A Department of Energy official, meeting privately yesterday with consumer activists, acknowledged "a serious leak problem" in his agency.
DOE official David Bardin called in representatives of the Ralph Nader Congress Watch group after publication of a memorandum written by an oil industry lobbyists, suggesting that the oil lobby was prievy to internal DOE documents.
According to the memorandum, the American Petroleum Institute even had seen a copy of a letter from Bardin to Sen. Edward Kennedy (D-Mass.) before the letter was sent.
"I do have a very serious leak problem," Bardin reportedly told Mark Green and other representatives of Congress Watch. "I am very disturbed by this memorandum, and anyone who showed API a draft of my personal correspondence to Kennedy before it was sent, will receive appropriate action."
But Bardin fell short of issuing a public response. He would not respond to telephone calls from The Washington Post and reportedly told the consumer activists that "nothing can reassure the crowd."
"He said he was disturbed, but the sure didn't act it," said Green after the meeting.
On Monday, Green kicked of the controversy by announcing that the API, an oil industry trade association, had access to DOE internal documents, often before such documents were public.
API and its lobbyists may have used the information from those documents to influence pro-industry decisions at the agency, acording to the API memorandum written by one of its lobbyists, and obtained and released by Green.
API lobbyist John Iannone indicates in the memo that he had premature access to, and advance notice of, proposed rules and actions at DOE.
In a letter hand-delivered to Energy Secretary James Schlesinger on Monday, Green added that "the Iannone memorandum describes an extraordinary infiltration of DOE decision-making by an oil lobbyist. According to this document, DOE officials routinely leak draft regulations to API before the public sees them and frequently meet with oil lobbyists in secret, off-the-record meetings."
Energy Department officials were reported upset over the contents of the Iannone memo.
"The memorandum better not be accurate," said James Bishop, chief spokesman for DOE. "To a large extent, it sounds like the puffery from a lobbyist who is writting his own performance report. To the extent that that is not the case, all the specifics will be investigated."
A spokesman for API confirmed the authenticity of the document, which he said was a quarterly report from Iannone to his superiors. The spokesman released a statement that further defended the memorandum's contents.
"We try to keep informed of actions contemplated by all branches of government, which include federal regulatory agencies," said the API statement.
"To do this, we establish and maintain contacts with members of all government groups," the statement continued. "These contacts are a two-way street. For example, all groups present a regulatory agency with their view and provide technical information. Similarly, the agency provides them with advance notice concerning actions it is contemplating so that the impact can be understood before final action is taken."
The statement concluded by saying that other groups, like consumers and the press, also receive certain advance notice. "The actions in question were entirely legal," the API said. "We are however, looking into the matter thoroughly."
The three-page memorandum in question is titled: "Quarterly Report - John Iannone.January - March, 1978." It lists 18 points of action taken by Iannone toward furthering the cause of his client, the oil industry, by making the DOE "more producer-oriented."
In eight separate instances, Iannone described advance notice given him of certain DOE action - In some cases, Iannone claims to have discredited DOE arguments using the agency's own background documents.
In one instance, Iannone said, "I received copies of internal DOE studies on financial analysis which were used as background for the (Texas Sen. John) Tower and (Ohio Rep.) Charles Vanik letters. Those documents were carefully distributed to members of Congress and were used to discredit DOE's arguments about excess cash (in oil industry coffers) and adequate pricing incentives under the National Energy Policy."
In another case, Iannone claimed to receive an early draft of Subpart K of the Federal Energy Administration's mandatory petroleum price regulations that would increase the categories of costs that the oil industry could use merely to "pass through" price increases without lengthy hearings. Although an amendment to Subpart K would ease the administrative burden on FEA, consumer groups argue that it will increase prices.
According to Iannone's memo, the "industry comments (he placed) on an advance copy of Subpart K were incorporated into the draft final rule making by DOE."
Iannone was unavailable for comment.
DOE officials could not comment on the Subpart K allegations because, according to one source, they haven't even seen the final draft of the amendment discussed.
In his letter to Schlesinger, Green called on the secretary to launch a "top-to-bottom investigation of DOE-oil industry collaboration."
Green specifically recommended that Schlesinger "issue department regulations explicitly prohibiting off-the-record meetings between the DOE staff and outside interests on pending or developing regulations; requiring that all those seeking to influence department decisions disclose whom they represent, how much they are paid, whom they meet with in DOE and on what subjects . . ."