Improvements Needed in the Enforcement of Crude Oil Reseller Price Controls

EMD-79-57: Published: May 29, 1979. Publicly Released: May 29, 1979.

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A review was made of the government's handling of crude oil reseller cases involving probable violations of federal price control regulations.

The Department of Energy (DOE) and its predecessor agencies have not adequately enforced crude oil resellers' compliance with legislative requirements. Key issues involving the interpretation of pricing regulations have not been resolved, hindering effective auditing. Despite recently improved coordination with the Department of Justice in the handling of criminal cases, DOE still does not draw sufficiently on Justice's expertise at key decision points, and needs to put its operating arrangements with Justice in writing. Adequate priority has not been given to pricing audits, and DOE does not appear to be committing adequate resources to ensure the quality of individual audits and the adequacy of overall audit coverage. Excess time spent by auditors and investigators in establishing the willfulness of violations, going beyond the point at which cases could have been referred to Justice, has limited coverage and could jeopardize Federal prosecution of some violations due to statutory limitations.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Energy should enter into a memorandum of understanding with the Attorney General to: (1) establish written procedures for referring criminal cases to Justice, defining both agencies' responsibilities clearly; (2) review staff assignments to ensure assignment of an adequate number of qualified auditors to ongoing audits to achieve timely completion; (3) provide the audit resources necessary to fulfill all aspects of the revised work plan for fiscal years 1979 through 1980, including pricing audits; (4) monitor audit results and increase coverage if a high incidence of violations is seen; and (5) develop and report to Congress on the details and status of a specific plan to promptly resolve all regulatory issues. In addition, the Attorney General should review opportunities to expand informal cooperation channels with DOE, including regional level discussions of cases prior to formal referral.

    Agency Affected:

 

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