For Immediate Release 5/22/12
Wed. May 23rd 4:30 pm Thompson Center (Randolph & Clarke) in Chicago
On Wed. May 23rd Family Farm Defenders will be joining Stand Up Chicago and other allies for a protest outside the Chicago Mercantile Exchange (CME) to expose its sordid track record of racketeering, commodity speculation, tax evasion, and corruption.
Specifically, FFD will be denouncing the rampant dairy price rigging that occurs at the CME and hurts farmers and consumers across the U.S. and around the world. In 2008 the Commodity Futures Trading Commission (CFTC) found Dairy Farmers of America (DFA) guilty of price rigging at the CME and levied an unprecedented $12 million fine. Yet, these illegal trading practices continue at the CME. One of the worst perpetrators is another corrupt cooperative, Land O Lakes, which openly colludes with Kraft, Sargento, and other dairy giants.
“The CEO of Land O’Lakes believes that farmers only exist to serve the market. He needs to understand that farmers work hard to pay their bills and support their families first, and only serve the market second,” noted Joel Greeno, dairy farmer and vice president of Family Farm Defenders. “It is especially disturbing that as the rest of the world celebrates the U.N. Year of the Co-op, we have an outfit like Land O Lakes acting more like a corrupt corporation, violating federal law and hurting its own members.”
Despite being the most profitable business in Chicago, posting nearly $1.9 billion in profits last year, the CME is also a notorious tax dodger, threatening to move out of IL if it did not get $77 million per year in state tax breaks. Far from being a responsible corporate neighbor, the CME has become just another parasite feeding off Illinois taxpayers and Chicago residents.
“It is disgusting to find out that Craig Donohue, the ex-CEO of the CME, has been racking in millions as part of his bloated executive compensation while he allowed criminal racketeers to bankrupt family farmers at an institution for which he supposedly had fiduciary responsibility,” added John Peck, executive director of Family Farm Defenders. “We look forward to the Dept. of Justice taking aggressive anti-trust enforcement action against him and other elites who are now facilitating illegal and corrupt trading at the CME.”
For more background read below:
CME – Corporate Auction Block for Global Free Trade
Ever wonder who really sets the “free market” price for your food? Why would people in Brazil, South Africa, Japan, India, or Australia, care so much about what a handful of traders are doing in Chicago?
What is the Chicago Mercantile Exchange (CME)?
Founded in 1898 as the non-profit Chicago Butter and Egg Board, the CME has since grown into the world’s largest private trading clearinghouse. Each day an elite group gathers at the CME in downtown Chicago to swap commodities such as cheese, carbon credits, timber, feather meal, soy oil, and fertilizer. Within seconds this “thin” market reverberates around the globe, affecting farmgate prices and grocery bills for billions of people. In 2002 the CME went public, issuing its own stock, and in 2007 acquired the Chicago Board of Trade (CBOT) for $8 billion as one of its designated contract markets (DCMs). In 2008 the CME Group bought out another rival, the New York Mercantile Exchange (NYMEX) for $8.9 billion, and in 2009 also acquired the Dow Jones Indexes. In 2008 the CME reported revenues over $2.5 billion, handling over a billion contracts worth $1,000+ trillion dollars. While some human shouting still occurs in the pit, over 70% of CME trading happens quietly behind the scenes through its Globex electronic platform. Beyond its headquarters in Chicago, the CME also has offices in New York, Houston, Washington DC, Sydney, Singapore, London, Hong Kong, and Tokyo. Craig Donohue, who recently stepped down as the CEO of CME Group, took home $6.9 million in salary and stock options in 2010, placing him well within the Forbes wealthiest 500. Despite being Chicago’s most profitable business, the CME recently threatened to move out of IL if they weren’t given $77 million per year in state tax breaks.
CME – Insider Trading Cloaked in Secrecy
Because the CME is a private corporation, it is not subject to the same transparency and accountability rules governing public agencies. While the CME often fondly invokes the public trust doctrine, its primary fiduciary responsibility is to its private investors. In this respect, the undemocratic character of the CME fits well with that of other global free trade entities such as the International Monetary Fund (IMF), World Bank, and the World Trade Organization (WTO) – all of which are run by unelected officials who ostensibly police themselves. According to the CME’s own mission statement, “Integrity and openness are critical. We expect the highest ethical standards from our employees and market participants. We rigorously regulate our markets.” Many of those who have been victimized by the CME would beg to differ. The Commodity Futures Trading Commission (CFTC) is charged with overseeing the CME, but since much of the manipulation involves commodity cash trading, the CFTC can only intervene if this corruption trickles over into futures markets. In 2004 the Dept. of Justice in conjunction with twenty three State Attorney Generals began an anti-trust investigation of collusion by the dairy giants at the CME, but this effort was stymied by the Bush White House and has yet to be fully pursued by the Obama administration. In 2008 the CFTC found Dairy Farmers of America (DFA) guilty of price rigging at the CME and levied a $12 million fine. Unfortunately, much more needs to be done to free farmers, consumers, and taxpayers from the corporate greed that now pervades the CME in Chicago.
How Can You Help Restore Fair Trade and Moral Integrity to the CME?
Contact the Commodity Futures Trading Commission (CFTC) to demand more government oversight of the CME: CFTC, 1155 21st St. NW, Washington, DC 20581 tel. #(202) 418-5000
Contact the U.S. Senate Judiciary Committee to demand a thorough Congressional and U.S. Dept. of Justice (DoJ) investigation of unfair trading practices at the CME:
Patrick Leahy – Judiciary Cmte chair (D-VT), Chuck Grassley (R-IA), Amy Klobuchar (D-MN), Dianne Feinstein (D-CA), Herb Kohl (D-WI), Chuck Schumer (D-NY), Dick Durbin (D-IL)
Congressional Switchboard tel. #202-224-3121
Dept. of Justice Comment Line tel. #202-353-1555