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United Mine Workers chief Joseph Main, the statutory requirement that a
mine be inspected four times each year is seldom met, and inspections,
when they do occur, tend to be rushed and ineffective.'" The Quecreek
flood, it turns out, may have been caused by the miners' reliance on old
inaccurate maps. The maps showed that the abandoned flooded mine that
the miners drilled into, causing their own tunnel to flood, was located
three hundred feet away from its actual location. Floods similar to the
one at Quecreek had occurred at two other mines operated by Black Wolf
Mining Company, the operator of Quecreek Mining, and a subsidiary of PBS
Coals, within the two years preceding the Quecreek incident. It is
reasonable to presume that an appropriately staffed and well-functioning
agency might have ensured that the Quecreek miners had accurate maps and
thus prevented their horrible ordeal."' Funding cuts to the agencies
responsible for enforcing regulatory laws are increasingly common across
the regulatory system, not just in relation to mining. Their effect, if
not always their intention, is to deregulate corporate behavior. Though
legal standards are left
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JOEL BAKAN in place, the gutting of enforcement mechanisms ensures that
they are substantially weakened and sometimes entirely ineffective. Cuts
to the agencies that regulate Alaska's oil fields and to the Department
of Labor's budget (which have compromised effective enforcement of the
Fair Labor Standards Act) are examples discussed earlier. Cuts to the
Environmental Protection Agency," the Occupational Safety and Health
Administration," and the Securities and Exchange Commission" have also
recently been blamed for harm caused by inadequate oversight of
corporate activities within those agencies' jurisdictions. A second kind
of deregulation involves the actual repeal of regulations . This
phenomenon too is pervasive throughout the regulatory system. Laws
designed to protect the public interest from corporate misdeeds are
being scaled back and are sometimes disappearing altogether . There is
no better illustration of the dangers of this trend than the Enron
debacle. When the lights first went out in California on December 7,
2000, an event that would occur almost forty more times over the next
six months and wreak havoc on the state and its citizens, no one
suspected that Enron was largely to blame. Overregulation was blamed by
many for the suddenly short supply of electricity, and deregulation was
proposed as the solution. "If there's any environmental regulations
that's preventing California from having a 100 percent max output at
their plants, as I understand there may be," stated President-elect
George Bush in January 2001, "then we need to relax those
regulations."24 Republican Senator Phil Gramm, another Texan, blamed
"those who valued environmental extremism and interstate protectionism
more than common sense and market freedom " for the disaster.25 What
eventually came to light, however, was that Enron's highly
successful-and very expensive-campaign to eliminate government
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THE CORPORATION 99 oversight of its operations had been a major factor
in the electricity system's failure." Stripped down to its essentials,
Enron's is the story of a corporation that used political influence to
remove government restrictions on its operations and then exploited its
resulting freedom to engage in dubious, though highly profitable,
practices. Through the 1990s, the company and its officials, chiefly
former CEO Kenneth Lay, dumped huge amounts of money into the political
process to help transform an unremarkable pipeline company into a
powerhouse energy trader. After lobbying successfully for deregulation
of electricity markets in several states, among them California, it
began a campaign to deregulate the trading of energy futures. In the
early 1990s, it and several other energy companies sought to exempt
themselves from the Commodity Exchange Act's requirement that energy
traders disclose information about their futures contracts to the
Commodity Futures Trading Commission (CFTC), the agency responsible for
enforcing the act. Just over a week after Bill Clinton had defeated
George Bush in the November 7, 1992 election the companies petitioned
the CFTC, headed at the time by Wendy Gramm, to remove energy futures
trading from its jurisdiction. Gramm, by that time a lame duck, as were
the other Bush appointees on the commission, was also potentially in a
conflict of interest-her husband, Texan Senator Phil Gramm, was a
leading beneficiary of Enron's political largesse. She nonetheless
brought the petition before her commission, which in January 1993
decided, by a vote of 2 to 1, in favor of Enron and the other
petitioners. As a result, trading in energy futures was no longer
subject to CFTC oversight. It "sets a dangerous precedent," Sheila
Blair, the lone dissenter on the commission, said of the decision at the
time. It was "the most irresponsible decision I have come across," said
congressman Glen English, an eighteen-year veteran of the House and
chair of the
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JOEL BAKAN House subcommittee that governed Gramm's commission. Six
days after she handed down her decision, on the day Bill Clinton took
office, Wendy Gramm resigned from the commission. Five weeks later, she
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