Big-time Baltimore Democrat Gary Gensler faced tough questions at his Senate confirmation hearing this afternoon about Clinton administration opposition to regulating private derivative contracts in the late 1990s.

Gensler is President Barack Obama's nominee to head the Commodity Futures Trading Commission, a relatively obscure independent agency that has been dragged into the debate over the causes of the global financial crisis.


Under questioning from Senate Agriculture Chairman Tom Harkin, a populist Democrat from Iowa, Gensler said that "looking back now" it is clear to him that the Clinton administration "should have done more to protect the American public."

Top Clinton officials, including Lawrence Summers, who was a Clinton Treasury secretary and now is the Obama administration's top economic strategist, favored financial deregulation in the late 1990s. During that period, the Clinton team fought efforts by the CFTC to regulate private derivative contracts.

A decade later, "I very much would say that my views have evolved," said Gensler. He now favors giving the agency that he would head more authority, including the regulation of the estimated $28 trillion market in credit default swaps and other financial derivatives.

Between 1997 and 2000, Gensler was a senior Treasury official overseeing financial markets and domestic finance. For 18 years before that, he worked for Goldman Sachs, amassing a personal fortune currently estimated at more than $15 million.

Questions about Gensler's views concerning the Clinton administration's opposition to regulating complex financial instruments overshadowed another issue involving the future of the CFTC: whether the Obama administration will decide to put it out of business by merging it with the Securities and Exchange Commission in its effort to overhaul financial regulation.

In his testimony, Gensler appeared to side with members of the Agriculture committee, who strongly oppose a merger, since it would likely remove them from their current role in overseeing the CFTC--and the lucrative campaign donations that go with it.

Gensler knows more than a few things about campaign money. A past treasurer of the Maryland Democratic Party, he was a major fundraiser for Hillary Clinton's 2008 presidential campaign. After her campaign ended, he switched to Obama and later became a key transition adviser.

His nomination drew an all-star cast of Marylanders to today's hearing. He was praised lavishly by the state's two sitting Democratic senators, Barbara A. Mikulski and Benjamin Cardin. Former Sen. Paul S. Sarbanes came out of retirement to add his enthusiastic endorsement for Gensler, who helped craft the Sarbanes-Oxley accounting reform law as an advisor to Sarbanes in 2002.

A vote on Gensler's nomination may not come until early next week, a committee aide said. He appears to be headed for confirmation, however. The senior Republican on the Agriculture panel, Georgia Sen. Saxby Chambliss, issued a statement at the start of today's hearing endorsing Gensler for the job.