[Legality of DOE Activities in Administration of Oil Overcharge Settlement Funds]

GAO reviewed the legality of the Department of Energy's (DOE) Office of Hearings and Appeals (OHA) administration of oil overcharge settlement funds currently retained in a U.S. Treasury interest-bearing trust account. GAO noted that: (1) the Entitlements Program distributed the benefits of price-controlled crude oil equally to all refiners through money transfers based on refiners' access to the crude oil; (2) refiners who suffered particular hardship or inequity were entitled to exception relief; and (3) if OHA determined that a refiner was injured by crude oil overcharges and that a portion of the settlement refund held in escrow corresponded to that injury, OHA had to use that portion of the overcharge to pay adjudicated exception relief. GAO found that: (1) DOE procedures are specifically applicable to those situations in which DOE is unable to readily identify persons who are entitled to refunds or ascertain the amounts that such persons are entitled to receive; (2) certain direct purchasers of crude oil and consumers of refined petroleum products, absorbed a determinable portion of the overcharges on the products they purchased; (3) DOE regulations require OHA to institute appropriate proceedings to distribute overcharge funds; (4) if the court determines that a specified portion of the crude oil overcharge funds correspond to injury, and if OHA limits recovery to claimants with adjudicated exception relief claims, OHA could make such payments although they would not constitute restitution; and (5) DOE regulations must be regarded as legal requirements governing OHA administration of overcharge refunds and must take precedence over a statement of policy. GAO also found that: (1) DOE cannot deposit escrow account funds directly into the Treasury without specific legislative or judicial authority; (2) OHA acted prematurely in processing claims and segregating payments for exception relief claimants since the factual underpinnings for its decision were still at issue; and (3) if the courts adopt the finding that it is impossible to identify and make payments to parties harmed by crude-oil overcharges, OHA could legally make payments from a designated escrow fund to claimants with entitlement exception relief.