The Carter Administraion is considering going into federal court to help the Organization of Petroleum Exporting Countries (OPEC) fend off price-fixing charges that have been brought against the cartel.
Top administration officials from the State, Treasury and Justice departments met yesterday at the White House to consider filing a "friend of the court" brief in the case. Goverment lawyers might claim that federal judge in Los Angeles, where the suit was filed, does not have jurisdiction to hear it, officials said.
The unique suit recieved little national attention when it was filed last December by the International Association of Machinist. The union accuses OPEC and its member nations of violating federal antitrust laws and seeks money damages and an injunction to stop the cartel from passing further prices increases on to American consumers.
Treasury Secretary W. Michael Blumenthal is concerned that OPEC might withdraw billions of dollars it holds in U.S. securities and cash in U.S. banks to ensure the assets are not seized if the union wins the case, officials said. State Department officials fear OPEC might retaliate by cutting off oil supplies, they added.
Another meeting of the group is set for today, one of the officials involved said. But he said it is unlikely that President Carter would approve any goverment intervention that could be construed as taking OPEC's side against the American consumer.
"Can you imagine the guy sitting in line waiting for gas with the radio on and hearing that the Justice Department is going into court to defend OPEC?" he said.
Another high administration official said of Robert J. Lipshutz, presidential counsel: "Of course he's worried about going in to defend OPEC when gas lines are wrapped around the block.
Lipshutz referred a reporter's inquiry about yesterday's meeting to Justice. "I don't want to refer to the meeting, confirm or deny it took place," he said. It is pending litigation , and we simply can't comment."
he administration's sensitivity about how to respond to the suit is heightened by reports that OPEC will boost world oil prices to *20 a barrel at its meeting in Geneva next week. OPEC has already raised its prices 35 percent this year.
Secretary of Energy James Schlesinger has predicted that Americans will pay $60 billion for imported oil next year.
Richard I. Fine, attorney who filedthe price-fixing suit for the machinists' union, said in a phone interview from Los Angeles yesterday that "it's ludicrous" that the government is even considering intervening in the case.
cIt would be totally outlandish for the U.S. government to file anything against the interests of its citizens," he said. "The government should have brought the suit against OPEC in the first place."
Fine, a former antitrust lawyer for Justice, noted that the department once had considered such a suit.
Ironically, it is lawyers from the Justice Department's antitrust division - whose job is to attack price-fixing - who are researching ways to defend OPEC.
The machinists' suit outlines the history of OPEC actions to raise world oil prices and alleges the cartel violated the terms of the Sherman Antitrust Act.
Machinists' Attorney File also refered in the suit tothe Foreign Sovereign Immunities Act, which states the sovereign nations operating commercially within theUnited States are subject to U.S. laws.
Fine said he expected any challenge to the suit to try first to attack the jurisdiction of the court by saying the Foreign Sovereign Immunities Act doesn't apply to antitrust laws.
"but can you imagine the editorial cartoons if they (Justice officials) came in on such technical grounds?" he said.
The State Department was aware of the suit from the beginning, Fine said, because it had to serve the 13 members of OPEC with the court papers.
none of the nations has appeared in court to answer the charges, he said.
He said he plans to seek defaultjudegments against Algeria, the Gabon Republic and Qatar because their time to answer the suit already has expired.
One official speculated that lawyers for the OPEC nations might not answer the suit because they fear that they are within the jurisdiction of the court.
"At first no one believed this suit," Fine said. "They thought it was a publicity stunt. But now there's a lot of paper on file. It's not a joke."
The seriousness with which the administration takes the issue was evident from the high level of the officials who reportedly attended the White House meeting yesterday
Deputy Secretary of State Warren Christopher, Associate Attorney General Michael J. Egan and the chief lawyers from Treasury and the White House were present, one official said.
A Justice spokesman confirmed last night that the government has been "watching" the suit for any developments that affect its interests.
"No such developments have occurred," he said.
"Any participation by the United States in the suit will be to protect its own interests and not those of the parties," the spokesman added.*