Skip to main content

From Jason Leopold, at

Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California’s electricity prices in 2001.

try democracy's excellent diary, "McCain: We're all tainted" posted today got into McCain's acceptance of Enron campaign funds, but when you bring Phil Gramm into the mix, things start looking much, much worse. As Jason Leopold states, McCain is looking to one of the primary architects of the Enron mess to be his "econ brain". Remember the good old days of rolling blackouts? Well, it turns out that Phil Gramm was a senator from Texas back then...

In 2000, with the Republicans in charge of Congress and Gramm chairing the Senate Banking Committee, the exemption on electronic trading was approved without a Senate hearing.

Internal Enron documents, which were released in 2002, revealed that the Houston-based company helped write the legislation, which was signed into law by President Bill Clinton in December 2000.

Freed from regulatory interference, Enron then used manipulative trading practices to game the California electricity market and drive up electricity prices across the state...

... Less than a month later, California began to experience rolling blackouts due to artificial electricity shortages which, according to documents later released by federal energy regulators, were the result of manipulative trading practices employed by Enron.

The California crisis centered on Enron’s energy trades through a new platform called EnronOnline, which had been freed from regulatory oversight by the legislation pushed by Gramm.

Just in case you were wondering about any possible conflict of interest Gramm might have had:

Gramm received more than $34,000 in campaign contributions from Enron and served as one of the company’s key legislative allies in Washington, including his help in 2000 removing federal oversight from energy trades on electronic platforms.


Gramm’s wife, Wendy, also had played a role in the anti-regulatory policies that contributed to the Enron scandal.

On Jan. 14, 1993, in the final days of the first Bush administration, Wendy Gramm – as chairwoman of the Commodity Futures Trading Commission – pushed through a key regulatory exemption removing energy derivatives contracts and interest-rate swaps from federal oversight.

That was a major financial boon to Enron, where Wendy Gramm landed five weeks later as a member of the board of directors. She also became a member of the audit committee that signed off on another one of Enron’s fraudulent schemes, partnerships that hid the company’s growing debt.

So aside from this being a sordid piece of American economic history, how does this affect us today? How about this:

The "Enron loophole" also has become part of the debate over the soaring price of oil. Last week, a study sponsored by Sen. Carl Levin, D-Michigan, concluded that speculative futures markets were partly to blame for the surge in oil prices that have pushed gas at the pump toward $4 a gallon.

At a May 15 news conference, Levin said the skyrocketing price of oil is "not the result of supply and demand. Speculators have taken over most of the futures market."

So, while he holds out a flimsy $.18/gallon "gas tax holiday" to voters, McCain is voting against help for America's farmers (during a freakin' food crisis!) so that we can relive the Enron days every time we go to fill up at the pump.

So, rural America, still feel like voting Republican?

Originally posted to Mercutio on Mon May 19, 2008 at 01:18 PM PDT.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Jar o' Tips (14+ / 0-)

    "Love your country always. Love your government when it deserves it." - Mark Twain

    by Mercutio on Mon May 19, 2008 at 01:19:14 PM PDT

    •  This is important (3+ / 0-)
      Recommended by:
      Mercutio, phaktor, redtex

      The more of this kind of stuff that comes out, the harder it is for the tradmed to keep pretending that McC is some kind of straight-talking maverick.

      The linkage with Enron is especially significant, due to the iconic nature of that scandal. Everybody knows that name and what it stands for. Even blow-dried TV news readers recognize the Enron narrative.

      Tipped & rec'd. BTW, I see where dengre rec'd too... that's a pretty good endorsement!

  •  I remember in one of Bush the lessor's first (3+ / 0-)
    Recommended by:
    Mercutio, DBunn, phaktor

    national speeches that he mentioned rolling brown outs in California.  I knew right then that it was a harbenger of things to come.  

    As if by magic, that summer Enron had worked over California to the toon of 9 billion dollars.  Wow!  Bush must be some sort of psychic or something.

    Who would have guessed that Gray Davis would have been recalled and Arnold would become governor just in time to pull the lawsuit filed by the Lt governor to recover the Enron theft.

    I'm glad I'm not a conspiracy theorist, this all has to be just some huge coincidence!

  •  Yeah this smells (1+ / 0-)
    Recommended by:


    help for America's farmers (during a freakin' food crisis!)

    Whether there's a food "crisis" is debatable, but farmers are getting top dollar for corn these days. You want to make food more affordable, stop the freaking susbsidies for ethanol.

    The cost of food is the problem right now, and it has nothing to do with farm aid, and everything to do with ethanol aid.

  •  GOP, Massed Negativity A Detriment to Progress (1+ / 0-)
    Recommended by:

    Senator Obama will expose them (Republicans) as Wizards (as in Oz --illusionary figures behind a curtain of Deceit!)  The Republican Magicians are at it again -- all smoke & mirrors and huff and puff. We are tired of their trickery's based on illusions and not fact, and like the Wizard of Oz, when the curtain is pulled back by "the light of truth", be exposed as fakers and con-artists, with loud, scary voices with no Real Power, pulling strings of "make believe" and deceit, and why should we go down the "yellow-brick-road" over and over again!

    This massed negativity has been a real detriment to American economic progress and peace in Iraq.  Such people are like a millstone around the neck of humanity, crippling true effort, murmuring Family Values, yet do nothing but impede true progress while humanity is dying.   This massed, organized negativity has been what has enabled them to work so ruthlessly with power and success at the destruction of all that has attempted to get in the way of their projects and desires.  They refuse to recognize that humanity can solve its problems without aggression and force and instead use the energy of goodwill, sharing and cooperation.

    If you disagree with their policies, they cry out in unison: I'll huff and puff and blow your house down in hopes of inciting fear and getting the opposing party to back down!   Only this time, we will not be fooled again by these "fakers and con-artists" and our House will withstand the onslaught of this False, Fleeting Wind that has devastated the American way of life, no more!  

  •  Thanks. Suggestion (1+ / 0-)
    Recommended by:

    Write the information in plain rural English.

    Best Diary of the Year?

    by LNK on Mon May 19, 2008 at 01:56:37 PM PDT

  •  It was comical to watch (2+ / 0-)
    Recommended by:
    Mercutio, redtex

    Gramm cut and run after the Enron debacle broke. He couldn't get his vile ass out of politics quick enough, because he knew he was right in the middle of it. Being the mean spirited, terror-broker that he is, it is no surprise he never answered for his part of it. He's clean as a whistle now and back to robbing the public trough.

    (-,-) "Just because an idea appeals to a lot of people doesn't mean it's wrong. But that's a good working theory. " John Tierney

    by phaktor on Mon May 19, 2008 at 02:33:12 PM PDT

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site