and the refusal of her fellow regulators, especially
Greenspan, to discuss even modest reforms.
“Recognizing the dangers ... was not rocket science,
but it was contrary to the conventional wisdom and certainly contrary to the economic interests of Wall Street
at the moment,” she says.
“I certainly am not pleased with the results,” she
adds. “I think the market grew so enormously, with so
little oversight and regulation, that it made the financial
crisis much deeper and more pervasive than it otherwise would have been.”
Greenspan, who retired from the Fed in 2006, acknowledged in congressional testimony last October
that the financial crisis, which he described as a “
once-in-a-century credit tsunami,” had exposed a flaw in his
He says Born’s characterization of the lunch conversation she recounted does not accurately describe his
position on addressing fraud. “This alleged conversation is wholly at variance with my decades-long-held
view,” he says, citing an excerpt from his 2007 book,
The Age of Turbulence, in which he wrote that more government involvement was needed to root out fraud.
Born stands by her story.
Robert Rubin, who was Treasury secretary when
Born headed the CFTC, has said that he supported
closer scrutiny of financial derivatives but did not believe it politically feasible at the time.
A third regulator opposing Born, Arthur Levitt, who
was chairman of the Securities and Exchange Commission, says he also now wishes more had been done. “I
think it is fair to say that regulators should have considered the implications ... of the exploding derivatives
market,” Levitt says.
In a way, the battle had the look and feel of a classic
Washington turf war.
The CFTC was created in the 1970s to regulate agricultural commodities markets. By the ’90s, its main business had become overseeing financial products such as
stock index futures and currency options, but some in
Washington thought it should stick to pork bellies and
soybeans. Born’s push for regulation posed a threat to
the authority of more established cops on the beat.
“She certainly was not in their league in terms of
prominence and stature,” says a lawyer who has known
Born for years and requested anonymity to avoid appearing critical of her. “They probably thought: ‘Here
is a little person from one of these agencies trying to assertively expand her jurisdiction.’ ”
Some of the other regulators have said they had problems with Born’s personal style and found her hard to
work with. “I thought it was counterproductive. If you
want to move forward ... you engage with parties in a
constructive way,” Rubin told the Washington Post. “My
recollection was ... this was done in a more strident way.”
Levitt says Born was “characterized as being abrasive.”
Her supporters, while acknowledging that Born can
be uncompromising when she believes she is right,
say those are excuses of people who simply did not
want to hear what she had to say.
“She was serious, professional, and she held her
ground against those who were not sympathetic to
her position,” says Michael Greenberger, a law professor at the University of Maryland who was a top aide
to Born at the CFTC. “I don’t think that the failure
to be ‘charming’ should be translated into a depiction
Others find a whiff of sexism in the pushback. “The
messenger wore a skirt,” says Marna Tucker, a senior
partner at Feldesman Tucker Leifer Fidell in D.C. and
a longtime friend of Born’s. “Could Alan Greenspan
Greenspan dismisses the notion that he had problems
with Born because she is a woman. He points out that
when he took a leave from his consulting firm in the
1970s to accept a job in the Ford administration, he
placed an all-female executive team in charge.
IT WAS NOT THE FIRST TIME THAT BORN, 68, HAD PUSHED
back against convention.
Her doggedness over a career spanning more than
40 years propelled her into the halls of power in Washington. She was a top commercial lawyer at a major
firm, as well as a towering figure in the area of women’s
rights and a role model for female lawyers. Born was on
President Bill Clinton’s short list for attorney general.
One of seven women in the class of 1964 at Stanford
Law School, she graduated at the top of her class and
was elected president of the law review, the first woman
to hold either distinction. She is credited with being the
first woman to edit a major American law review.
In the early 1970s, at a time when women had few
role models at major law firms, she became a partner at
the Washington firm of Arnold & Porter, despite working part time while raising her children.
Born helped establish some of the first public-interest
firms in the country focused on issues of gender discrimination. She helped rewrite American Bar Association
rules that made it possible for more women and minori-ties to sit on the federal bench, and she prodded the
ABA into taking stands against private clubs that discriminated against women or blacks.
She was used to people trying to push her around,
or being perceived as a potential troublemaker. Born
remembers being shouted down during an ABA meeting in the 1970s when she proposed that the organization take a position supporting equal rights for gay and
lesbian workers. A former ABA president stood up and
said “that the subject was so unsavory that it should not
be discussed ... and was not germane to the purposes of
the ABA,” she recalls. She lost that fight, although the
association reversed its stand years later.
“She looks at things not just from a technical perspec-