With gas prices climbing to unsavory highs, President Obama has ordered the creation of an oil-markets task force at the Department of Justice.
Questions have already been raised over whether DoJ can actually do anything to help with oil prices, or if this is more of a show move, wherein Obama appears to be taking an active measure.
It's worth pointing out that, in the spring of 2008, as oil prices rose and as Republicans started blaming then-House-speaker Nancy Pelosi and making a lot of noise about domestic energy production in the presidential election year, House Democrats actually called for something similar.
In May 2008, House Democrats passed a bill by then-Rep. Steve Kagen (D-Wisc.) that would have required DoJ to create an oil antitrust task force, which would have sought out unfair collusion in U.S. and foreign oil markets. From a story I wrote about it for The Hill:
House Republicans have recently blamed Pelosi for high gas prices. In floor speeches and press releases, they have pointed to an increase in gas prices since Democrats took the majority in Congress in 2006, dubbing the increase the "Pelosi Premium."
The bill would create a DoJ task force to investigate, and report annually to Congress on, the effect of international oil cartels, potential price gouging, and potential collusive behavior to restrict oil production. The task force would enforce oil companies' compliance with existing antitrust laws, and could recommend changes to those laws to Congress.
Foreign entities, under the bill, could be prosecuted in U.S. courts for collaborating to restrict production, set the price of oil, or restrain the trade of oil, if those actions affect the price of petroleum products in the U.S.
The bill also calls for a Government Accountability Office (GAO) report on how oil company mergers may have affected the price of oil.
The bill never made it to a Senate vote. Legislation moves slowly in the summer of a presidential election year.
Congress saw other measures with similar aims, around that time. The No Oil Producing and Exporting Cartels Act (NOPEC), proposed by Sen. Herb Kohl (D-Wisc.) and John Conyers (Mich.), the top Democrat on the House Judiciary Committee, would also empower DoJ to go after foreign oil collusion. That bill has been proposed in numerous years past, and the Senate Judiciary Committee passed it earlier this month.
Obama and Attorney General Eric Holder are going about things differently, but the basic idea is the same: To combat high oil prices, it sets the DoJ to pursue any angle it can in cracking down on market practices.
The new task forces will have more to do with oil trading and investment practices, and less to do with foreign collusion, the main focus of the 2008 bill and NOPEC. Attorney General Eric Holder announced two task forces Thursday, describing them in a memo thusly:
The Oil and Gas Price Fraud Working Group will explore whether there is any evidence of manipulation of oil and gas prices, collusion, fraud, or misrepresentations at the retail or wholesale levels that violates state or federal laws and harms consumers or the federal government as a purchaser of oil and gas. The working group will also evaluate developments in commodities markets and examine investor practices, supply and demand factors and the role of speculators and index traders in oil futures markets.
The Financial Fraud Enforcement Task Force was established by President Obama to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes and other laws prohibiting financial fraud. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement agencies who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
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