House Banking Committee Chairman Jim Leach bluntly explained Tuesday why he opposes the Treasury Department in the financial reform debate: Administration officials have too much interest in raising money from industry contributors.
Speaking to fellow Princeton University alumni in Washington, Rep. Leach warned that the turf war between the Treasury and the Federal Reserve Board over which becomes the lead financial regulator presents the biggest obstacle to reform legislation.
"You've got as large a battle royal between the Treasury and the Fed as our government has ever seen," the Iowa Republican said. The Treasury's position would make it "the single focal point for political fund-raising. It's one reason I prefer the Fed."
Not only is the Fed better equipped and respected internationally, "it is totally above politics in terms of fund-raising," added Rep. Leach, who personally does not accept contributions from political action committees or non-Iowans. (Rep. Leach made clear he would favor the Fed even if a Republican occupied the White House.)
Rep. Leach played down concerns that tenuous industry support for the legislation would collapse next year. "We have a bill that has really, truly reached virtual resolution" among the banking, insurance, and securities industries.
And he said that it is too early to determine whether the expected rise of Sen. Phil Gramm-who blocked the reform bill in the Senate this year-to Banking Committee chairman spells doom for reform in the next Congress.
"That may or may not matter," he said. "We don't know yet. I look forward to working with Chairman Gramm. I think he will be a very credible chairman."
Sen. Carol Moseley-Braun, the Illinois Democrat who lost her reelection bid, is one of the leading candidates to head the Commodity Futures Trading Commission, industry sources said. Two other rumored candidates are former Senior Deputy Comptroller Douglas E. Harris, who is a partner at Arthur Andersen LLP in New York, and acting Comptroller Julie L. Williams.
The embattled incumbent, Brooksley Born, is expected to leave when her five-year term ends in mid-April because of her controversial effort to regulate over-the-counter derivatives, commonly known as swaps.
President Clinton might favor Sen. Moseley-Braun because she is a liberal Democrat from the home of the Chicago Mercantile Exchange and Chicago Board of Trade. But her candidacy could create rancor because last year she blocked the reappointment of commissioner Joseph Dial, an ally of Sen. Gramm.
The Bankers Roundtable is still mulling its choice for executive director.
Rep. Bill Paxon has been pegged as the front-runner, but sources here said the New York Republican may be more interested in joining the Republican National Committee. A spokesman for Rep. Paxon, who is leaving Congress at yearend, did not return phone calls.
However, some lobbyists are wondering whether Rep. Paxon's appeal as a Republican insider has diminished because of the shake-up in the House leadership. Also, the star of former Rep. Steve Bartlett of Dallas may be on the rise because of his longtime friendship with Sen. Gramm. Other rumored candidates are former Rep. Vin Weber and Andrew H. Card Jr., who was transportation secretary under President George Bush.