Opponents
of an amendment to the Senate Energy bill to end regulatory exemptions
for energy derivatives trading that helped Enron inflate its balance
sheet and hide its debt have spent $46 million lobbying Congress since
2000 and made campaign contributions of more than $2.7 million in hard
and soft money in the 2000 and 2002 cycles, according to a new report
by the Enron Watchdog campaign of the state Public Interest Research
Groups. The amendment, proposed by Senator Dianne Feinstein (D-CA),
would provide price transparency when energy derivatives are traded and
give the Commodity Futures Trading Commission (CFTC) oversight
authority for such transactions.
"Consumer
groups support the Feinstein amendment because it restores necessary
transparency and oversight to the financial marketplace," said PIRG
Consumer Program Director Ed Mierzwinski. "This amendment is the first
major test of whether Congress is going to enact Enron reforms, or just
wring its hands and stick with business as usual."
According
to the Enron Watchdog report, nine industry associations publicly
opposing the Feinstein amendment have spent $46 million on lobbying in
2000 and the first half of 2001 alone. In addition, these industry
associations have given more than a million dollars in PAC
contributions to Senate candidates and contributed more than $1.7
million in soft money in the 1999-2000 and 2001-2002 election cycles.
The associations opposing the amendment include the American Bankers
Association, Securities Industry Association, International Swaps and
Derivatives Association and the U.S. Chamber of Commerce. [Tables
attached detailing contributions and lobbying expenses.]
Senator
Feinstein's amendment would repeal certain provisions of the Commodity
Futures Modernization Act, enacted in 2000 with strong support from
Senator Phil Gramm (R-TX), former Senate Banking Committee chairman.
This legislation exempted energy and minerals trading and electronic
trading platforms from regulatory oversight. Enron Online and others in
the energy sector took advantage of this new loophole by trading energy
derivatives absent any regulatory oversight or transparency. As a
result, about 90% of energy trades representing purely financial
transactions escape regulation by either the Federal Energy Regulatory
Commission (FERC) or the Commodity Futures Trading Commission (CFTC).
Senator
Feinstein's amendment would help ensure that over-the-counter traders
of energy derivatives operate with proper federal oversight, fostering
a more stable market with transparent transactions.
"Enron
used over-the-counter derivatives extensively in order to hide just
what it was doing to make money. Far too many former employees,
investors and retirees are now paying the price for Enron's desire to
operate through murky, confusing, and unregulated transactions,"
concluded Mierzwinski. "It's time for Congress to stand up for those
little guys by standing up to the big guys peddling influence."
