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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
May 19, 2004
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
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