WASHINGTON — Sen. Barack Obama on Sunday said that as president, he would strengthen government oversight of energy traders he blames in large part for the skyrocketing price of oil.
The Democratic 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 Friday — almost double the price of a year ago.
“My plan fully closes the Enron loophole and restores common-sense regulation,” Obama said in a statement.
Obama’s campaign blamed the loophole on former Sen. Phil Gramm, a Texas Republican who serves as co-chairman and economic adviser for GOP candidate Sen. John McCain.
The Obama campaign accused 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. Gramm has said he had “nothing to do with the writing of the provision” on regulation of energy trading.
Enron collapsed in scandal in 2001 when it was discovered that the company had vastly overstated its income.
McCain spokesman Tucker Bonds said McCain has supported efforts to close the loophole and noted that the bill in question was signed into law by former President Clinton.
Congress already has acted to close the loophole, including a provision in the farm bill that passed earlier this year. Obama’s campaign said the candidate would go further by requiring that U.S. energy futures be traded on regulated exchanges.
Obama also would ask the Commodity Futures Trading Commission to consider whether traders should be subject to higher margin requirements. In addition, he would work with other countries to regulate energy markets and press the Federal Trade Commission and the Department of Justice to investigate possible market manipulation.
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