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White Collar Crime in the Oil Industry - Joint Hearings Before the House Subcommittee on Energy and Power and the House Subcommittee on Crime, May 30, and June 4, 1979

NCJ Number
75605
Date Published
1980
Length
237 pages
Annotation
Witnesses from the Department of Justice (DOJ), Department of Energy (DOE), the General Accounting Office (GAO), and the Federal Bureau of Investigation (FBI) testified before two House of Representative committees concerning oil reseller frauds and the Federal Government's failure to investigate white-collar crime committed by the oil industry.
Abstract
Opening statements by committee chairmen noted that although consumers have been bilked out of billions of dollars since 1975 by oil companies selling price-controlled oil back and forth to inflate prices. Only the Florida Power Corporation has been successfully prosecuted. A U.S. attorney from Tampa first explained how Florida Power's irregular practices came to his attention. Then he and a U.S. attorney from Texas answered questions from committee members on oil reselling frauds known as daisy chains, their relations with the DOE, the role of the media in exposing these frauds, cooperation from the FBI, involvement of the major oil companies in fraud, and investigative tactics. A DOE attorney described the department's failure to support his investigations of oil reselling frauds in Texas in 1977 and 1978 which finally led him to report these problems secretly to the congressional committee. Two lawyers employed by the Federal Energy Administration, the DOE's predecessor, at the time of this incident were questioned about their involvement in the stalled investigations. Representations from GAO summarized their 1978 review which found inadequacies in Federal enforcement of oil pricing regulations. In the second day of hearings, DOJ attorneys and officials from the FBI detailed their efforts to combat oil industry fraud. These witnesses were questioned extensively by committee members concerning cooperation with DOE, factors inhibiting investigations, the Conoco case, their opinions regarding previous testimony alleging DOJ failure to support DOE investigations in Texas, and the GAO review. The extent of the current black market for oil and legal limits on DOE investigative authority were also discussed.