PATRICIA KILDAY HART | MAY 30, 2008 | FEATURES

In the early evening of Friday, December 15, 2000, with Christmas break only hours away, the U.S. Senate rushed to pass an essential, 11,000-page government reauthorization bill. In what one legal textbook would later call “a stunning departure from normal legislative practice,” the Senate tacked on a complex, 262-page amendment at the urging of Texas Sen. Phil Gramm.

There was little debate on the floor. According to the Congressional Record, Gramm promised that the amendment—also known as the Commodity Futures Modernization Act—along with other landmark legislation he had authored, would usher in a new era for the U.S. financial services industry.

“The work of this Congress will be seen as a watershed where we turned away from an outmoded Depression-era approach to financial regulation and adopted a framework that will position our financial services industry to be world leaders into the new century,” Gramm said.

Watershed indeed. With the U.S. economy now battered by a tsunami of mortgage foreclosures, the $30-billion Bear Stearns Companies bailout and spiking food and energy prices, many congressional leaders and Wall Street analysts are questioning the wisdom of the radical deregulation launched by Gramm’s legislative package. Financial wizard Warren Buffett has labeled the risky new investment instruments Gramm unleashed “financial weapons of mass destruction.” They have fed the subprime mortgage crisis like an accelerant. While his distracted peers probably finalized their Christmas gift lists, Gramm created what Wall Street analysts now refer to as the “shadow banking system,” an industry that operates outside any government oversight, but, as witnessed by the Bear Stearns debacle, requiring rescue by taxpayers to avert a national economic catastrophe.

While the nation’s investment bankers are paying a heavy price for their unbridled greed (in billions of dollars of write-offs), Gramm has fared quite nicely. He currently serves as a vice president at UBS AG, a colossal, Swiss-owned investment bank, the post, no doubt, a thank you for assiduously looking out for Wall Street interests during his 23 years in public office. Now, with the aid of his longtime friend Arizona Sen. John McCain, Gramm may be looking at a quantum leap in power and influence.

Gramm serves as co-chair of the McCain 2008 presidential campaign. As one of the candidate’s chief economic advisers, he is mentioned as a possible secretary of the treasury in a McCain administration. Their friendship was forged in the Senate as they worked against the Clinton health care proposal, and cemented when McCain served as national chairman of Gramm’s own (ill-fated) 1996 presidential bid.

But ask Gramm about his influence with McCain and it’s clear that the former senator has not lost his talent for political spin. “My position [with the campaign] is, I am the senator’s friend,” he aw-shuckses in a telephone interview. “It would be a mistake to call me an economic adviser.” Calling himself “a private citizen,” Gramm claims ignorance of McCain’s appearance two days earlier on Jon Stewart’s The Daily Show.

“I’m so out of it, I don’t even know who Jon Stewart is,” he says in his trademark Georgia drawl.

Gramm might be interested in downplaying his role with the McCain campaign because, while the alliance might help with conservatives, it’s at odds with the maverick image McCain has worked so hard to project. Gramm is more closely aligned with the kind of influence-peddling represented by the Keating Five scandal, in which McCain intervened with federal regulators on behalf of a campaign contributor with a failing savings and loan. The scandal shredded McCain’s reputation and convinced him of the efficacy of reform.

In Gramm, McCain has chosen for a campaign adviser a former senator who espouses free market, conservative principles, but whose actions in public office served wealthy contributors and even himself. Exhibit A: Gramm’s cozy Enron Corp. connections. Not only did CEO Ken Lay chair Gramm’s 1992 re-election campaign, but Gramm’s wife, Wendy, earned $50,000 a year as an Enron director from 1993 to 2001 (not counting perks that included stock options). Meanwhile Gramm pushed the company’s aggressive—and ultimately self-defeating—political agenda to escape government scrutiny.

Michael Panzner, a Wall Street veteran and author of Financial Armageddon, says the massive deregulation encouraged “aggressive, swashbuckling, high-risk practices that might have been frowned upon in the banking industry, but which were viewed as typical, say, on Wall Street.” Eventually, those practices “became the modus operandi throughout the financial services industry.”

Panzner also believes that Gramm-Leach-Bliley “may have even set the stage for both the collapse and the subsequent ‘rescue’ of Bear Stearns by the Federal Reserve.” The deregulated financial services industries were “encouraged to push the envelope in terms of risk-taking, and were not entirely dissuaded from thinking that the public purse would be available if things went horribly wrong.”

Still others blame Gramm’s Commodity Futures Modernization Act. Prior to its passage, they say, banks underwrote mortgages and were responsible for the risks involved. Now, through the use of credit default swaps—which in theory insure the banks against bad debts—those risks are passed along to insurance companies and other investors.

Maryland law professor Greenberger believes credit default swaps “were a key factor in encouraging lenders to feel they could make loans without knowing the risks or whether the loan would be paid back. The Commodity Futures Modernization Act freed them of federal oversight.”

Before passage of the modernization act, the Commodity Futures Trading Commission was attempting to regulate the swaps market through rule-making. The modernization act, Gramm noted in his remarks on the Senate floor, provided “legal certainty” for the growing swaps market. That was necessary, Greenberger says, because at the time, “banks were doing these trades in direct violation of federal law.”

“Without Phil Gramm adding that 262-page bill onto an 11,000 page appropriations bill in 2000, it never would have seen the light of day,” Greenberger says. “It was a lame duck Congress … racing off to Christmas recess. It was not an orderly process.”

A more notorious feature of the modernization act was the “Enron loophole,” which allowed energy trading to escape federal oversight. It was Enron’s electronic trading that led to the California electricity crisis of 2000 and 2001, as well as Enron’s own demise.

The issue of regulating electronically traded energy futures had been a pitched battle at the Commodity Futures Trading Commission throughout the ’90s. One chairman advocated so passionately for deregulating energy futures that she persuaded her fellow commissioners to agree to a rule exempting them from oversight. Who was that? Wendy Gramm, the senator’s wife, who served on the commission from 1988 to 1993. Shortly after her resignation, she was welcomed onto the Enron board of directors, where she would ensconce herself on the happily deaf-blind-and-mute audit committee.

The impact of the “Enron loophole” has been enormous. Since its passage, the Senate Permanent Subcommittee on Investigations has concluded that the loophole contributed to inflated energy prices for American consumers. In 2006, its report found credible expert estimates that the loophole—by encouraging speculation—accounted for $20 of the price of a barrel of oil, then at $70. In 2007, the same committee blamed the loophole for excessive speculation by hedge fund Amaranth Advisors that led to the distortion of the natural gas market.

After Enron’s demise, Wendy Gramm ultimately participated in a $13-million settlement personally paid by Enron directors for insider trading, when they collectively sold some $276,000 worth of stock early in the company’s decline. Consumer advocacy group Public Citizen has reported that Enron paid Wendy Gramm between $915,000 and $1.85 million from 1993 to 2001 in salary, attendance fees, and stock options.

Increasingly, many Wall Street titans agree that Gramm’s efforts should be reversed. In May, Richard C. Griffin, founder of the $20 billion hedge fund Citadel Investment Group, told The New York Times that “fixing” Wall Street would require more regulation.

“Investment banks should either choose to be regulated as banks or should arrange to conduct their affairs to not require the stopgap support of the Federal Reserve,” Griffin said. He also told the Times he sees a need for “new government oversight of the arcane world of credit default swaps, a business with a notional value and risk of $50 trillion.”

Greenberger predicts that the fallout from Gramm’s legislation will continue to grow, with capital drying up for all kinds of borrowing, including student loans. Meanwhile, Wall Street firms have begun considering a voluntary clearinghouse system for swaps and derivatives, an acknowledgement, Greenberger says, that some sort of policing is lacking.

Warm up with Face Pulls - Pulldowns

Assisted Chins

Incline Pull - Cable

Dumbbell Press

Cable Kickbacks.

Weight - 221lbs & bulking.

~Robben~

Rack Pulls.
135lbs*10 - 255lbs*5, 5, 5, 5.

Seated Bicep Curls.
60lbs*10 - 70lbs*10 - 80lbs*10 - 90lbs*10 - 100lbs*5, 6, 6.

Dumbbell Rows.
25lbs*10 - 35lbs*10, 10 - 45lbs*10, 10, 10.

Lying Hamstring Curls.
90lbs*10 - 110lbs*8, 8, 8.

Ab Crunches - Weighted.
50lbs*25 - 80lbs*30, 30 - 90lbs*30.

Harrop Curls.
15, 15, 15, 15.

~Robben~

Seated Calves.
Full rep @ 70lbs*15, 15, 15, 15. Half rep@ 70lbs*10, 10, 10, 10.

Squats - Zercher.
85lbs*8 - 145lbs*6 - 205lbs*5 - 225lbs*5, 5, 5.

Leg Extensions.
135lbs*12 - 150lbs*8 - 180lbs*6, 6 - 195lbs*5 - 210lbs*5.

Hip Abductor.
110lbs*20 - 130lbs*30 - 150lbs*30, 30.

~Robben~

Incline Press - Barbell - Chains 60lbs.
155lbs*10 - 175lbs*5 - 195lbs*5 - 225lbs*4, 2, 2.

Tricep Pressdowns.
70lbs*10 - 90lbs*10, 10, 10, 10.

Incline Pulls.
160lbs*10, 10 - 170lbs*10, 10, 10.

Cable Curls - Done off a incline bench.
55lbs*10, 8 - 60lbs*5, 5.

Standing Side - Dumbbell.
20lbs*15 - 25lbs*10 - 30lbs*10 - 35lbs*10.

~Robben~

Squats - Chains were used.
135lbs*12 - 185lbs*8 - 225lbs*6 - 245lbs*5 - 285lbs*5,4 - 315lbs*4 - 335lbs*2

Seated Calves - Chains were used.
105lbs*15, 15, 15, 15.

Leg Extensions - Chains were used.
120lbs*12 - 180lbs*7, 7, 7, 7.

Leg Press - Messed around with some half rep stuff.
285lbs*10 - 375lbs*10, 10, 10

~Robben~

Face Pulls & Pulldowns.
80lbs*12, 12, 12, 12.

Lat Pulldowns.
130lbs*12 - 170lbs*8, 10 - 220lbs*6, 5, 5, 3.

Assisted Chins - Pause -N- Pull.
70lbs*12, 12 - 60*9, 9.

Dumbbell Rows.
45lbs*10 - 50lbs*10 - 60lbs*10 - 75lbs*10, 10.

Seated Military Press - Dumbbells.
50lbs*10 - 60lbs*5, 5, 5.

Seated Laterals - Machine.
30lbs*10 - 60lbs*10 - 70lbs*15, 15.

Weight - 221lbs - Bulking.

~Robben~

Superset - Flat Bench, Barbell Pullovers, Barbell Curls.

Flat Bench - 60lbs of chains were used.
195lbs*8 - 215lbs*5 - 235lbs*5 - 265lbs*2, 2 - 245lbs*5.

Pullovers - Barbell.
75lbs*8 - 95lbs*8, 8, 4, 4.

Barbell Curls.
75lbs*8 - 95lbs*10, 8, 8, 8.

Seated Dips.
205lbs*12 - 220lbs*10, 10, 9.

Superset Dumbbell Flyes Incline - Dumbbell Press Incline.

Incline Flyes - Dumbbell.
20lbs*10 - 25lbs*10 - 30lbs*10 10.

Dumbbell Press - Incline.
20lbs*10 - 25lbs*10 - 30lbs*10, 10.

Spent!

~Robben~

Squats - Chains - 60lbs.
135lbs*6 - 195lbs*5 - 245lbs*5 - 295lbs*5 - 355lbs*3, 3, 3.

Seated Calves - Chains - 60lbs.
Full Reps - 85lbs*15 * 4 Sets - Half Reps - 85lbs*15 * 4 Sets.

Smith Lunges.
85lbs*12 - 105lbs*12, 12, 12.

~Robben~

Standing Lat Pulldown.
120lbs*10 - 170lbs*5, 5, 5.

Seated Lat Pulldown.
170lbs*5, 5, 5.

Assisted Chins.
80lbs*8, 11, 7, 11.

Dips.
10, 10, 10, 10.

Kickbacks - Dumbbell.
25lbs*10, 10 - 30lbs*10, 10.

~Robben~