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Senator Wyden Maintains Hold On FTC Nominee Over Gas Prices

The Wall Street Journal: Senator Wyden Maintains Hold On FTC Nominee Over Gas Prices

By MARK WIGFIELD

Of DOW JONES NEWSWIRES

June 3, 2004

WASHINGTON — Sen. Ron Wyden, D-Oregon, said Wednesday he would continue to block the Bush administration’s nominee for chairwoman of the Federal Trade Commission after she failed to convince him that she would aggressively police gasoline prices.

Wyden’s questioning of Republican nominee Deborah Majoras dominated the confirmation hearing as he pushed her to change direction of an agency he said has failed to protect consumers from what he called anticompetitive practices in the gasoline industry.

“That is business as usual,” Wyden said after she answered his question about what she would do about gasoline prices during her first day in office. Prices in Oregon have approached $3 a gallon, Wyden said.

The White House nominated Majoras, 40, to replace Chairman Timothy Muris, who is returning to academia. Wyden’s “hold” blocking a vote on Majoras’s nomination in the Senate could result in GOP retaliation against another FTC nominee, Democrat Jonathan Leibowitz, 45.

Leibowitz was named by the White House to replace outgoing Commissioner Mozelle Thompson on the five-member independent agency.

Sen. Wyden and Sen. Barbara Boxer, D-Cal., pushed nominee Majoras for a commitment to investigate why Shell Oil Co., a unit of Royal Dutch Petroleum Co. (RD) plans to close a refinery in Bakersfield, Calif., despite lack of capacity in the industry. Shell acquired the refinery in 2001 after the FTC forced Texaco to sell its U.S. refining assets in a merger that created ChevronTexaco Corp. (CVX).

Shell has said it would close the refinery on Oct. 1 because it wants to divert more of its San Joaquin Valley heavy crude oil to its Martinez refinery in the Bay Area instead of using it in Bakersfield, according to press reports. California Attorney General Bill Lockyer has hired an outside expert to find a buyer for the refinery.

“I would treat any proposed reduction of refining capacity with great seriousness,” Majoras told the senators. Pressed by Wyden to outline what specific action she would take, Majoras said it is “difficult to commit to specific actions when I have no facts before me.”

Majoras was a top deputy at the Justice Department’s antitrust division from April 2001 to December 2003. While her tenure included negotiating settlement of the government’s landmark Microsoft Corp. (MSFT) antitrust case, the work she did in the five months after she returned to her old law firm, Jones Day, attracted more attention during the hearing.

Majoras said she might have to recuse herself from cases involving ChevronTexaco because she did a “small amount” of work for the company at Jones Day. She called the possibility of recusal “remote.”

But Boxer said that is “a big problem for us on the committee,” especially concerning the Bakersfield refinery. “We need a chairman who can resolve this.”

Wyden’s criticism comes in the wake of a May report by Congress’ General Accounting Office critical of the FTC’s approval of more than 2,600 mergers in the U.S. petroleum industry in the 1990s. The report found that the mergers increased market concentration substantially, leading to gasoline prices increase of 1 cent to 2 cents a gallon.

FTC Chairman Timothy Muris was harshly critical of the report, asserting its economic models were flawed and analysis unreliable. Wyden asked Majoras if she disagreed with Muris’ views.

“I have an open mind,” she said. “I will look at it closely to see if the criticism is warranted.”

She also pledged to re-examine the FTC’s gasoline price monitoring program, and pledged to appoint a special energy counsel at the FTC. But that wasn’t enough for Wyden.

“She still can’t tell me how she’ll get this agency off the sidelines and in the fight to protect American consumers or even whether she can participate, and I am determined to force a change from the top down in the way this agency deals with high gasoline prices,” he said in a statement after the hearing.

By Mark Wigfield, Dow Jones Newswires; 202-828-3397;

[email protected]

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