[Distribution of Petroleum Overcharge Settlement Funds]

In response to a congressional request, GAO examined the validity of the Department of Energy's use of various provisions in consent orders to settle alleged violations of federal petroleum price and allocation regulations through payments by the producer. Energy has been permitting producers to distribute overcharge settlement funds to parties who have no clear connection to the overcharges which gave rise to the settlements. GAO found that Energy frequently allows distribution without prior efforts to identify those overcharged. As a result, payments have been made to institutions that were not actually injured by the overcharges and that lack an appropriate connection to the overcharges. Further, overcharged customers have been denied an opportunity to present claims through Energy's established procedures. GAO held that Energy does not have the legal authority to agree to consent order provisions that distribute settlement funds directly to parties not actually injured by the overcharges. GAO also stated that the only practical distribution plan for funds remaining after all potential overcharged parties have been located and paid is to deposit them in the Treasury as miscellaneous receipts and leave further distribution to Congress.