Hearings Committee on Agriculture House of Representatives
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HEARING TO REVIEW DERIVATIVES LEGISLATION HEARINGS BEFORE THE COMMITTEE ON AGRICULTURE HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION FEBRUARY 3, 4, 2009 Serial No. 111–1 ( Printed for the use of the Committee on Agriculture agriculture.house.gov U.S. GOVERNMENT PRINTING OFFICE 51–698 PDF WASHINGTON : 2009 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate 0ct 09 2002 13:03 Aug 27, 2009 Jkt 041481 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 I:\DOCS\111-01\51698.TXT AGR1 PsN: BRIAN COMMITTEE ON AGRICULTURE COLLIN C. PETERSON, Minnesota, Chairman TIM HOLDEN, Pennsylvania, FRANK D. LUCAS, Oklahoma, Ranking Vice Chairman Minority Member MIKE MCINTYRE, North Carolina BOB GOODLATTE, Virginia LEONARD L. BOSWELL, Iowa JERRY MORAN, Kansas JOE BACA, California TIMOTHY V. JOHNSON, Illinois DENNIS A. CARDOZA, California SAM GRAVES, Missouri DAVID SCOTT, Georgia MIKE ROGERS, Alabama JIM MARSHALL, Georgia STEVE KING, Iowa STEPHANIE HERSETH SANDLIN, South RANDY NEUGEBAUER, Texas Dakota K. MICHAEL CONAWAY, Texas HENRY CUELLAR, Texas JEFF FORTENBERRY, Nebraska JIM COSTA, California JEAN SCHMIDT, Ohio BRAD ELLSWORTH, Indiana ADRIAN SMITH, Nebraska TIMOTHY J. WALZ, Minnesota ROBERT E. LATTA, Ohio STEVE KAGEN, Wisconsin DAVID P. ROE, Tennessee KURT SCHRADER, Oregon BLAINE LUETKEMEYER, Missouri DEBORAH L. HALVORSON, Illinois GLENN THOMPSON, Pennsylvania KATHLEEN A. DAHLKEMPER, BILL CASSIDY, Louisiana Pennsylvania CYNTHIA M. LUMMIS, Wyoming ERIC J.J. MASSA, New York BOBBY BRIGHT, Alabama BETSY MARKEY, Colorado FRANK KRATOVIL, JR., Maryland MARK H. SCHAUER, Michigan LARRY KISSELL, North Carolina JOHN A. BOCCIERI, Ohio EARL POMEROY, North Dakota TRAVIS W. CHILDERS, Mississippi WALT MINNICK, Idaho PROFESSIONAL STAFF ROBERT L. LAREW, Chief of Staff ANDREW W. BAKER, Chief Counsel APRIL SLAYTON, Communications Director NICOLE SCOTT, Minority Staff Director (II) VerDate 0ct 09 2002 13:03 Aug 27, 2009 Jkt 041481 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 I:\DOCS\111-01\51698.TXT AGR1 PsN: BRIAN C O N T E N T S Page Tuesday, February 3, 2009 Graves, Hon. Sam, a Representative in Congress from Missouri, prepared statement .............................................................................................................. 6 Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, opening statement .............................................................................................................. 5 Peterson, Hon. Collin C., a Representative in Congress from Minnesota, open- ing statement ........................................................................................................ 1 Prepared statement .......................................................................................... 3 WITNESSES Buis, Tom, President, National Farmers Union, Washington, D.C. .................... 6 Prepared statement .......................................................................................... 7 Damgard, John M., President, Futures Industry Association, Washington, D.C. ........................................................................................................................ 9 Prepared statement .......................................................................................... 11 Greenberger, J.D., Michael, Professor, University of Maryland School of Law, Baltimore, MD ...................................................................................................... 17 Prepared statement .......................................................................................... 19 Gooch, Michael A., Chairman of the Board and CEO, GFI Group, Inc., New York, NY ............................................................................................................... 31 Prepared statement .......................................................................................... 32 Cota, Sean, Co-Owner and President, Cota & Cota, Inc.; Treasurer, Petroleum Marketers Association of America, Bellow Falls, VT; on behalf of New England Fuel Institute ........................................................................................ 35 Prepared statement .......................................................................................... 37 Duffy, Hon. Terrence A., Executive Chairman, CME Group Inc., Chicago, IL ........................................................................................................................... 39 Prepared statement .......................................................................................... 41 Roth, Daniel J., President and CEO, National Futures Association, Chicago, IL ........................................................................................................................... 77 Prepared statement .......................................................................................... 79 Slocum, Tyson, Director, Energy Program, Public Citizen, Washington, D.C. ... 81 Prepared statement .......................................................................................... 83 SUBMITTED MATERIAL American Public Gas Association, submitted statement ...................................... 101 Suppan, Steve, Senior Policy Analyst, Institute for Agriculture and Trade Policy, submitted statement ................................................................................ 107 Wednesday, February 4, 2009 Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, opening statement .............................................................................................................. 112 Peterson, Hon. Collin C., a Representative in Congress from Minnesota, open- ing statement ........................................................................................................ 111 Prepared statement .......................................................................................... 112 WITNESSES Masters, Michael W., Founder and Managing Member/Portfolio Manager, Masters Capital Management, LLC, St. Croix, U.S. VI ................................... 113 Prepared statement .......................................................................................... 114 (III) VerDate 0ct 09 2002 13:03 Aug 27, 2009 Jkt 041481 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 I:\DOCS\111-01\51698.TXT AGR1 PsN: BRIAN IV Page Masters, Michael W., Founder and Managing Member/Portfolio Manager, Masters Capital Management, LLC, St. Croix, U.S. VI—Continued Supplemental material ..................................................................................... 262 Short, Johnathan H., Senior Vice President and General Counsel, IntercontinentalExchange, Inc., Atlanta, GA .................................................... 132 Prepared statement .......................................................................................... 134 Taylor, Gary W., CEO, Cargill Cotton Company, Cordova, TN; on behalf of National Cotton Council; American Cotton Shippers Association; and AMCOT ................................................................................................................. 137 Prepared statement .......................................................................................... 139 Pickel, Robert G., Executive Director and CEO, International Swaps and Derivatives Association, New York, NY ............................................................. 141 Prepared statement .......................................................................................... 143 Morelle, Hon. Joseph D., Assemblyman and Chairman, Standing Committee on Insurance, New York Assembly; Chairman, Financial Services and In- vestment Products Committee, National Conference of Insurance Legisla- tors, Troy, NY ....................................................................................................... 147 Prepared statement .......................................................................................... 150 Concannon, Christoper R., Executive Vice President, Transaction Services, NASDAQ OMX, New York, NY .......................................................................... 179 Prepared statement .......................................................................................... 180 Hale, William M., Senior Vice President, Grain and Oilseed Supply Chain North America, Cargill, Incorporated, Wayzata, MN; accompanied by David Dines, President, Risk Management, Cargill, Incorporated ............................. 185 Prepared statement .......................................................................................... 187 Cooper, Karl D., Chief Regulatory Officer, NYSE Liffe, LLC, New York, NY; on behalf of NYSE Euronext ....................................................................... 192 Prepared statement .......................................................................................... 194 Cicio, Paul N., President, Industrial Energy Consumers of America, Wash- ington, D.C. ........................................................................................................... 196 Prepared statement .......................................................................................... 197 Brickell, Mark C., CEO, Blackbird Holdings, Inc., New York, NY ...................... 200 Prepared statement .........................................................................................