Obama Targets “Enron Loophole”

Sen. Barack Obama on Sunday rolled out a proposal to curb speculation in energy markets, a plan his advisers said would help stabilize soaring gas prices.

Obama proposed a four-step program that would, among other things, close a so-called “Enron loophole” that protects some energy futures trading from oversight by the Commodity Futures Trading Commission, his advisers said.

“I think everyone believes there’s too much speculation in the oil markets, and a lot of it flows directly from that particular loophole,” Gov. Jon Corzine, the New Jersey Democrat, said on a conference call hosted by the Obama campaign.

The other three components of the plan, as described by Obama economic adviser Jason Furman, are: to ensure that US energy futures cannot be traded in offshore, unregulated markets; to work toward an international regulation of oil futures markets, in cooperation with like-minded countries; and to have both the Federal Trade Commission and the Department of Justice investigate the oil markets.

As gas prices have shot above $4 per gallon, energy has taken center stage in the campaign, with both Obama and the presumptive Republican nominee, Sen. John McCain, proposing policies to ease the crunch for consumers. McCain last week reversed his opposition to drilling offshore; he has also supported a holiday for consumers from paying federal taxes on gasoline.

On Sunday, the McCain campaign said Obama is mimicking McCain on the gas loophole.

“The truth is Barack Obama is following John McCain’s lead to close a Wall Street loophole that was signed into law by President Bill Clinton,” McCain campaign spokesman Tucker Bounds said in a statement. “John McCain has supported bipartisan efforts to close this loophole and will work to address abuses in oil speculation. Barack Obama has voted the party line for Democrats who claim the loophole is fixed. 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.”