|HILLARY RODHAM CLINTON'S $99,537 MIRACLE: IT'S THE PITS!!!
Troubling questions concerning one chapter from her past that is sure to dog First Lady Hillary Rodham Clinton's current campaign for the U.S. Senate seat in New York State is her astounding foray into the cattle futures market in the late 1970's and her ability to turn a $1000 investment into a quick $99,537 profit.
Her sudden acumen in cattle futures not only streched the meaning of believability, but also belied the accepted rule as to what it takes to make a small fortune in the futures market? --- start with a large one!!!
Yet, there are those who feel the price Mrs. Clinton's was ultimately forced to pay for her dabbling in the innermost workings of corporate agribusiness would be exacted years later when her husband was in the sixth year of his presidency.
In his recent book, Shadow, Bob Woodward recounts that Hillary Clinton reportedly told close friends after it was revealed that her husband had sex with a young White House intern: "I have to take this punishment. I don't know why God has chosen this for me. But He has, and it will be revealed to me. God is doing this, and He knows the reason. There is some reason." This bit of Hilliarism occasioned the Progressive Review's Sam Smith to report that "reached at his celestial headquarters, God told this reporter,`That'll teach her not to rig cattle futures'."
Today, as our nation's farmers and cattle producers find themselves ever-increasingly victimized by below-cost-of-production prices for the cornucopia of raw materials they grow, raise and harvest; prices systematically being determined not by supply and demand or the so-called "free market," but by flawed government policy, speculators, and corporate greed.
Meanwhile, taxpayers are discovering they they are being forced to pay a progressively higher, hidden and more exacting quantitative and qualitative price for the food that they consume each day.
To many the locomotive force driving this long train of economic abuses is the commodity trading pits of the nation's major future exchanges.
Although the headlines and stories that emerged from the curious trading ventures of Hillary Rodham Clinton provided the general public with a few rare glimpses into the wheeling and dealing that frequently takes place within a multi-billion dollar industry the insider manipulations, cunning, and often unsavory workings of that industry remains to many a financial enigma.
More importantly the Clinton saga provides yet another indicator in the never-ending search for an answer to the perennial question: in corporate agribusiness who wins? who loses? who profits? who pays?
As one begins to sort out the various insider schemes that were at work in the cattle futures market in the late 1970's, it becomes abundant clearer that those who reaped hundreds of thousands of dollars in a very short period of time were not the thousands of producers and millions of consumers of meat.
A "Secret Signal" Scheme
For example, Mrs. Clinton's ability to turn $1000 into a near $100,000 in ten months of futures trading, a Congressional study would learn, coincided with a period of time that a select group of executives from packing houses, grain companies, feedlot operators and commodity brokers reaped tens of millions of dollars in an "insider" trading scheme in the cattle futures market.
Like so many other business ventures in which the Clinton's have been involved in over the years there is no direct evidence available that Mrs. Clinton actually knew of the scheme in 1978-79, although she most likely profited from it.
Between February, 1978 and April, 1979 some 32 cattle industry insiders made profits of $110 million by selling cattle futures after they received some 15 "secret signals," which was followed within an average two and one half day period, by a marked drop in cattle future prices.
Then Rep. Neal Smith (Dem-Iowa), chairman of the House Small Business Committee, which released the report in February, 1981 noted that in all a total of some 1027 individuals made total net profits of approximately $156 million.
Thus, three percent of the large traders --- those with 50 contracts or more --- with correlated trading activity and\or common business affiliations accounted for 70% of the total net profits of this group of traders. Mrs. Clinton traded 50 or more contracts three times.
In later commenting on his Committee's study Rep Smith noted: "There are no rewards for honesty. This system leaves opportunities for manipulation and interplay with the futures market by those who have the information earlier than the farmer or rancher does."
A previous USDA study in 1979, for example, pointed out that during 20 of the 21 months preceding October, 1979 there was not a single day in which a farmer-feeder could have used the futures market to hedge in a profit and only five days in the remaining month that the farmer-feeder could have broken even.
Meanwhile, the eight largest packers, who at the time were slaughtering 44% of the nation's beef, held over one-half of the futures contracts and made twice as much money in the futures market as they did in trading cattle. Today, 81% of the nation's beef supply is slaughtered by just three packers --- IBP Inc., Excel (owned by Cargill) and ConAgra Inc.
In all, between February, 1978 and December, 1980, some 29 "secret signals" were given although Smith's Committee staff made no estimates on the profits earned after April, 1979.
A major participant in the "secret signal" scheme were executives and agents of REFCO, Inc., a major Chicago, Illinois trading house whose president was Thomas H. Dittmer. Dittmer, however, was not only REFCO's president, but also through a family trust was a purchaser of cattle for his two cattle feeding companies Cactus Growers, Inc. and Cactus Feeders, Inc. in which he owned one-half interest along with Paul Engler, who years later would take the national spotlight in filing a "food disparagement" suit against television hostess Oprah Winfrey and Howard Lyman, a guest on her nationally syndicated television show.
It's the Pits!
To understand how such schemes operate a quick elementary description of how the futures market works is in order.
A futures contract is simply a legally binding standardized agreement to deliver or take delivery of a given quality and quantity of a commodity at an agreed price at a specific date and place.
One who goes "short" in the market is simply synonymous with one who sells a contract, agreeing to make a delivery in a designated month. Going "long" is synonymous with one who buys a contract, agreeing to accept a delivery in a designated month.
Buying a cattle futures contract (40,000 pds. of choice grade live steers) is basically, therefore, a bet on the future value of the commodity. Although futures buying is sometimes used as a hedge by cattle ranchers, commodity buyers and sellers against future price fluctuations it is a very risky business.
There are estimates that 75% to 95% of individual investors lose money in commodity futures markets. How firms like REFCO, Cactus Feeders, Valley View Feeders, Louis Dreyfus and other large corporate agribusiness and financial interests named among the 32 gained such an advantageous "insider" position from the "secret signals" was explained by Rep. Smith.
Big commercial feedlots, grain companies and meatpackers --- who have lower production costs than farmer-feeders or can shift costs from one level to another --- would start selling their futures when the futures price exceeded their costs. Such costs, however, were still below the level of those costs which most other farmer-feeders could afford to hedge against a loss. Immediately a select number of commodity brokers and officers joined the selling and thus the combined selling pressure became so great that cattle prices immediately began to drop.
Testing this formula over a three-year period of time the House staff found a 100% accuracy rate.
The net result of this action by these "insiders" was that it placed an artificial cap on prices at the farmer-feeder break even level that in fact reflected neither supply or demand nor the prevailing cash market price for cattle.
Instead of cattle futures at the time permitting farmer-feeders to shift price risks by hedging in futures, the market put them at an exaggerated disadvantage to the big commercial feedlots such as Cactus who could hedge at the lower cost level. In 20 of the 29 price drops, Rep. Smith, reported, cash market cattle prices either stayed the same or went up. "This is strong evidence that the futures prices are artificial and not reflecting supply-demand conditions."
With Friends Like Blair and Bone Why Worry?
Although neither Mrs. Clinton's broker Robert L. "Red" Bone or her principal advisor and long-time close family friend James Blair were among the identified 32 beneficiaries, it is known that both Blair and Bone at this time made millions in the cattle futures market.
Testifying later in a Fayetteville, Arkansas U.S. District case against REFCO, Blair acknowledged that Bone "convinced me that [REFCO] knew more about the cattle market than anybody alive, and that they had inside information about the cattle market and that there was a great fortune to be made in cattle."
Surprisingly, trading on "inside" information was not against the law in the commodities market at that time.
Blair also has testified that he learned of REFCO's "inside information" in the cattle market by listening to daily conference calls in REFCO's Springdale, Arkansas office. Participating in these calls, according to Blair, were brokers from REFCO's Springdale, Memphis, Tennessee and Chicago offices, as well as feed lot owners and other major cattle industry representatives.
Questioned as to whether these individuals tried to guess the direction cattle prices would take on the following day, Blair responded: "I don't know as I'd go along with the word `guess.' Sometimes they were going to help it along, but certainly they wanted to see the market go up or go down . . . There wasn't any money to be made if it didn't move.
Also testifying several years later in a suit against REFCO, Hayden MacIlroy said he entered the cattle futures market in May, 1978 in part of the advice of Blair. "I got the opinion from him that he was high on REFCO, he thought the concept that REFCO controlled the cattle market, that they were the biggest cattle trader . . . that everybody in the organization traded together would work."Blair has since denied he told MacIlroy that REFCO controlled the market.
In his book on Bill Clinton, First In His Class, journalist David Maraniss describes Blair's passion for trading.
"Blair could have kept the branch office in business almost by himself. >From the time he started buying and selling cattle futures in March, 1978, after determining that REFCO had an inside track on where the cattle market was going, he was trading enough to pay REFCO an average of $50,000 a month in commissions. There is an old Arkansas saying that even a blind hog finds an acorn once in a while, but Blair was counting on anything but blind luck.
"He maintained a special computer program at his office that analyzed the market averages over four-day, nine-day and eighteen-day periods. Within easy sight on his desk stood a quote machine, a stock ticker, that allowed him to watch the market all day, `tick by tick,' as he once put it. He had a telephone at his side at all times, in his car, in his airplane, to ensure that he would never be out of position to make a necessary trade.
"At two-thirty every afternoon," Maraniss continues, "he was allowed to listen in on a conference call coordinated by REFCO that included cattle buyers, feedlot operators, Chicago pit traders, and REFCO's Las Vegas-based president, John Dittmer. At its best, his formula of information and intuition brought in more than a half-million dollars in less than a two-week span."
Initially Mrs. Clinton took the credit for not only putting up her own money, but also for determining the time to make her own trades by carefully studying the commodity reports in the Wall Street Journal. Subsequently she later acknowledged that it was Blair who largely directed her trades. Blair, recently retired as chief legal counsel for the $4 billion-a-year Tyson Foods Inc. Bone, Tyson's former chief commodity trader, became a broker for REFCO Inc. in 1975 and became so successful that in 1979 alone earned profits for his customers estimated between $20 and $30 million.
Arkansas's Chicken Empire
In the late 1980's Tyson's, with headquarters in Springdale, during the administration of then Arkansas Governor Bill Clinton would receive $7 million in state tax credits. The appointment of one of its staffers as state livestock and poultry commission, and what critics have charged was the relaxation of numerous state environmental standards which ultimately benefited Tyson's. Critics have also speculated as to whether Blair's role in directing Hillary Clinton's $1000 into a near $100,000 windfall was in effect a surreptitious Clinton campaign contribution.
A Tyson spokesperson would later claim that the aforementioned tax credits "were earned, not given to Tyson Foods by Bill Clinton or the State of Arkansas." Don Tyson, the company's president and CEO, who is both Blair and Clinton's long-time personal and political friend, has likewise through the years been a generous contributor to Clinton's state and national political campaigns.
A long-time confidant of Mrs. Clinton and political operative for her husband, Blair was also a principal financial advisor to the Clintons in the now famous Whitewater real estate land development project. It was also Blair who recommended "Red" Bone to Mrs. Clinton.
Tyson Foods, the nation's number one poultry producer, pled guilty in December, 1997 to giving former USDA Secretary Mike Espy more than $12,000 in illegal gratuities. The Arkansas-based poultry giant and long-time personal and financial FOB (Friend of Bill) agreed to pay a $4 million fine, contribute $2 million to Independent Counsel Donald Smaltz's investigation and cooperate in his probe.
As an aside, neither that story nor the story concerning ADM, "Supermarkup to the World," pleading guilty and being fined $100 million for fixing the prices of food-ingredients lysine and citric acid while three of its former executives were found guilty of similar charges got the attention from the nation's press that they so richly deserved, least of all from the Public Broadcasting Service and National Public Radio. One only need, however, to delve a little behind the scenes to understand the reasons for this head-in-the-sand approach to the two stories.
A major underwriter for PBS programming, primarily the nightly "Jim Lehrer Report," is ADM headed by Dwayne O. Andreas, a major financial contributor to both the Republican and Democratic Party powerful. And thanks to help from colleague Sam Smith we get a much clearer picture as to why all the "news of the day" is becoming such a rare commodity in our corporatist ruled "public broadcasting" culture.
Chairperson of the Corporation for Pubic Broadcasting which funds NPR and PBS is one Diane Blair, whose maiden name was Diane Divers Kincaid.The name of the "official" who married Kincaid and James Blair in 1979 was William Jefferson Clinton.The name of James Blairs' "best person" at his and Diane Divers Kincaid wedding was Hillary Rodham Clinton.
In 1972 Bone, Tyson's, Don Tyson and a half dozen other parties were accused of manipulating the egg futures market. Although the case was settled in 1977 before the Commodity Futures Trading Commission (CFTC) with no admission or denying of guilt, Bone was suspended for a year.
A month before, Mrs. Clinton entered the commodities market Bone completed his one-year prohibition. The CFTC, however, would later discipline him a second time, fining him $100,000, a one-year revocation of his broker's license and a three-year personal trading prohibition for violating the terms of his original prohibition by trading quite profitably through another broker's account.
Lawyer Clinton, according to a senior White House aide, was "unaware" of Bone's problems at the time, although her confidant Blair, Bone's long-time friend and attorney, had been representing the broker in numerous regulatory and other legal proceedings besides having a state-wide reputation in Arkansas as a free-wheeling inveterate gambler.
"Load the boat," and "Mortgage the farm," and "Get long the cattle"
The aforementioned secret signal scheme, however, was not the only one in operation at this period of time and may have in fact setup an even more lucrative scheme by which many of these same insiders would realize millions of dollars in profits while the cattle market was all but collapsing.
This second insider manipulation was later to become the subject of several customer law suits alleging fraud and manipulation by REFCO and its president Dittmer. At this time, according to CFTC records Paul Engler was likewise listed as a REFCO "account executive."
REFCO would become the defendant in a suit by some 15 cattle ranchers, alleging violations of the Commodity Exchange Act, the Racketeer Influenced and Corrupt Organization Act (RICO) and the Sherman Anti-Trust Act in connection with transactions in the cattle futures market. In each case a lower district court jury found in favor of the plaintiffs, but on appeal by REFCO and Dittmer the Eighth Circuit U.S. Court of Appeals reversed all the judgments and found in favor of the defendants.
In rather unusual judgments, rather than addressing the issue of whether relevant laws had been broken, the Court of Appeals concluded that the evidence presented in each case to the juries was insufficient to support the jury verdict on any of the counts. Such rulings came despite the fact that the Eighth Circuit Court had previously ruled that on appeal from a jury verdict the Court was "not free to weigh the evidence, to pass on the creditability of witnesses or to substitute our judgment for that of the jury."
Despite the Eight Circuit Court's view, however, compelling and collaborative testimony presented in each of the cases not only raised serious questions about how well the cattle market was functioning at the time, but who and how it was being manipulated.
What was alleged was that Dittmer and REFCO bought contracts in the May, 1979 feeder cattle market and in the June and August, 1979 live cattle market, thereby acquiring the right to obtain a large number of cattle that would be ready for delivery in the October, 1979 market. In April, 1979 wholesale beef prices reached record levels while the live cattle future price on the Chicago Mercantile Exchange (CME) shot up to a high of $80.25 compared with $76.80 in March.
As Mark Hosenball would report a year later in Supermarket News it was during this time that reports began to appear in Chicago that there had been an unusual large number of April live cattle contracts outstanding in late March and that REFCO's customers held large positions.
The CME was quoted at the time as acknowledging that REFCO and its customers did indeed hold large positions, but that they were mostly hedgers and not concentrating either on the long or short side of the contracts. Nevertheless, both the CFTC, the PS&A and the USDA opened an investigation into this unusual activity.
Rep. Benjamin S. Rosenthal (Dem-N.Y.) later that summer would charge that the holding of such large positions was part of a scheme to artificially depress the wholesale beef price at the time, then run it up again, collecting quick profits on the futures market for individual traders.
Hosenball also later noted that "whatever the extent of the government investigations, however, sources close to the Exchange say three REFCO traders --- its president [Dittmer], and two other officials, Charles McVean and Robert Bone --- were suspected of having controlled as many as 15,000 long April, 1979 live cattle positions for several weeks in April, by not properly following exchange position limits for individual traders."
Meanwhile, in order to increase the price of the October futures contract, Dittmer was reportedly and repeatedly urging REFCO brokers and customers to also take long positions in the October and December, 1979 live cattle contract market by representing to them that there would be a significant price increase in the cash price of cattle for those months.
Numerous witnesses would later testify that they heard Dittmer on the REFCO hotline to the Springdale, Arkansas office repeatedly make statements such as "load the boat," "mortgage the farm," "get long the cattle" and similar statements during this period of time.
On October 2, Dittmer and REFCO suddenly closed out their long positions and began selling contracts at the same time they began making massive deliveries of their cattle in the market in addition to tendering notices of intent to deliver even larger numbers of cattle.
Kidnapping a Giant Industry
Dittmer, it is worth remembering was also a purchaser of cattle for his and Engler's Cactus Growers, Inc. and Cactus Feeders, Inc. Today Cactus Feeders, under the directorship of Paul Engler, is the largest feedlot operation in the U.S. supplying fed cattle to both IBP and Excel.
In 1972, years before he would begin operating Cactus Feeders, Engler became a group vice-president at Iowa Beef Processors (now IBP) in charge of the company's carcass division.At the time Engler joined Iowa Beef Processors and served on its board of directors the company was immersed in one of the major corporate scandals of recent years.
The origins of the scandal involved the company's board chairman, the late C.J. Holman, who was later convicted for conspiring with an organized crime figure to bribe the company's way into the world's largest meat market --- the New York City metropolitan area --- through a series of kick-back payments to both union officials and supermarket executives.
In Vicious Circles: The Mafia in the Marketplace, (W.W. Norton & Co. , New York: 1979) a remarkable piece of investigative journalism, former Wall Street Journal reporter Jonathan Kwitny, describes this "anatomy of a bribe."
"Iowa Beef, though founded only in 1961, already in 1970 dominated the meat industry the way few other industries are dominated by anyone. Since then, in partnership with [Moe] Steinman and his family and friends, Iowa Beef has grown more dominant still. It was as if the Mafia had moved into the automobile industry by summoning the executive committee of General Motors, or the computer industry by summoning the heads of IBM, or the oil industry by bringing Exxon to its knees. Moe Steinman and the band of murderers and thugs he represented had effectively kid-napped a giant business. Its leaders were coming to pay him the ransom, a ransom that turned out to be both enormous and enduring."
"As a result of the meeting in the darkened suite at the Stanhope Hotel [in New York City] that day in 1970, Iowa Beef would send millions of dollars to Steinman and his family under an arrangement that continued at least until 1978. After the meeting millions more would go to a life-long pal of Steinman and his Mafia friends, a man who had gone to prison for using slimy, diseased meat in filling millions of dollars in orders [by bribing meat inspectors] and wound up on Iowa Beef's board of directors.
"Consequent to the meeting in the Stanhope Hotel, Iowa Beef would reorganize its entire marketing apparatus to allow Steinman's organization complete control over the company's largest market and influence over its operations coast-to-coast. In 1975, Iowa Beef would bring Moe Steinman's son-in-law and protege to its headquarters near Sioux City to run the company's largest division and throw his voice into vital corporate decisions."
"Because of their hold on Iowa Beef, the racketeers' control of other segments of the meat industry would expand and harden. And as a result of all this, the price of meat for the American consumer --- the very thing Currier Holman had done so much to reduce --- would rise. Meyer Lansky once said that the Syndicate was bigger than U.S. Steel. When Iowa Beef Processors caved in on that April day in 1970, the Syndicate, as far as the meat industry was concerned, became U.S. Steel."
Almost a year after Holman was convicted, in August, 1975, Engler also left IBP and its board of directors because, in the company's words, he and other company officers opposed a conflict-of-interest policy that would restrict company officers "from any outside business activity" which isn't "considered to be in the best interest of the company or its shareholders, including . . . personal commodity trading and other areas." IBP said that its board believed that such activities as "personal commodity trading" could constitute a conflict of interest particularly for "those involved in the buying and selling of cattle."
Engler, after leaving Iowa Beef, co-founded Cactus Feeders Inc. with partner Tom Dittmer. "I learned an awful lot at IBP," Engler would later comment. "However, I had spent too much time in my life keeping cattle alive to enjoy killing them."
"A great fortune to be made in cattle"
In their suit the cattle ranchers contended that Dittmer and REFCO's actions immediately created artificially low prices in the October, 1979 futures contract market in two ways.
First, Dittmer's repeated recommendations to REFCO's brokers and customers from April to October --- that they buy contracts because he believed the futures price would increase --- in fact was false and designed to increase artificially the price of October futures so as to enable Dittmer to unload his own open futures contracts in that month at a higher price. Such recommendations had the effect of increasing the price for October futures contracts.
Second, in addition, Dittmer's delivery of a large amount of cattle on October 2 and 3 artificially lowered the futures price and unduly depressed cattle prices, which continued to fall thereafter.
The ranchers further charged that Dittmer first unloaded his cattle, many of which came from his and Engler's yards, at high prices and then depressed the price by selling his contracts, and that as a result, many ranchers received lower than normal prices when they subsequently sold their own cattle. Contrary to normal conditions, the number of deliveries into the futures market in October, 1979 was four times greater than it was in the next largest comparable delivery month, and was at that time the largest such number of deliveries ever.
In the customer lawsuits, Dittmer was also alleged, because of his aforementioned representations to take a long position, to have created an artificial high demand for cattle future contracts. This allowed Dittmer to close out his own long positions and establish short positions just when the market peaked. Thus, ignoring his fiduciary responsibility as a broker, Engler's business partner proceeded to trade precisely opposite the advice he had been giving to many of his clients for several months.
One of those individuals was Ed Apel, REFCO's chief CME floor trader, who as late as 12:15 p.m. on October 2 was advised by Dittmer that "December cattle are dynamite" and that all REFCO brokers and customers should hold their long positions. At that time, accounts clearing through Engler and his fellow REFCO "account executives" held over 50% of the long side of the October, 1979 live cattle contracts at the CME.
By 12:45 p.m., when the market closed for the day, Dittmer had closed out his long positions and was delivering large numbers of cattle thus enabling him to register a more than $1 million profit by the end of the day while his customers and unscored numbers of cattle ranchers were suffering huge monetary losses.
It is unknown whether Hillary Rodham Clinton at any time had investments in October and December, 1979 cattle futures as she quit trading in her REFCO account in July, 1979.
Behind Locked Doors
Later testimony, during the various suits against Dittmer, revealed that other questionable practices such as trade allocations, backdated trades and margin waivers were prevalent at the time that Mrs. Clinton was in the commodity futures market.
For example, Bone and others, based on evidence introduced in court, would place trades in REFCO house accounts then later distribute them to specific customers. Blair and others have testified that trades weren't allocated often until after the CME closed for the day.
USA Today's Bill Montague and Kevin Johnson reported that two Springdale brokers, Bill McCurdy and Steven Johns, testified that they participated in a cover-up of Block trading in the Springdale office on June 27, 1979.
McCurdy and Johns told how they were told to lock the office doors after the market closed, set back the clocks used to time stamp trade orders and prepare phony customer order slips that could be substituted for the block orders actually placed during the day.
June 27 was also the day that Mrs. Clinton opened a trade that initially would lose her $26,640, but within three days would earn her profits of $10,000 and $43,760 --- her single most profitable commodities trade. It is also one of the three days in which the White House claimed it could not locate Clinton's daily trading statements.
This same day, based on CME disciplinary records obtained by the Wall Street Journal, Bone and another Springdale office broker exceeded the speculative-position limit in feeder cattle future contracts by selling short a total of 1443 contracts violating the 300 contract limit. Exchange officials later speculated that the sale was an attempt to manipulate the market.
Additional court testimony has shown that Bone frequently waived margin calls for certain customers, in effect loaning them money to maintain their accounts.Records of Mrs. Clinton's account show she was frequently allowed to avoid posting margin, including her June 27 trading venture. For example, the first day she entered the cattle futures market On October 11, 1978, less than a month before her husband would be elected Arkansas's governor, she ordered ten contracts with her $1000, which normally would require a $12,000 investment.
On July 12, 1979 her account showed a $61,000 loss and although REFCO's house rules dictated that she should have been required to add $92,364 to avoid having her account liquidated, no required deposit is shown on her records. Such a waiver allowed her to wait until the market turned in her favor and ultimately allowed her to realize a $24,631 profit.
After Mrs. Clinton closed out her REFCO account on July 23, CME records reveal that its staff recommended on September 11 that the brokerage house be disciplined "by reason of [REFCO's] allowing accounts to continuously trade in excess of speculative limits."
Three months later both Bone and Dittmer agreed to personal trading suspensions for "serious and repeated violations of record-keeping functions, order-entry procedures, margin requirements and hedge procedures."
For its part, REFCO paid a fine of $250,000, which at the time was the largest penalty ever assessed for commodity-trading violations. In 1983 another record $525,000 fine was levied by the CFTC against REFCO and Dittmer for violating speculative limits in cotton, soybeans, corn and wheat futures contracts in 1979-80.
Although Mrs. Clinton denies knowing about any of these trading abuses it is clear from court testimony many other Springdale REFCO clients, including her long-time friend and financial advisor James Blair, knew about such practices and hoped to profit from them.
Throughout this whole period, with the cattle futures market so blatantly being manipulated by a select group of insiders it is clear that the public interest was not being served by either the futures industry itself or those institutions designed to protect the public from such financial shenanigans.
The "Chicago Mirage" and the "Sleeping Pygmy"
The nation's major commodity exchanges, including the Chicago Mercantile Exchange (where cattle futures are traded) and the Chicago Board of Trade (where all other agriculture commodities are traded) have frequently come under considerable criticism for the manner in which they conduct their business and for their lack of self-regulation.
To many of their critics they have become, in effect, closed societies similar to the very same corporate customers which trade on their floors. Thomas Eagleton, former U.S. Senator from Missouri and an ex-CME governor once termed the regulation of futures trading a "Chicago mirage" and "something of a myth." In appealing for tougher federal oversight of the exchange he also characterized the CFTC as a "sleeping pygmy."