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Energy: Getty Oil Settlement

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Report Type Reports and Testimonies
Report Date Oct. 14, 1980
Report No. 113726
Subject
Summary:

GAO testified on the legality of the final plan of the Department of Energy (DOE) to distribute the funds collected from the Getty Oil Company under the terms of a consent order. The consent order settled all claims and disputes concerning the manner of Getty's compliance with oil price and allocation regulations. The order required Getty to deposit funds in an escrow account to be disbursed at the discretion of DOE. The order did not provide a method for distribution of the funds or explain the purposes for which the funds could be used. DOE has developed, adopted, and begun implementation of a plan for distribution of the funds without regard to whether the distributees were affected by the overcharges in the first instance. GAO feels a reasonable effort to make restitution is mandatory for funds collected under the remedial or consent orders in question. DOE does have implied authority to order a violator to return overcharges directly to its customers. Under the DOE plan, $21 million was distributed to 20 State Governments in proportion to Getty's total heating oil sales in those States. The money could only go to low income residents to defray heating oil costs or to fund energy-related projects. The remaining $4 million was distributed to low ranking servicemen who live off base in a State where Getty was doing business. At no time has DOE attempted to return any portion of the funds to persons who were overcharged. Bona fide customers who bought oil at inflated prices for agricultural purposes or who were not below the poverty level would not be eligible for any part of the refund. DOE has ignored its own regulatory requirement to ascertain the identity of customers who have been overcharged and make restitution. In cases where the overcharged customers can not be identified, the funds must be deposited in the Treasury as miscellaneous receipts. The DOE program goes beyond restitution as now authorized by law and regulation, and the distribution of moneys collected by DOE must await further statutory sanction.

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