Tom Williams/CQ Roll Call via AP Images
Rostin Behnam, right, chairman of the Commodity Futures Trading Commission, and Sen. Tommy Tuberville (R-AL) talk before a Senate Agriculture Committee hearing on Capitol Hill in Washington, December 1, 2022.
The Revolving Door Project, a Prospect partner, scrutinizes the executive branch and presidential power. Follow them at therevolvingdoorproject.org.
Amidst his push to loosen regulations on Wall Street derivatives trading, Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam is rumored to be eyeing a job outside of government. There is speculation that Behnam, who has spent most of his career in government, is considering leaving the CFTC years before his term expires to pursue a job in the private sector. Top regulators make good money by any objective standard, but Behnam’s salary is a pittance compared to what he could make lobbying, consulting, or working directly for industry. After all, half the point of spending the better part of a decade pushing a weakened regulatory environment is laying the groundwork for a post-office buckraking career.
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And push deregulation Behnam has. Despite a Vanity Fair puff piece from 2019 that presented Behnam as a rogue Trump official willing to defy the Republican Party for the good of the world, in fact, Behnam occupied a seat reserved for Democrats by statute, where he has been a consistently conservative force. Under Trump, he gleefully worked with his Republican colleagues to enact their lax agenda. Under Biden, he was nominated and confirmed to lead the commission and has maintained that posture by pushing weak rules on financial derivatives, cryptocurrency, and carbon offsets. As such, it is unsurprising that Behnam has become a favorite for industries seeking a friendly regulator, and perhaps, a new employee.
Given the numerous businesses Behnam has helped throughout his time at the CFTC, it’s difficult to predict with confidence precisely where he’ll end up accepting a position. Therefore, we at the Revolving Door Project have used our experience and expertise to draw up an odds book for Behnam’s likely post-government employers.
We do have to note that Behnam did, correctly, side against political gambling markets posing under the guise of derivatives trading. As a result, readers may struggle to find a bookmaker willing to take their bets on this particular issue.
Big Banks/Derivatives Market—3:2
It may seem unseemly for the CFTC chair to go directly to work for the firms trading in the commodities he was recently regulating, but let’s be honest, this happens all the time in Washington.
With Behnam facing major pushback from Democratic senators and fellow Democratic CFTC commissioners for his latest proposed rule—which would relax margin requirements and allow for riskier assets to be used as collateral for swaps deals—his popularity with the Big Four banks that dominate the derivatives market is at an all-time high. Who better to bring aboard your team than an ostensible Democrat who has used his position to pass Republican priorities? A Biden appointee who’s passed Trump priorities is a five-tool prospect in the world of government affairs, and the big banks will always have cap space for someone like him.
Also, it’s not like Behnam would be the first Democrat to take this road. He’d follow in the footsteps of half the Obama administration. And working for the derivatives industry wouldn’t carry the same social stigma that, say, joining a crypto firm would.
BigLaw Firms Like Skadden, Sullivan & Cromwell, or Gibson Dunn—5:2
Seeking a similar cash payout to a Wall Street firm without the clear corruption of having Citibank sign your paycheck? Look no further than BigLaw. As a lawyer with significant experience in both the legislative branch and the CFTC, Behnam could field offers from multiple law firms with significant D.C. practices. The veneer of separation between the client and the lawyer is often enough for those unable to stomach the conflict of working directly for the industry they used to regulate, which makes this another solid bet. Moreover, legal services and representation provide a convenient facade for those with limits on their post-government employment.
A Cryptocurrency Firm—5:1
Behnam is also a favorite of the crypto industry. Despite reeling from countless allegations of fraud, money laundering, and other white-collar crimes, and with most of the biggest crypto companies either bankrupt or under federal investigation or both, the industry still has significant influence in D.C. and is continuing to push for its main policy objective: to make the statutorily weaker and significantly understaffed CFTC the premier regulator of digital assets. Behnam has been a key player in this push, distorting existing regulatory authority allocations to advocate for expanded CFTC authority. Behnam even testified before Congress that the Digital Commodities Consumer Protection Act—authored by his former boss, Sen. Debbie Stabenow (D-MI), with behind-the-scenes support from Sam Bankman-Fried—would help crack down on crypto’s rampant fraud. Perhaps the crypto industry thinks he deserves a payout for his top-tier performances, including the time that he feigned a complete lack of understanding of why Sam Bankman-Fried would want Behnam’s CFTC to regulate FTX.
While SBF may be behind bars and FTX a smoking crater, there are still multiple places that could seek Behnam out. There’s the Blockchain Association, a crypto industry group, as well as Coinbase, the world’s second-largest crypto exchange that’s currently in a court battle with the SEC. And Binance, the world’s largest crypto exchange, happens to be missing a CEO after Changpeng Zhao resigned as part of a deal with the Department of Justice. Maybe they’ll take Behnam’s résumé into consideration?
A Carbon Offset Firm—7:1
Behnam has long been forthright about the severity of the climate crisis and the need to take swift action. But his embrace of voluntary carbon offset markets, which purportedly enable corporations to “cancel out” their planet-heating emissions by investing in ostensibly green projects, is worrisome. Study after study after study has exposed the worthless—if not harmful—nature of carbon credits purchased by fossil fuel companies and other major polluters. Protected forests are going up in flames and human rights are being trampled as land is cleared to make way for outdated mega-dams (which are meaningless from a carbon accounting perspective because they don’t yield additional reductions in greenhouse gas pollution), all while emissions continue to soar and Big Oil moves forward with its life-threatening plans to expand drilling.
Behnam is well aware of the greenwashing that pervades the buying and selling of carbon credits. As he said last month at a conference hosted by Georgetown University: “The problem in this market is there’s no integrity, there’s no regulation, there are questions about scientific methodology and how you are in fact calculating the sequestration and whether or not it’s accurate and is in fact impactful.” In other words, the market is riddled with fraud, and it’s nearly impossible to tell if offsets actually take up any carbon at all.
But rather than arriving at the logical conclusion that carbon offsets are, at the very minimum, not something we can possibly rely on to hit our climate goals, Behnam concluded that “in order to wean ourselves off [fossil fuels] but simultaneously hit these net-zero targets, you’re going to need these offsets.” Apparently, no amount of evidence that 21st-century indulgences aren’t working is sufficient.
One might argue that, given the CFTC’s jurisdiction over futures contracts associated with carbon credits, Behnam has no choice but to issue guidance on the matter, which he did during the COP28 climate conference, and to crack down on manipulation. Stringent regulation is welcome, but if the entire market is fraudulent, then Behnam should make that case instead of opting only to legitimize it. From corporate America’s standpoint, if regulation of this industry is imminent, who better to hire than a CFTC chair who is known for his climate bona fides?
Behnam could soon field an offer from Verra, the world’s largest carbon credit certifier, which is likely looking for good PR after damning research found that 94 percent of the rainforest offsets it sells are junk. An intelligent carbon credit company may learn from its crypto counterparts and preemptively seek out regulation in order to shape it to their benefit. Behnam would be the ideal candidate for such a task.
The Trump Administration—50:1
Not only has Behnam voted with Republican CFTC commissioners Summer Mersinger and Caroline Pham to weaken rules governing swaps, but he even kept in place three Republican division heads appointed by former President Donald Trump: Clark Hutchison, director of clearing and risk; Tamara Roust, director of data; and Suyash Paliwal, director of international affairs.
Behnam’s support for Paliwal looks even more egregious in light of a 2020 rule change eliminating registration requirements for cross-border swap activity. Behnam actually voted against the rollback, and yet he still greenlighted a Trump-appointed official who was part of the rulemaking process.
Still, a second Trump term is shaping up to be more like the Pinochet dictatorship than his first term, if his public statements are any clue. It could be that Behnam thinks he’s going to win in 2024 and is angling for a job in his administration. The odds are long and it wouldn’t come with a pay raise, but maybe Behnam is looking further ahead and anticipating more lucrative landing spots down the road.
Big Onion—200:1
Definitely the most outlandish prediction on the list, but onions are the only agricultural product to be statutorily banned from futures trading thanks to a scheme by two financiers in the 1950s who used onion futures to temporarily take monopolistic control over the American allium market. Who better than the chair of the CFTC to head up an effort to reverse this law?
Conclusion
Although Behnam’s five-year term as CFTC chair isn’t up until mid-2026, he has cultivated numerous cash-out opportunities should he opt for an early exit through the revolving door. Whatever his post-government employment turns out to be, Behnam’s soft-touch approach to the industries he has regulated should be a lesson to Democratic leaders going forward: Appoint regulators who are committed progressives so that you don’t have to worry about them joining the dark side and making your life harder.
