01.31.06

Cantwell: Exxon Mobil’s Attempt to Short-Circuit Price-Gouging Investigation Should be Made Public

Oil giant raked in record-breaking profits while Americans continue to face highest ever gas prices, home heating costs

WASHINGTON, DC – Tuesday, U.S. Senator Maria Cantwell (D-WA) demanded that Exxon Mobil’s attempt to limit the FTC investigation into possible gas price-gouging be made public. On January 30, 2005 Exxon Mobil reported $36 billion in 2005 profits, more than any other company has ever earned in during a single year. The company’s record profits came at a time when working families across America struggled with ever-increasing gas and home heating costs.

"Exxon Mobil’s continued attempts to hide information from Congress and the American people are troubling," said Cantwell, a member of the Senate Commerce and Energy and Natural Resources Committees. "When gas prices are soaring and oil companies are raking in profits hand over fist, we need to make sure everybody’s playing by the rules and the American public isn’t getting the short end of the stick. We’ve repeatedly asked oil companies to explain pricing policies and let federal investigators do their job. It’s time oil companies cooperated."

Cantwell’s letter follows a petition submitted by oil giant Exxon Mobil in which the company asked the FTC to limit the scope of its investigation by omitting data related to the company’s taxes. The company also failed to provide this information to Congress despite direct requests from senators following last fall’s joint Senate Energy and Commerce Committee hearing on energy profits and pricing. While Exxon Mobil has reportedly withdrawn its petition to the FTC, Exxon has sought to keep confidential documents related to the appeal. Cantwell believes that Exxon as well as other major oil companies should fully cooperate with the Commission’s ongoing price gouging investigation.

"The law is clear," said Cantwell. "Exxon Mobil’s pattern of hiding important information behind closed doors is troubling. This is special treatment for special interests. The American public deserves to know that Exxon Mobil is going out of its way to stall investigations and cloud data."

In November, executives from major oil companies spoke to the Senate Energy and Commerce Committees about nationwide concerns of gas price gouging. Soon after the hearing, The Washington Post published an article which cast doubt on the truthfulness of their testimony, specifically regarding the companies’ participation in Vice President Dick Cheney’s 2001 Energy Task Force.

Before that hearing, Cantwell led a group of Democratic senators in requesting that oil company executives testify under oath when they appeared before the Committees to explain their pricing and exporting practices and the recent run-up in American fuel prices. That request was denied. Following the hearing, in addition to questions being raised about the truthfulness of their testimony, a number of the oil companies failed to provide necessary information about their fuel inventories, trading activities, and exports, despite commitments made by CEO’s to Cantwell. In filing their petition to limit the FTC investigation, Exxon Mobil tried to conceal that same information yet again.

Cantwell has also introduced legislation to make gas price-gouging a federal crime and ensure greater market transparency by requiring oil companies to open their books. The Energy Emergency Consumer Protection Act has 30 co-sponsors.

Cantwell is the chair of the Senate Democrats’ Energy Independence 2020 national campaign, working to break America’s overdependence on foreign oil, to protect working families from skyrocketing energy costs, and to stop unfair market manipulation by energy companies. Cantwell is fighting to stop price gouging, provide relief from high home heating costs, and invest in reliable sources of affordable fuel.

[The text of Cantwell’s letter to the FTC follows below]

January 31, 2006

Chairwoman Deborah Platt Majoras

Federal Trade Commission

600 Pennsylvania Avenue, N.W.,

Washington, D.C. 20580

Dear Chairwoman Majoras,

As you know, Congress directed the Federal Trade Commission (FTC) to conduct an investigation of potential gasoline price gouging in the wake of Hurricanes Rita and Katrina, as part of the Fiscal Year 2006 Science, State, Justice, Commerce, and Related Agencies Appropriations Act (Public Law No. 109-108). It has recently come to our attention that Exxon Mobil Corp. earlier this month filed with the Commission a petition to limit the scope of the FTC’s inquiry in this matter, in an effort to prohibit the Commission from reviewing data related to the company’s tax information.

It is perhaps not surprising that Exxon would challenge the Commission’s attempts to acquire this information, given that the company previously failed to provide similar data when it was requested as part of the Senate Commerce and Energy Committees’ joint hearing into energy pricing last November. Nevertheless, we believe that the law directing the Commission to investigate this matter is clear. It specifically requires that the FTC’s price gouging investigation include a "summary of tax expenditures" for companies with total U.S. wholesale sales of gasoline and petroleum distillate exceeding $500 million in calendar year 2004.

It is crucial that the Commission conduct a thorough and rigorous investigation of the dramatic spike in energy prices that occurred in the wake of last year’s tragic hurricanes, as many important policy questions about our nation’s susceptibility to price shocks, the sufficiency of our existing fuel reserves, and the adequacy of existing consumer protections remain the subject of substantial debate. Any attempt to short-circuit the investigation specifically authorized by Congress must not be tolerated. As such, we respectfully request that the FTC publicly release all of the documents related to Exxon’s—or any other company’s—attempt to skirt disclosure or delay the filing of information necessary to complete your ongoing price gouging investigation.

Sincerely,

Maria Cantwell United States Senator