Gulf Oil Corp, and the Atlantic Richfield Co. yesterday filed suit in the U.S. District Court to try to force the Department of Energy to disclose information about alleged destruction of documents and secret communications related to charges that the seven major U.S. oil companies overcharged consumers $1.7 billion for crude oil.
In a 50-page complaint, the two oil companies contend that one of the documents allegedly destroyed was an issues paper and contains information about the department's own interpretation of its pricing regulations that would be key to the oil companies' defense against the charges.
The oil companies argue that if they get access to the issues paper, they can show that the department has never understood its own regulations, has taken inconsistent positions on a crucial definition in the regulations and given the oil companies "conflicting guidance or no guidance at all" on how to conform to the regulations.
In a report issued last week, however, the department's Inspector General J. Kenneth Mansfield found that some, but not all, of the copies of that issues paper were inadvertently destroyed at the department's Dallas office. The inspector general determined that there had been no improper destruction of any documents related to the oil company case.
Last May, the department charged that from 1973 to 1979 the seven major oil companies, including Gulf and Atlantic Richfield, improperly reclassified low-priced oil so that it sold for more than twice as much as permitted by government regulations.
In filing those administrative complaints against the oil companies, the department said it would seek refunds for the alleged overcharges. The department alleged that Gulf had overcharged by $577 million, and Atlantic Richfield by $42 million.
The office of the department's special counsel for compliance, Paul L. Bloom, brought the charges against the oil companies. Bloom said earlier that the allegations of document destruction amounted to "legal mudslinging" in a deliberate effort by the oil companies to divert attention from the issues in the case.
Bloom yesterday refused to comment on the merits of the oil companies' claim in the federal court, which names him as one of the defendants. He said, however, that allegations of improper document destruction have been fully investigated by independent sources, including the Justice Department, and have been found to be totally unsupported.
Gulf and Atlantic Richfield also asked the court yesterday to order Melvin Goldstein, the director of the department's Office of Hearings and Appeals, to remove himself from presiding over any of the oil companies' demands for access to information in connection with the documents. The oil companies want an independent administrative law judge to preside over those questions instead of Goldstein.
The two oil companies contend that Goldstein failed to inform them about conversations and written memos exchanged with DOE officials about the document issues.