Wednesday, September 7, 2011

Brooksley Born

Today's Awesome Woman is Brooksley Born, lawyer and former Chair of the United States Commodity Futures Trading Commission (CFTC) during the Clinton Administration. She is primarily known for having strongly warned the administration, including Alan Greenspan himself, about the dangers of leaving the derivatives market unregulated. The administration brushed off her concerns, which, by 2008 were thoroughly vindicated when the United States economy effectively collapsed upon itself under the weight of bad derivatives that had been sold at AAA rated investments. See, e.g., Frontline, The Warning:

After graduating from high school at the age of 16, Born majored in English at Stanford University and graduated in 1961. She initially thought to study medicines, but chose law school instead after a Stanford guidance counselor opined that a woman who wanted to be a doctor instead of a nurse could have "no sincere interest in healing."

Law school turned out to be an excellent fit: Born became the first female student ever to be named the president of the Stanford Law Review, received the Outstanding Senior Award, and graduated at the top of her class in 1964. After clerking for the D.C. Circuit Court of Appeals and working as a research assistant for Professor Alan Dershowitz, she began practicing international financial law as an associate at Arnold & Porter, where she represented clients in arbitration and court cases involving complex multinational financial transactions. She made partner at Arnold & Porter despite having mommy-tracked to part time while raising her children. She also managed to do extensive work to open the legal profession to other women and to address and reform aspects of American law's inequitable treatment of women. (quote from wikipedia: "Born was among the first female attorneys to systematically address inequities regarding how the laws treated women. Born and another female lawyer, Marna Tucker, taught what is considered to have been the first “Women and the Law” course at Catholic University’s Columbus School of Law. The class exclusively concerned prejudicial treatment of women under the laws of the United States, past and present.[7] Born and Tucker were surprised to discover that there was no textbook on the issue at the time. Born is also one of the co-founders of the National Women's Law Center"). She co-founded the ABA's Women's Caucus, became the first female member of the ABA's committee on the federal judiciary, and testified before Congress concerning the ABA's determination of the fitness of judicial nominees. Id.

U.S. President Bill Clinton initially considered Born for the office of Attorney General but ended up appointing her to chair the CFTC. In that capacity, she became increasingly concerned about the lack of transparency regarding so-called derivative swaps traded between banks and insurance companies with little to no regulation. The CFTC sought to regulate these transactions but were vehemently opposed by Alan Greenspan, Larry Summers, and Robert Rubin. Id.

Born did not succeed in persuading the administration to regulate the derivatives market, leaving it to the laissez-faire policies of Greenspan and Summers with disastrous results. See, e.g. The Warning and also Inside Job (2010)

In 2009, U.S. Congresswoman Nancy Pelosi appointed Born to the Financial Crisis Inquiry Commission (FCIC). You can see her questioning Lloyd Blankfein (Goldman Sachs) here: That same year, she also received the Kennedy Profiles in Courage Award.

For more information:
‎"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to ...