The Justice Department finally gave its blessing yesterday to a 10-month-old settlement between the Department of Energy and the Phillips Oil Co. on alleged overcharging.
Oficials said Justice's concurrence clears the way for final approval for several other overcharging settlements. Justice and DOE have been feuding over which agency has the final say in settling such cases, and Associate Attorney General John H. Shenefield said he felt the Phillips case would serve as a model for the others.
Yesterday's announcement has little practical effect, Shenefield acknowledged, because the cash refunds and other provisions of the $57.5 million cost to Phillips occured months ago. At issue were $262 million in claims, $93 million in a DOE overcharging suit against Phillips and the rest in Phillips' challenges to DOE regultions.
Paul Bloom, DOE's special counsel in charge of the overcharging cases, said he couldn't understand why Shenefield felt it necessary to call a press conference to announce an action Bloom had completed nearly a year ago. He also labeled as gratuitous some Shenefield criticisms of the consent decree.
Shenefield told reporters that Justice did not endorse provisions of the consent order that would relieve Phillips of some record-keeping obligations and require that DOE treat certain Phillips documens confidentially.
The entire episode of suit and countersuit involved in the DOE-Phillips legal battle are a good example of the "artificial beehive" of activity resulting from complicated government regulations.
Shenefield attributed the lengthy delay in Justice's stamp of approval to the necessity to try to "rationalize and understand the justification" for DOE making the settlement.
Bloom said Justice's concerns about the consent decree came at an "odd point" in the proceedings. "We're always grateful for the departement's advice on weighty matters," he said with barely disguised sarcasm. "We would have like to have it during the comment period nine months ago."
Bloom said he now hopes for speedy Justice approval of similar settlements with Cities Service and Amoco, cases which involves $130 million in cash refunds and $370 million in unused future price increases.
Ed Rothschild, of Energy Action, a consumer-oriented energy lobby, said that yesterday's action by the Justice Department "gives a patina of legitimacy to a settlement that won't stand up if challenged in court."