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Cadwalader & Lobbying for Retail Swaps Deregulation

In 1999 and 2000, Cadwalader, Wickersham, and Taft, a Washington law firm, lobbied Treasury staff on behalf of Enron for the deregulation of derivative markets, where financial contracts for price changes in securities or commodities (such as energy) are traded. The firm also lobbied for contract "netting," which allows creditors to resolve outstanding contracts in case of bankruptcy. Their proposed amendments to the Bankruptcy Reform Act, which Treasury staff on the Working Group for Financial Markets generally opposed, were nevertheless added to the legislation. The Bankruptcy Reform Act was never passed into law, but Enron and Cadwalader’s amendments were added to the 2000 Commodity Futures Modernization Act by Senator Phil Gramm, Enron’s best friend in Congress, and passed into law in December of that year, paving the way for Enron to control the California electricity market.

05/99 Proposed amendments to the Bankruptcy Reform Act: Cadwalader/Enron's proposed changes to the Bankruptcy Reform Act.

Email: Working Group Comments on Enron/Cadwalader proposal: Comments are redacted.

06/99 Proposed amendments to the Bankruptcy Reform Act: Cadwalader/Enron's proposed changes to the Bankruptcy Reform Act.

06/18/99 Conference Call: Call between Enron/Cadwalader and staff from the Working Group on Financial Markets (from Treasury, Federal Reserve, and other US agencies).

Email traffic: Working Group Comments: Though much of the important information in these emails is redacted, what little is left demonstrates the ease and level of contact between Enron and Treasury, and how much influence Enron enjoyed in the federal government.

Working Group Objections to Enron's Proposed Amendments: Working Group objections to changes to the Bankruptcy Reform Act proposed by Enron/Cadwalader.

Enron's Retail Swaps Interview: Enron's answers to the Working Group's questions have been redacted to protect the company's business strategy, but Public Citizen is challenging the redaction and will publicly disclose whatever information we receive.

09/99 Proposed amendments to the Bankruptcy Reform Act: Cadwalader/Enron's proposed changes to the Bankruptcy Reform Act.

Email: Lobbying on the Hill: Internal Treasury email regarding Cadwalader/Enron's lobbying efforts on the Bankruptcy Reform Act.

Enron's problems with the Bankruptcy Reform Act: Ellen Levinson is a Cadwalader employee; these notes appear to summarize Enron's objections to the Working Group's bankruptcy legislation.

Working Group Comments on Enron/Cadwalader proposal: Working Group's comments are redacted.

10/1999 Enron Letter to Treasury: Enron thanks Lee Sachs (Assistant Secretary of Treasury) for an Oct 6 meeting and emphasizes its opinion on derivatives, to which Treasury had disagreed: "There is no need for additional regulation of OTC derivatives dealers."

10/99 Letter from Ken Lay to Larry Summers: Ken Lay writes to Treasury Secretary Larry Summers objecting to regulation of OTC derivatives.

11/99 Proposed amendments to the Bankruptcy Reform Act: Cadwalader/Enron's proposed changes to the Bankruptcy Reform Act.

11/99 Letter from Larry Summers to Ken Lay: Larry Summers responds to Lay's objections to the regulation of OTC derivatives, assuring him that derivative deals will not be regulated (despite the Working Group's recommendations otherwise).

Working Group Letter to Senator Grassley: This letter from the Working Group to Senators Grassley and Torricelli describes in detail the Working Group's objections to amendments to the Bankruptcy Reform Act proposed largely by Enron.

02/00 Proposed amendments to the Bankruptcy Reform Act: Cadwalader/Enron's proposed changes to the Bankruptcy Reform Act.

03/00 Bond Market Letter: Bond Market Association writes a letter to Norman Carleton (Treasury) disassociating the group from Enron's proposed amendments to the Bankruptcy Reform Act.

Email: Regulation of Retail Energy Markets: Email summary of a phone call between Enron counsel and Treasury staff.

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