Dewine, Kohl Continue Efforts to Reduce Gas Prices

DEWINE, KOHL CONTINUE EFFORTS TO REDUCE GAS PRICES

U.S. Senators Mike DeWine (R-OH) and Herb Kohl (D-WI), Chairman and Ranking Member of the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights, today introduced legislation to permit the U.S. Department of Justice and the Federal Trade Commission to bring actions against foreign states - such as members of the Organization of Petroleum Exporting Countries (OPEC) - for collusive practices in setting the price or production of petroleum products.

"Through setting prices and production levels, OPEC attacks our economy by raising gasoline prices at the pump, by raising heating oil costs for homes, and by raising jet fuel prices to airlines," said Senator DeWine. "We cannot stand idly by while OPEC brazenly fixes prices in violation of our antitrust laws. Even though oil prices have been at historic highs, OPEC's hunger for even higher prices cannot be satisfied. It voted in December to raise prices even more. Our bill arms the Administration with the necessary weapon to combat these illegal practices and will hold the OPEC cartel to the same standards we hold all other businesses."

"OPEC should play by the same rules of free and fair competition as apply to the rest of the economy," said Senator Kohl. "People from Wisconsin and throughout the nation suffer real consequences every day because of OPEC's actions. Higher oil prices mean higher prices at the gas pump, higher prices for manufactured goods, and higher home heating or cooling bills. We need to ensure that our consumers are not being burdened with unfair and illegal additional costs. At a minimum, our authorities should be able to take legal action to combat illegitimate price-fixing by the oil cartel."

In 1979, a federal district court found that OPEC's price-fixing decisions were "governmental" - not "commercial" - acts and accordingly they were protected by the Foreign Sovereign Immunities Act. Subsequently, in 1981, a federal court of appeals declined to consider the appeal of that antitrust case based on the so-called "act of state" doctrine, which holds that a court will not consider a case regarding the legality of the acts of a foreign nation.

NOPEC effectively reverses these decisions by making it clear that OPEC's activities are not protected by sovereign immunity and that the federal courts should not decline to hear such a case based on the "act of state" doctrine. It clears away these judicially-created roadblocks so the Department of Justice or Federal Trade Commission could bring an antitrust case against OPEC for its price-fixing behavior.

Senator DeWine and Kohl's efforts are in response to the continuing dramatic increase in gasoline and other fuel prices, which has severely harmed American consumers, workers and businesses throughout the country, especially in the Midwest. If this bill were to become law, it would force OPEC to begin pricing in a competitive, free market manner or face the possibility of being prosecuted for civil or criminal antitrust violations.

"Looking through any newspaper in Ohio over the past few weeks, I see story after story about the effects these higher prices are having on Ohio's consumers. This legislation is more timely and necessary than ever before," stated DeWine.

Senators DeWine and Kohl have introduced NOPEC in June 2000, March 2001 and April 2004. Twice the legislation was voted out of the Judiciary Committee without objection. The bipartisan bill is co-sponsored by Senators Patrick Leahy (D-Vermont); Charles Grassley (R-Iowa); Russell Feingold (D-Wisconsin); Olympia Snowe (R-Maine); Charles Schumer (D-New York); Dick Durbin (D-Illinois); Carl Levin (D-Michigan); Barbara Boxer (D-California), Ron Wyden (D-Oregon); Jon Corzine (D-New Jersey); and Mark Dayton (D-Minnesota).

http://dewine.senate.gov/