Phil Gramm Inserts 262-Page CFMA into 11,000-Page Spending Bill Hours Before Christmas Recess

In the early evening of Friday, December 15, 2000, with Christmas recess only hours away and the presidential election still unresolved, the U.S. Senate rushes to pass an essential 11,000-page government reauthorization bill. Senator Phil Gramm of Texas inserts a complex 262-page amendment - the Commodity Futures Modernization Act - at the last minute, in what one legal textbook would later call “a stunning departure from normal legislative practice.”

The 262-page CFMA buried within the massive omnibus spending bill prohibits federal and state regulation of over-the-counter derivatives, including the “Enron loophole” that exempts energy trading from CFTC oversight. The timing and method of insertion make meaningful congressional review impossible - members must vote on the entire government funding package without time to analyze the derivatives provisions. This legislative maneuver ensures passage of legislation that would never survive normal committee scrutiny or public debate.

The bill passes and is signed by President Clinton on December 21, 2000, just as he leaves office. The CFMA represents the culmination of Wall Street’s decades-long campaign to eliminate derivatives oversight, incorporating recommendations from the President’s Working Group that explicitly rejected Brooksley Born’s warnings. Gramm’s wife Wendy had granted Enron its initial derivatives exemption in 1993 and joined Enron’s board five weeks later; Phil Gramm now completes the deregulatory project by banning all derivatives regulation. The “lame duck” insertion of the CFMA into a must-pass spending bill exemplifies legislative corruption - using procedural manipulation to enact policies that benefit specific corporate interests while evading democratic accountability.