Olbermann Blames McCain for Bipartisan Clinton-signed 'Enron Loophole'

Almost two years ago, NewsBusters wondered when media would begin reporting Enron's ties to higher oil and gas prices.

Recently, we've gotten our answer: when it could be blamed on the Republican presidential nominee.

Such was certainly the case Wednesday evening when Obama advocate Keith Olbermann did a segment on "Countdown" pointing fingers at John McCain for having not done more to repeal the so-called "Enron Loophole" created by the enactment of the Commodity Futures Modernization Act of 2000.

Though predictable, Olbermann conveniently ignored how the first version of this bill passed in the House with almost unanimous bipartisan support, cleared final approval in the Senate by a voice vote without any objection, and was signed into law by Bill Clinton who had also been a strong advocate (video embedded upper-right, use scrollbars to center):

OLBERMANN: John McCain is renowned for saying he does not know much about the economy and for parading around those advisers of his who he says do know something about the economy. our third story tonight, A COUNTDOWN special report on the price of gas, and how McCain`s chief economic adviser, among others, helped create and defend pivotal legislation that unleashed speculators to run up gas prices. It is, in essence, a legalized form of insider trading, deregulation that lets speculators overwhelm trading in oil futures, those complicated contracts that let commercial users of oil hedger their bets about future price and supply fluctuations by agreeing to prices and delivery dates ahead of time.

Since this legislation passed, gasoline prices have more than doubled and commodity traders have made tens of millions of dollars, devastating thousands of small companies that deal in oil, and creating the risk of a speculative bubble popping.

How does McCain fit in? The road connecting him to four dollar gas begins with Enron.


OLBERMANN (voice-over): Soon after Enron`s birth as a power supplier in the 1980s, CEO Ken Lay decided head could make more money betting on electricity futures, especially if government regulators didn`t stop him from cornering the market and gaming the system. Under the first President Bush, an obscure agency called the Commodities Future Trading Commission obliged Ken Lay. The CFTC chairwoman, Wendy Gramm, left Enron alone.

When Bill Clinton beat Bush, it took only one week before Enron asked Gramm to lock in her hands-off position as official CFTC policy. Gramm started the process. The CFTC approved it after she left on Clinton`s inauguration day. Five weeks later, she took a part-time post on Enron`s board of directors and wound up earning more than 900,000 dollars over the next decade. Clinton never undid Gramm`s changes.

Fast forward to the year 2000 and Bush v. Gore. In the chaos of constitutional crisis, Enron got a law passed containing what is now known as the Enron loophole. Where Gramm deregulated individual trades, the Enron loophole deregulated entire markets, online markets. [...]

Since 2006, John McCain`s top economic adviser has been former Texas Senator Phil Gramm, husband of the former CFTC head who then joined Enron. McCain chaired Gramm`s 1996 presidential race, with Ken Lay as regional chairman. It was Gramm who passed the Enron loophole, partially written by Enron itself, with no hearings, with no debate.

It was Gramm who stopped Democrats from closing the Enron loophole, and it was Gramm who became vice chairman at the Swiss financial firm UBS in 2002, less than a year after UBS bought the shattered remains of Enron`s energy trading arm.

This would be quite a scoop for Olbermann if there was any truth to it. After all, the Senate's version of CFMA, co-sponsored by Gramm, was never debated or voted on.

By contrast, it was the House that got CFMA through the legislative process by initially passing H.R. 4541 with almost unanimous support. In fact, the final vote cast on October 19, 2000, was 377-4. 180 Democrats, including current Speaker Nancy Pelosi (D-Cali.), voted in favor of this bill.

Of course, as Gramm was in the Senate, he couldn't vote on this House bill. I guess such facts eluded the oh-so-intelligent Olbermann.

Months later, this bill became part of a larger, end of the year consolidated appropriations act, H.R. 4577, which passed the House by a vote of 292 to 60. Only nine Democrats voted against it. The bill was later approved with a voice vote by the Senate -- without objection -- and signed into law by President Clinton on December 21.

As such, blaming this loophole on then Sen. Gramm, and tying it to McCain, defies any logic or intellectual honesty on the part of Olbermann and his MSNBC producers.

Color me unsurprised.

As an aside, and as not only stated in my August 2006 NewsBusters piece about this issue but also in my June 9 National Review Online article, I strongly believe this Enron loophole is adding to the speculative bubble in energy prices, and needs to be immediately repealed. However, as CFMA enjoyed overwhelming bipartisan support when passed in 2000, I find it utterly disgraceful for anyone -- especially someone that considers himself to be a journalist -- to point fingers of blame either at one Party or one person.

Sadly, as one of the most biased members of the news media today, this is indeed Olbermann's modus operandi.

The good folks at General Electric should be so proud.

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