Shapiro added: “However, with less than 20 or so legislative days left, we need Senator Gramm to engage.
“A call from Ken Lay in the next two weeks to Senator Gramm could be an impetus for Gramm to move his staff to resolve the differences. Gramm needs to fully understand how helpful the bill is to Enron.
“Let me know your thoughts on this approach. I am prepared to assist in coordinating the call and drafting the talking points for a Ken Lay/Sen. Gramm call.”
Several other internal Enron e-mails briefed company staffers on the status of Gramm’s position and Enron’s lobbying of the senator. Gramm finally removed a “hold” on the bill in December 2000, reintroduced the bill under a different number, and forced a vote on it without floor debate.
It was then attached to an appropriations bill that was signed by President Clinton on Dec. 21, 2000.
California Crisis
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.
In April 2002, Gramm blocked an amendment by Sen. Dianne Feinstein, D-California, that would have closed the loophole that Gramm had helped open.
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.
Even after Enron had collapsed in fall 2001, Sen. Gramm continued to resist congressional efforts at tightening up the rules.
In 2002, despite the accounting scandals at Enron, WorldCom and other major companies, Sen. Gramm objected to the Sarbanes-Oxley corporate reform bill designed to hold executives accountable for inaccuracies in financial reports.
Now, the Gramm family’s anti-regulatory agenda is returning via McCain’s presidential campaign.
As Fortune’s editor-at-large Shawn Tully wrote, “economic conservatives should take heart. McCain’s chief economic adviser – and perhaps his closest political friend – is the ultimate pure play in free market faith, former Texas Sen. Phil Gramm. … Most of [McCain’s] current positions are vintage Gramm indeed.” [Fortune, Feb. 19. 2008]
The first test of McCain’s commitment to Gramm’s anti-regulatory purity may come in the looming battle over the “Enron loophole” that the farm bill seeks to close.
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