A new U.S. senator whose spouse both runs and owns a minority stake in a major exchange operator will help oversee one of the company’s main federal regulators, setting up a potential conflict of interest.
Republican leadership assigned interim Sen. Kelly Loeffler (R., Ga.), whose husband, Jeffrey Sprecher, is chairman and chief executive of
Intercontinental Exchange Inc.,
to serve on the Senate Agriculture Committee.
The committee oversees the federal Commodity Futures Trading Commission, which regulates markets for derivatives that trade on ICE exchanges. The committee also oversees agriculture, logging, forestry and nutrition programs.
“I have worked hard to comply with both the letter and the spirit of the Senate’s ethics rules and will continue to do so every day,” Ms. Loeffler said in a statement. “I will recuse myself if needed on a case by case basis.”
Agriculture Committee Chairman Pat Roberts (R., Kan.) said in a statement Tuesday that Ms. Loeffler, who was raised on a farm in Illinois, is “a welcome addition to the Committee, and I look forward to her participation.”
Gregory Gelzinis, a policy analyst at the Center for American Progress, a liberal think tank, called her committee assignment “a cause for concern.”
“It’s particularly important for her to either say that she’ll be recusing herself from that piece of the ag committee’s jurisdiction or providing some sort of clear commitment to the public that this isn’t going to get in the way of her conducting official business,” he said.
ICE owns the New York Stock Exchange in addition to a host of other platforms around the world where assets ranging from crude oil and cocoa futures to credit-default swaps are traded. It is the second-largest exchange operator by market capitalization, after
Ms. Loeffler and Mr. Sprecher were married in 2004. Regulatory filings show that Mr. Sprecher owns a 1.1% stake in ICE that is worth almost $600 million, based on its current market price.
She joined ICE in 2002 and ran the company’s investor relations, communications and marketing for 15 years before becoming chief executive of Bakkt, a cryptocurrency trading platform owned by ICE.
CFTC Chairman Heath Tarbert said last year that he believes bitcoin, the best-known cryptocurrency, falls within his agency’s jurisdiction.
Ms. Loeffler’s appointment comes at a time when the agriculture committee is working on legislation to reauthorize the CFTC. The committee’s oversight functions also include approving nominations for CFTC commissioners.
According to its annual report, a number of ICE’s exchanges are “subject to extensive regulation by the Commodity Futures Trading Commission.” In addition to day-to-day oversight and enforcement, the CFTC’s rule-making agenda can have a major impact on the company’s operations.
The CFTC is overseen by the agriculture committees in the Senate and House of Representatives because futures exchanges were originally founded in the 19th century as marketplaces for wheat and other agricultural commodities. Politicians from farm states have retained their role in CFTC oversight even as those exchanges evolved and the agency gained jurisdiction over a broad array of complex financial markets.
Ms. Loeffler was chosen late last year by Georgia Gov. Brian Kemp to fill the seat left vacant by Johnny Isakson, who retired because of ill health.
Write to Paul Kiernan at email@example.com