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From: LindyBill	6/22/2008 12:52:40 PM
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Obama calls for oil crackdown By MIKE ALLEN \|POLITICO BLOG With the cost of gas a top issue in the presidential campaign, Barack Obama on Sunday will announce a plan to crack down on oil speculation by tightening regulations on energy traders. The announcement is further evidence that an Obama administration would take an activist, populist approach to regulating business. Obama wants to close a loophole in federal law that exempts some energy traders from regulations that govern other exchange-traded commodities. Democrats call this "the Enron loophole" because it benefited the Houston energy-speculation firm that collapsed in an accounting scandal. The Obama campaign accuses Phil Gramm — the former U.S. senator from Texas, who's now a McCain campaign co-chair and economic adviser — of helping insert the exemption. Gramm's wife, Wendy, was a member of the Enron board of directors. So today's announcement — in an early-afternoon conference call featuring New Jersey Gov. Jon Corzine — allows the Obama campaign to both side with consumers and take a whack at McCain's brain trust. Obama said in a statement: "My plan fully closes the Enron Loophole and restores common-sense regulation as part of my broader plan to ease the burden for struggling families today while investing in a better future." The campaign calls the loophole "one example of the special interest politics that put the interests of Big Oil and speculators ahead of the interests of working people." Obama said: "For the past years, our energy policy in this country has been simply to let the special interests have their way — opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon." Here are excerpts from the text of the four-part "Obama Plan to Crack Down on Excessive Energy Speculation," as provided by the campaign: 1) Fully Close the "Enron Loophole": One of the reasons our energy market is particularly vulnerable to excessive speculation is the so-called "Enron Loophole" … [which means] Commodity Futures Trading Commission (CFTC) is unable to fully oversee the oil futures market and investigate cases where excessive speculation may be driving up oil prices. This regulatory gap is dangerous because: 1) the absence of government oversight has the potential to facilitate abusive trading or price manipulation. And 2) the failure of a large derivatives dealer could trigger disruptions of supplies and prices in energy markets. As President, Barack Obama will go beyond the changes included in the recently-passed Farm Bill and fully close the Enron loophole by requiring that U.S. energy futures trade on regulated exchanges. He will call for new, disaggregated data on index fund and other passive investments to increase transparency and oversight of the growing number of institutional investors participating in commodities futures markets. And he will support legislation directing the CFTC to investigate whether additional regulation is necessary to eliminate excessive speculation in U.S. commodities markets, including higher margin requirements and position limits for institutional investors. See Also * Five places Obama and Clinton should go * McCain closes cash gap against Obama * Obama's pre-emptive political war 2) Ensure That U.S. Energy Futures Cannot be Traded on Unregulated Offshore Exchanges: CFTC oversight of oil market speculation is also limited by rules that allow energy traders to engage in unregulated transactions through foreign subsidiaries of U.S. exchanges. Currently, about 30 percent of U.S. oil futures trades fly below the regulatory radar because they are transacted on a U.S. exchange that works through a subsidiary in London. Similar arrangements are being pursued by U.S. exchanges in partnership with Dubai as well. Barack Obama would limit the price impacts of excessive speculation by preventing traders of U.S. crude oil from routing their transactions through off-shore markets in order to evade speculation limits and also impose reporting requirements. 3) Work with Other Countries to Coordinate Regulation of Oil Futures Markets. 4) Call on the Federal Trade Commission and Department of Justice to Vigorously Investigate Market Manipulation in Oil Futures politico.com

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