Sen. Barack Obama on Sunday said as president he would strengthen government oversight of energy traders he blames in large part for the skyrocketing price of oil.
The Democratic presidential candidate’s campaign singled out the so-called “Enron loophole” for allowing speculators to run up the cost of fuel by operating outside federal regulation. Oil closed near $135 a barrel on Friday - almost double the price a year ago.
“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,” Mr. Obama said in a campaign statement.
Mr. Obama’s campaign blamed the loophole on former Sen. Phil Gramm, a Texas Republican who serves as Republican candidate Sen. John McCain‘s campaign co-chairman and economic adviser. The Obama campaign accused Mr. Gramm of inserting a provision into a bill in late 2000 “at the behest of Enron lobbyists” that exempted some energy traders from government oversight.
Houston-based Enron collapsed in scandal in 2001 when it was discovered the company had vastly overstated its income.
McCain spokesman Tucker Bounds said Mr. McCain has supported efforts to close the loophole and noted the bill in question was signed into law by President Clinton, a Democrat.
“The fact that Barack Obama is attacking John McCain, despite McCain’s leadership on the issue, shows that Barack Obama is driven by the partisan attacks that Americans are tired of,” Mr. Bounds said.
The McCain campaign also supplied a copy of a letter Mr. Gramm wrote to Sen. Byron L. Dorgan, North Dakota Democrat, on June 13 in which the former senator denied charges that the adoption of the bill was a “secret maneuver.” Mr. Gramm said he had “nothing to with the writing of the provision” on regulation of energy trading.
Mr. Obama’s plan was outlined Sunday by New Jersey Gov. Jon Corzine, former chairman and CEO of Wall Street investment firm Goldman Sachs, during a conference call with reporters. Mr. Corzine said the volatility in the price of oil “is absolutely indicative of speculation in the markets.”
Congress already has acted to close the loophole, including a provision in the huge farm bill that passed earlier this year. But the Obama campaign said the candidate would go further by requiring that U.S. energy futures be traded on regulated exchanges.
Mr. Obama also would ask the Commodity Futures Trading Commission to consider whether traders should be subject to higher margin requirements. He also would work with other countries to regulate energy markets and press the Federal Trade Commission and the Justice Department to investigate possible market manipulation.
The campaign said Mr. Obama’s proposal is part of his broader energy strategy that calls for reducing oil consumption by 35 percent by 2030.
Neither Mr. Obama nor Mr. McCain held public campaign events Sunday. The Republican attended services at a Baptist church in Phoenix without talking to the press; the Democrat took the day off to spend time with his family in Chicago.
Both men return to the campaign trail Monday - Mr. McCain in California and Mr. Obama in New Mexico.