ... preconceived decisions, or he's a defender or something. He's not," David Krone, Reid's chief of staff, told Reuters.
"His job was to be able to present to the leader his best estimation about what might be happening, and what the affects of a certain provision or language" might be.
Wetjen, who had a very brief career practicing law in California and Nevada before joining Reid's staff in 2004, was "the guy who kind of kept the pedal on the gas to make sure we got the bill done," said Robert Holifield, a former staff director on the Senate Agriculture Committee.
Holifield said Wetjen played the role of a trouble-shooter through Dodd-Frank, helping to iron-out differences between Senate committees, or even the House and the Senate, by giving advice, all with Reid's views in mind.
At one point, as the Senate Banking and Agricultural committees were merging their bills, Wetjen was there for every meeting, including weekends, during a two-week stretch.
Holifield said Wetjen's role in Dodd-Frank did not end there. As Dodd-Frank was debated on the Senate floor, Wetjen helped prioritize a flurry of incoming amendments, shepherding the legislation to make sure it passed.
"He was definitely the floor general," Holifield said.
Friends say Wetjen's interest in subjects with which he is concerned runs deep.
"He's a very curious guy. Whenever he pings me to go to lunch, I know to block out three hours," said David LaPlante, a senior vice president at consulting company One to One Interactive. The two met years ago when Wetjen, who was freelancing for magazines in Nevada, wrote a profile of LaPlante.
He's "smart -- frustratingly smart", said LaPlante.
GIVE ME FIVE
Dunn, a 66-year-old Iowan, has said he will stay on past the June 19 end of his term until a replacement is confirmed, but that may be of little comfort to reform-minded Democrats.
Dunn has prided himself on being the swing vote at the agency and expressing candid skepticism about imposing position limits in commodity markets to prevent excessive speculation by big players such as Morgan Stanley (MS.N) and Goldman Sachs (GS.N). one of the CFTC's main efforts.
But the CFTC has been criticized by Republican lawmakers and several of its own commissioners for the fast pace with which it has approached reform and what some critics have called an "irrational" sequence of rules.
When asked about Wetjen's nomination, CFTC's Gensler, a former partner at Goldman Sachs, commented cautiously. Two years ago, Gensler's own nomination was temporarily blocked by lawmakers skeptical of his Wall Street past.
"It's very helpful to always have five commissioners that are actively, thoughtfully engaged," he told the U.S. Senate Banking Committee last Thursday.