May 19, 2004

Wyden Placing "Hold" on FTC Nominee Deborah Majoras

As gasoline prices rise, nominee will not commit to taking concrete action to stop anti-competitive oil company practices that cost consumers at the pump

Washington, DC - U.S. Senator Ron Wyden (D-Ore.) today announced his intention to place a "hold" on the nomination of Deborah Majoras to become Chair of the Federal Trade Commission (FTC). Wyden, who has called on the FTC in the current and previous Administrations to take action to protect consumers from high gasoline prices, received no indication from Majoras that under her leadership the agency would take any steps to end numerous and well-documented anti-competitive practices that drive up gasoline prices nationwide and particularly in the Northwest. Before his face-to-face meeting with Majoras, Wyden submitted a letter detailing his concerns about the FTC's inaction on oil and gasoline issues and asking whether Majoras would lead the agency to respond. (The text of Wyden's letter is below.) During their meeting, Wyden received no assurances from Majoras that the agency would change its policy of inaction to protect consumers. "In this Administration and in the Clinton Administration, Federal Trade Commission political appointees have sat on their hands while the anti-competitive practices of the oil industry gouge American consumers at the gas pump. I have given Ms. Majoras a number of opportunities to explain to me what she plans to do differently as a Commissioner, and she has made it abundantly clear that she has no specific plan to energize the FTC to begin fighting for consumers," said Wyden. "I don't intend to allow yet another FTC Commissioner to collect a $145,000 salary to do nothing while unnaturally high gas prices jeopardize American jobs and American families." As a matter of policy, Wyden publicly announces any "hold" he places on nominees or legislation. Wyden has led efforts to end the practice of "secret holds" in the U.S. Senate. He will place a statement in the Congressional Record today indicating his intention to hold the Majoras nomination until he receives concrete information as to how she plans to lead the agency to more aggressively protect consumers. ************************************************* May 14, 2004 Deborah Majoras Jones, Day, Reavis & Pogue 51 Louisiana Avenue, NW Washington, DC Dear Ms. Majoras: I am writing to ask your views on what I consider to be one of the most important consumer protection issues the Federal Trade Commission (FTC) has responsibility to oversee - protecting consumers from anti-competitive practices that raise gasoline prices at the pump. For several years, I have pressed the FTC to take more aggressive action on this critical consumer issue, and I have frequently been disappointed by the FTC's response. For example, more than two years ago, I asked FTC Chairman Tim Muris to work with me on legislation to provide the FTC with additional authority to address anti-competitive practices, such as redlining, that increase prices at pump in highly concentrated gasoline markets. I made this request because the FTC's own reports on West Coast Gas Prices and on Midwest Gas Prices had made similar findings about how anti-competitive practices are rampant in gasoline markets. Unfortunately, these reports also concluded that these practices cannot be prosecuted under the antitrust laws on the books today. Despite this lack authority to address documented anti-competitive practices harming competition and consumer, Mr. Muris took the position that the FTC did not need additional authority in this area. Subsequently, I sponsored legislation, the Gasoline Free Market Competition Act (S. 1737), to provide the FTC with additional tools to remedy anti-competitive abuses in highly concentrated markets. My first question is whether if you are confirmed as FTC Chair, you will support passage of my legislation? Alternatively, if you do not believe my legislation is the best approach to remedy the anti-competitive problems documented by the FTC, will you recommend other legislation to address the problems and what would that legislation entail? Second, I sent letters to FTC Chairman Tim Muris in February and March of this year requesting the FTC to investigate Shell Oil's plan to close its 70,000 barrel-per-day refinery in Bakersfield, California on October 1, 2004. I also urged that the FTC consider taking action to ensure the refinery is not shut down, which could have a significant impact on gasoline supply and price not only in California but also in the Pacific Northwest. In response to my letters, I received a two paragraph response stating that my request would be "seriously considered." However, to date, the FTC has not initiated an investigation or taken other action to prevent the Bakersfield refinery from closing. My question for you is whether if you are confirmed as FTC Chair, you will direct the agency to conduct the investigation of the Bakersfield refinery closure that I requested several months ago and/or take other action to prevent closure of the Bakersfield refinery? Finally, FTC Chairman Muris has admitted to other Western Senators that he considers the recent record-high prices in our region to be "anomalies" outside the price ranges that FTC models predict should occur if gasoline markets are functioning properly. If you are confirmed as FTC Chair, what would you do to address these types of anomalies and their impact on consumers? Specifically, would you be willing to provide reports to Congress in all cases of gasoline price anomalies the FTC finds to be above the prices predicted by the agency's models and to make recommendation to Congress on what should be done to lower these high prices? I look forward to discussing your responses to these questions and any other actions that could provide relief to consumers currently suffering from record-high gasoline prices. Sincerely, RON WYDEN U.S. SENATOR