Retiring CFTC Judge: We Covered Up Market Manipulation
Wednesday, October 20, 2010 – by Staff Report
NEW DEVELOPMENTS IN THE CFTC SCANDAL: On September 17, 2010, CFTC Administrative Law Judge, George H Painter, issued a "Notice and Order" announcing his retirement from his position. In this notice Judge Painter wrote of a conspiracy at the highest levels of the CFTC (within the ENFORCEMENT DIVISION) where a long time judge of 20 years has been conspiring with past CFTC Chairs to RIG THE ENFORCEMENT OF THE LAW by NOT finding ANYONE guilty of market manipulation. Here are Judge Painter's own words:
"There are two administrative law judges at the Commodity Futures Trading Commission: myself and the Honorable Bruce Levine. On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor. A review of his rulings will confirm that he has fulfilled his vow. Judge Levine, in the cynical guise of enforcing the rules, forces pro se complaints to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case"
WASHINGTON—An administrative law judge at the Commodity Futures Trading Commission heard and decided cases during a period when his wife said he struggled with mental illness and alcoholism, court records show.
Administrative law judge George H. Painter, 83 years old, issued rulings as recently as Feb. 26, 2010. A range of medical problems led to a 21-day stay in a geriatric psychiatric ward in June, according to Montgomery County (Md.) Circuit Court records filed by his wife's lawyer. Those records were filed in an effort by his wife to seek guardianship over the judge.
Nicholas J. Schor, an Olney, Md., psychiatrist, wrote on Aug. 26, 2010, that Judge Painter's disability was "profound" and it prevented him from making or communicating any responsible decisions, according to court records.
Judge Painter's lawyer, Jean Galloway Ball, said in an interview he is capable of "managing his person and property." A CFTC spokesman declined to comment.
The disclosure comes as the CFTC takes on a bigger role due to the Dodd-Frank financial-regulation law passed in July. The law gives the CFTC broad authority to tighten regulation over some of the financial instruments blamed for contributing to the 2008 financial crisis.
The agency's two administrative law judges have seen their role diminish in recent years. The CFTC can ask the Merit Systems Protection Board, an independent body in the executive branch, to remove or suspend an administrative law judge. Matt Shannon, a board official, said it doesn't have a record of any such request against Judge Painter.
In a separate action, a document dated Sept. 17 and signed by Judge Painter said the other administrative law judge, Bruce Levine, is biased against investors. The document said Judge Levine forces plaintiffs without legal representation "to run a hostile gauntlet until they lose hope."
Judge Levine declined to comment, but a former colleague defended Judge Levine's record and said he is fair.
Judge Painter's wife, Elizabeth Ritter, is a longtime lawyer at the CFTC. She and Judge Painter are in the middle of divorce proceedings, which the judge initiated.
Ms. Ritter's attorney, Kim Viti Fiorentino, said Ms. Ritter is just trying to take care of her ailing husband and that he should be able to receive "the kind of care and treatment and loving oversight that she thinks he deserves."
The judge's son, Douglas Painter, and a niece said in legal filings protesting the guardianship claim that the judge doesn't exhibit the mental problems described in court records by his wife. Judge Painter's lawyer, Ms. Galloway Ball, said he intends to fight the guardianship case.
"We are disputing the need for the establishment of a guardian and disputing that he suffers from Alzheimer's," said Ms. Galloway Ball.
In the Sept. 17 document, Judge Painter said he plans to step down in January and asked the agency to transfer his pending cases to an outside judge instead of Judge Levine.
Judge Painter has six cases pending before him, with total claims adding up to a little more than $1 million, according to a CFTC spokesman.
In June, doctors at Johns Hopkins Hospital diagnosed the judge as having "probable Alzheimer's type dementia with behavioral disturbance," according to a discharge statement in court records.
"His wife states that although he has been getting a full-time paycheck, he mainly sleeps at work," according to the Johns Hopkins medical records that also cite an interview with Judge Painter's wife.
The son's legal filing contains results of a 30-question medical test, conducted by a geriatric-care manager and dated July 1, 2010, that describes Judge Painter as mentally competent.
A guardianship petition filed by Ms. Ritter on Aug. 30 says a Georgetown Hospital doctor first diagnosed Judge Painter with "cognitive impairment, alcoholism and depression" in March 2008. Before that, his wife said the judge "began to exhibit significant and abnormal behavioral changes" and he started "drinking up to eight martinis a day" in 2007.
The Washington Post has a brief story reporting that one of two administrative judges at the Commodity Futures Trading Commission, in retiring, is accusing his counterpart of saying he would never rule for a plaintiff:
“On Judge Levine’s first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant’s favor,” Painter wrote. “A review of his rulings will confirm that he fulfilled his vow,” Painter wrote.
Painter continued: “Judge Levine, in the cynical guise of enforcing the rules, forces pro se complainants to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case.”
Wendy Gramm’s husband is Phil, by the way, one of the major forces behind the disastrous deregulation bill that handcuffed the CFTC on credit-default swaps and helped lead to the current financial crisis.
The Post’s piece follows a brief story from Futures magazine several days ago on Judge Painter’s allegation.
But the plot thickens this evening with this longer Wall Street Journal story reporting that Painter’s wife is trying to get guardianship over the 83-year-old, who in turn is trying to divorce her.
Administrative law judge George H. Painter, 83 years old, issued rulings as recently as Feb. 26, 2010. A range of medical problems led to a 21-day stay in a geriatric psychiatric ward in June, according to Montgomery County (Md.) Circuit Court records filed by his wife’s lawyer. Those records were filed in an effort by his wife to seek guardianship over the judge.
Nicholas J. Schor, an Olney, Md., psychiatrist, wrote on Aug. 26, 2010, that Judge Painter’s disability was “profound” and it prevented him from making or communicating any responsible decisions, according to court records.
Judge Painter’s lawyer, Jean Galloway Ball, said in an interview he is capable of “managing his person and property.”
The judge’s wife says he mostly sleeps on the job, drinks eight martinis a day, and court records say he probably has Alzheimer’s and has had “cognitive impairment, alcoholism and depression” (though the judge’s son and niece say he’s fine).
So we’re left to wonder how the Post missed this big part of the story. It certainly requires a follow-up.
But we’re also left to wonder why the Journal downplays the judge’s accusations when his key piece of evidence is… a Wall Street Journal leder from a decade ago. The Post and Futures mention this story, but the Journal doesn’t.
I went looking for it in Dow Jones-owned database Factiva and can’t find it. But it exists. Here’s a link from the Investigative Reporters and Editors website and a Factiva print from the judge that looks like a Wall Street Journal story to me.
That piece reported that Judge Levine “In Eight Years at the CFTC, Levine Has Never Ruled In Favor of an Investor.”
So this is going to be a mess to untangle, but it’ll be quite the story if you can. Despite Judge Painter’s apparent infirmities, he’s not completely out to lunch on Judge Levine’s record. What’s Levine done since that 2000 WSJ story?
What’s been going on at the CFTC?
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The Gramms have hurt America. Phil Gramm led the charge to overturn Glass-Steagall. This allowed insurance (swaps) on bad loans and also allowed securitization of mortgages and artificial housing appreciated, the crash and foreclosuregate. These people live without conscience. For Gramm, the American public is just a bunch of whiners. McCain would have made the guy his treasury secretary. Of course, McCain was seasoned in scams, having been central to the savings and loan scam. Should have gotten rid of these guys from public office years ago.
Posted by Gary Anderson on Wed 20 Oct 2010 at 10:27 PM
If you've got a beef with a futures broker, this judge isn't for you. In eight years at the CFTC, Levine has never ruled in favor of an investor. Number: 20478 Subject: Justice Source: Wall Street Journal (New York) State: NY Title: If you've got a beef with a futures broker, this judge isn't for you. In eight years at the CFTC, Levine has never ruled in favor of an investor. Author(s): Michael Shroeder Year: 2000 Publication date: December 13, 2000 Summary: According to the article, "In his job as a federal administrative law judge, Bruce Levine decides whether aggrieved investors have been defrauded by commodity dealers and should get money back. In nearly 180 cases over eight years at the Commodity Futures Trading Commission, he has a remarkable record. Except for a handful of cases in which defunct firms failed to defend themselves, Judge Levine has never ruled in favor of an investor." Category: General Total pages: 3 Keywords: Bruce Levine;judges;investors;Commodity Futures Trading Commission;cases;law;trial;federal administrative law judge
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