Getting Getty

For the poor, help with heat

Now that they are comfortable with their roles as corporate Medicis, sponsoring museum exhibitions and importing culture from the BBC for educational television, the oil companies appear to be going into social welfare programs. When Getty Oil last week signed a consent decree with the Department of Energy, which had accused the company of violating federal price regulations on crude oil, natural gas liquids and refined products, the $75 million settlement included a novel provision. Getty agreed to pay one third, or $25 million, into an escrow account to be administered by the DOE to "provide relief to economically disadvantaged people in meeting their energy expenses for this winter." These funds will supplement the $1.35 billion in Government grants that Congress has appropriated to help the poor pay their heating bills.

The DOE fund may soon be swollen like a Christmas stocking with more cash. In the past 22 months, Paul Bloom, 40, the DOE's special counsel, has brought 150 enforcement actions totaling $7.2 billion in claims against 35 large oil companies for violating the complex, controversial federal price regulations. So far the DOE has won consent decree settlements amounting to $660 million from Kerr-McGee, Cities Service, Phillips, Gulf, Mobil and other companies. They agreed to settle by posting lower future price increases than the maximum allowed under Government regulations. Getty also chose this method for the remaining $50 million of the consent decree. Now the pipeline is so loaded with pending claims cases that Government lawyers are requiring the companies to stand in line to negotiate settlements.

The DOE's Office of Special Counsel for Compliance, which has more than 400 auditors and 200 lawyers, was set up nearly two years ago to uncover profiteering. Because past efforts nailed few alleged offenders, the DOE turned for advice to a sister agency, the Securities and Exchange Commission. Bloom had the power to negotiate settlements, and he modeled them after the SEC's consent decrees. Companies that sign them with the DOE neither admit nor deny wrongdoing, but agree to stop what they have been doing and make a financial settlement.

Though some of its oil competitors criticized Getty for giving in too easily, President Sidney Petersen signed the consent decree at least partly to avoid long litigation and a public relations black eye. Still hanging over the company are more DOE claims of at least $160 million for other alleged instances of overpricing oil and natural gas. This time Getty appears ready to go to court because executives are convinced they can prove to a judge that DOE is engaged in retroactive rule making.

In their defense, the oil companies also complain that DOE pricing regulations are contradictory and confusing. Oil executives would love to see some company take the DOE to the mat and win in an all-out legal battle. So far Bloom has brought five cases to the Office of Hearings and Appeals, a Government judicial body, and has won four. But in an unrelated case where feisty Mobil was seeking an exemption from pricing regulations, courts ruled that DOE had improperly refused to let the oil giant include $138 million in costs in its petroleum coke prices. After that decision, Mobil could not resist chiding DOE officials for being "strangely silent" when "the courts tell them they are wrong."

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