Cliff Tries to Put Lipstick on the Oil Trading Pig

In a press release dated June 26, 2008 on his website, Congressman Stearns proudly announces that he voted in favor of

H.R. 6377, the Energy Markets Emergency Act. The measure directs the Commodity Futures Trading Commission (CFTC) to immediately curb the role of excessive speculation in any contract market within its jurisdiction and control, or through which energy futures or swaps are traded. H.R. 6377 also directs the CFTC to eliminate excessive speculation, price distortion, sudden or unreasonable fluctuation, as well as any other unlawful activity that causes market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.

Cliff should have highlighted the "any contract market within its jurisdiction and control" phrase, because it is the infamous Commodity Futures Modernization Act of 2000 that got us into this mess in the first place. This bill, widely credited to be the brainchild of Phil Gramm (likely nominee to be Secretary of the Treasury under a President McCain), created what is called the "Enron loophole". This loophole enabled the movement of electronic speculation in energy commodities to overseas markets, beyond the regulation of the Commodity Futures Trading Commission, then headed by Gramm's wife Wendy. This proved such a boon to Enron that Wendy Gramm joined the Enron Board of Directors after leaving her regulatory post.

It is quite humorous that Cliff now takes a bold stand to prevent unlawful activity in markets within the reach of the CFTC when he played a role in moving the major speculation offshore, out of the reach of the commission. The initial bill in the House was HR5660 in 2000. No votes were held on this bill and it was folded into a larger appropriations bill, HR 4577. In the first vote, HR 4577 was passed primarily along party lines in the then Republican-controlled House by a vote of 217 to 214. Cliff joined 212 of his Republican cronies in passing this abysmal piece of public policy. The bill then moved to the Senate for another narrow, partisan victory for the Repulicans, passing by a vote of 52 to 43. However, there was a minor amendment in the Senate version, so a conference bill was needed. The conference bill passed the House by a much larger margin, 292 to 60. Now that passage was assured, Cliff changed his vote on the conference bill to a "No", but the damage already was done by his first "Yes" vote. It seems that Congressman Stearns started trying to put lipstick on this pig in 2000, but now, eight years later, his role in the narrow passage of one of the worst pieces of legislative debauchery in our history cannot be denied.