Tuesday, November 18, 2008

the Enron Loophole

One of the reference questions we discussed in yesterday's reference practicum was the Enron loophole. Students were looking for congressional testimony about it. Searching in news databases is easy enough using the common terminology of "Enron loophole," but in legislative databases especially Thomas, it's better to start with the bill number or the name of the act, in this case, the Commodity Futures Modernization Act. This act allowed unregulated trading of financial derivatives including credit default swaps. It included special language that exempted Enron's electronic energy trading operation, Enron Online, from regulation, hence, "the Enron loophole."

For a good background report on this issue, read the Congressional Research Service report of July 2008.

This article from the New York Times on "Gramm and the 'Enron Loophole'" discusses the role of former Senator Phil Gramm in the passage of the bill and points to additional sources including the Enron Explorer, a website that puts Enron e-mail in a searchable format.

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