MotherJones has a new story about shady business dealings of Kelly Loeffler. As always, the theme is “I get rich, who cares about anybody else?”. The MotherJones headline sums this story up as “How Kelly Loeffler’s Firm Facilitated an Enron-Like Scandal”. To the details:
Before she was appointed in late 2019 to fill a Senate vacancy, Loeffler, a prominent Republican donor, had spent 16 years working in the corporate management of Intercontinental Exchange, a Fortune 500 company that owns the New York Stock Exchange and other financial markets, as well as other businesses, including digital mortgage services. The CEO of the company, Jeffrey Sprecher, is her husband, and together they are worth $800 million. [...]
In 2006, a giant hedge fund called Amaranth Advisors accumulated massive natural gas holdings on the New York Mercantile Exchange (NYMEX) and was dominating the natural gas market. It held up to 70 percent of natural gas commodities on the exchange and, consequently, was able to manipulate prices by buying or selling large chunks of its holdings. [...]
In August of that year, NYMEX, concerned about Amaranth’s trading, directed the fund to reduce its natural gas positions. Amaranth did so on NYMEX, but it increased its natural gas holdings on an unregulated energy exchange run by ICE—Sprecher and Loeffler’s firm. “NYMEX’s instructions to Amaranth did nothing to reduce Amaranth’s size, but simply caused Amaranth’s trading to move from a regulated market to an unregulated one,” according to the Senate report. And the hedge fund kept on trading its natural gas holdings. [...]
Amaranth was able to resort to this maneuver because of the so-called “Enron loophole” in the Commodity Futures Modernization Act of 2000.
Ah, good old unregulated trying-to-corner-the-market. That can’t go badly for anybody, right?
Amaranth’s natural gas skullduggery in 2006 went too far. During a sell-off, the firm ended up losing $6 billion and experienced a stunning crash.
Okay, it went for the speculators. But at least nobody else was hurt, right?
As a result, and according to a recent Senate report, speculation of this nature may have added 20 to 25 dollars per barrel to the price of crude in 2006. The Industrial Energy Consumers of America estimates that Amaranth’s speculation alone cost consumers of natural gas as much as $9 billion from April to August of last year.”
The Municipal Gas Authority of Georgia calculated that 243,000 of its customers collectively had to pay an extra $18 million in the winter of 2006 and 2007 because of Amaranth’s shenanigans.
Nevermind. But there must be a silver lining — it must have been good for somebody, right? Of course:
But operating an unregulated exchange was good business for ICE. As CFTC commissioner Bart Chilton noted in 2007, the Enron loophole “helped foster the incredible growth of the Intercontinental Exchange.”
Everybody else lost, but Kelly Loeffler won. Or as Republicans say, “all’s well that ends well”.
Kelly Loeffler is a terrible Senator, we need to send her into retirement. Can you chip in a few bucks for the Defeat Kelly Loeffler Fund that benefits Raphael Warnock and some of his key allies via ActBlue?
Do you want to know more about helping Jon Ossoff and Raphael Warnock win their runoff elections? Check out the diary This is how we are going to win the GA runoffs - a (nearly) complete guide, version 2.0.