Chairman Harkin, Senator Lugar and Members of the Agriculture Committee, I am honored to appear before you as President Bush’s nominee to be a Commissioner at the Commodity Futures Trading Commission (CFTC). I greatly appreciate the President offering me this opportunity to serve the public. In particular, I want to express my deep admiration to Senator Lugar for whom I have worked for almost nine years. I would not have this opportunity but for his support and guidance.
I am pleased to recognize my wife, Dana, my parents, Wayne and Carol Lukken of Council Bluffs, Iowa, my wife’s parents, Jerry and Denise Bostic of Morgan City, Louisiana, as well as many colleagues and friends in the audience today. I truly value their support throughout this nomination process.
My exposure to financial markets began as an undergraduate at the Kelly School of Business at Indiana University, where I studied finance. Upon graduating with honors from Indiana, I went on to receive my law degree from Lewis and Clark Law School in Portland, Oregon.
In 1993, I began my career in government service with Senator Lugar as a legislative assistant handling financial and tax matters. In the Lugar office, I learned not only the Senate process, but also how fairness, integrity, and Midwestern sensibilities can shape important policy decisions. Throughout the years, I have tried to emulate these decision-making qualities in my work, and I promise to bring such values with me to the Commission.
In 1997, I began to cover issues relating to the futures and derivatives markets for Chairman Lugar on the Senate Agriculture Committee. I was drawn to the futures industry because of its growing importance to the U.S. economy and because of the thoughtful policy debates surrounding it.
In 2000, I was one of the staff assigned to work on the Commodity Futures Modernization Act (CFMA), which was the most significant reform of commodity futures regulation in twenty-five years. My approach to advancing this legislation involved openly engaging staff, both Democrats and Republicans, as well as regulators and industry members in an attempt to build a consensus among them. I believe that this “open door” approach left those involved with this legislation – even those opposed to it – with the belief that the final product was developed in a fair manner. If confirmed, I would use such an approach to assist the Commission with its implementation of the Act.
Despite several revisions to its statute throughout the years, the primary mission of the Commodity Futures Trading Commission has remained constant. The CFTC is charged with protecting the public and market users from fraud, preventing commodity price manipulation, providing a price discovering mechanism for certain commodities, and fostering open, competitive and financially sound futures and options markets.
This mission remains as vital today as it did when the CFTC was created. With the crisis of confidence in our financial markets caused by corporate misdeeds and our global war on terrorism, it is imperative that the Commission be a diligent but calming force.
Like any good Hoosier, I like basketball analogies. Every fan knows that a good referee can raise the level of competition in a basketball game. The referee’s presence reassures both teams that the outcome of the game has been reached in a just and fair manner. Similarly, appropriate regulatory oversight and enforcement, especially during times of economic stress, serve to re-vitalize markets by reassuring the public and market participants that the rules of the game are being followed.
However, it is equally important to understand that when fouls are not being committed, referees and regulators should allow the competition itself to determine the outcome. Participants in our markets must have the freedom to compete, to innovate and to take risks if the U.S. economy is to grow and prosper. Free markets must determine winners and losers, not regulators.
This is a difficult but necessary balance to achieve. If confirmed, I will work closely with the other members of the Commission to prevent and prosecute illegal activities while understanding the need to minimize the regulatory footprint on market innovation and competition.
I consider myself very fortunate to have this opportunity to serve the public. However, the potential for this exciting new beginning also would involve a difficult end. The Senate has been my life, both professionally and socially, for almost nine years. I could not leave without expressing my sincere thanks to all the colleagues with whom I have worked throughout the years. I consider many to be close friends. I am confident that the bonds of these relationships will remain strong, and that our paths will frequently intersect in the future.
Mr. Chairman, thank you for offering me this opportunity to testify and I welcome any questions that Senators may have.
Last Updated: July 22, 2007