WASHINGTON Aug 1 A U.S. lawmaker has launched an inquiry into the amount of money the Commodity Futures Trading Commission spends on leases, expressing concern that the derivatives regulator is wasting taxpayer money on underutilized space.
In a July 31 letter to the CFTC, U.S. Senate Iowa Republican Charles Grassley requested records detailing how much the agency has been spent and whether it has taken steps to reduce the amount of unused space it leases.
"The purpose of this letter is to state our concerns with how the agency has managed its resources in the past, and to learn how the agency plans to better manage these resources in the future," Grassley wrote.
The CFTC's inspector general released a report in June that concluded the CFTC had paid millions of dollars for office space in Kansas City, Missouri, that was vacant. The report said that of $5.3 million the CFTC was paying for the 10-year lease, $3.6 million was for unused space. [ID: nL2N0OT1JV]
For an agency with a $215 million budget, the watchdog concluded the expense was a waste and asked the CFTC to review all of its leases. The CFTC acknowledged in the report that some space was not used, but said it would be unwise to get rid of excess space.
That is because the CFTC won broad authority in 2010 to police the over-the-counter derivatives market. The CFTC said it was hoping Congress might increase its budget to hire more staff, who would require space.
Grassley said that while he was concerned about the Kansas City lease, he also had "serious questions" about how the CFTC manages leases for other offices.
He pointed to data showing that of 1,352 seats in long-term leases at four office locations, only 922 seats were occupied.
In the CFTC's Washington, D.C. headquarters, he said, the agency added two floors and a hearing room, which increased rent by about $255,000 per month averaged over 10 years.
"The CFTC spends $48,000 per month for the hearing room area alone but, according to agency documents, the space is hardly used," Grassley wrote.
A CFTC spokesman did not immediately respond to a request for comment on Grassley's inquiry.
The CFTC is not the only regulatory agency whose leasing decisions have been called into question. The Consumer Financial Protection Bureau is being scrutinized over a multi-million facelift on its rented headquarters. [ID: nL2N0PD0WX]
The Federal Reserve and the U.S. Securities and Exchange Commission have faced criticism in the past over leasing decisions. (Reporting by Sarah N. Lynch; Additional reporting by Douwe Miedema)