The Bush administration’s proposal to tax commodity futures transactions brought loud complaints last week from Chicago exchanges and U.S. Sen. Dick Durbin (D-Ill.).
The tax, included in Bush’s proposed fiscal 2003 budget, would generate about $33 million in 2003 for the industry’s regulator, the Commodity Futures Trading Commission. It would raise an estimated $66 million annually thereafter.
Chicago Board of Trade officials told members they will fight the measure the same way they did when it was proposed by the Clinton administration in 1995.
“Our efforts will be intensified to educate the Congress on this misguided concept,” CBOT Chairman Nickolas Neubauer and CEO David Vitale wrote in a letter to members.
The tax would put regulated exchanges at a disadvantage to the growing array of non-regulated competitors, exchange officials said.
Chicago Mercantile Exchange Chairman Scott Gordon and CEO James McNulty wrote a similar letter condemning the proposed tax.
One lawmaker who does not need to be convinced is Durbin, who vowed to block the tax, calling it “disastrous” for commodity exchanges in Chicago and New York.
In a letter to Bush last week, Durbin called on the administration to drop the proposal.
In a statement, Durbin emphasized the competitive disadvantage for regulated exchanges. “It will drive investors away from our regulated markets to overseas exchanges or into the world of over-the-counter derivative trades–the same unregulated arena where Enron worked its fraud on the American public,” he said.
New presence in D.C.: Bank One Corp. said last week it has hired Victoria “Penny” Rostow as head of federal government relations and Washington counsel. Rostow will direct federal legislative and regulatory policy matters for the Chicago-based bank and head its federal government relations office, scheduled to open in March.
Rostow most recently practiced law at Gibson, Dunn & Crutcher LLP and was deputy assistant secretary of the treasury for legislative affairs and public liaison for banking and domestic finance. She will report to Christine Edwards, Bank One’s chief legal officer.
Bank One has not had a major presence in Washington since Annie Hall left the company in March 2000. Hall had been one of the most vocal bank lobbyists in Washington, and helped build the company’s political action committee into the largest bank industry PAC in the United States.
In May 2000, Hall sued the Chicago bank and two officials for $15 million, alleging age and sex discrimination. No trial date has been set for the case.
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In the meantime, Hall has launched Hard Money Inc., a Columbus, Ohio, firm that establishes and builds corporate PACs.