The AFL-CIO said today the government should consider taking over the oil industry unless the industry can demonstrate it is acting in the "public interest."
It suggested a number of conditions, including industry acceptance of continued price controls, a steep windfall-profits tax, a ban on mergers, and government control over the flow of imported oil.
The oil companies "have abused their current monopoly powers, and the nation cannot afford to be at the mercy of the sheiks of OPEC or the barons of American oil companies," the federation said.
The proposal, endorsed unanimously by the AFL-CIO Executive Council at its midsummer meeting here, marked a major departure from the labor federation's historic aversion to nationalization of a private industry.
AFL-CIO officials said nationalization of a major industry was suggested only once before, when the nation's rail system seemed on the verge of collapse in the 1960s. Never before has the federation proposed government takeover of a healthy industry, they said.
In a seven-page statement on energy policy, the 35-member council, composed of the presidents of major AFL-CIO unions, endorsed the "thrust" of President Carter's energy program but recommended it be changed and strengthened in several key ways.
Reiterating opposition to Carter's phased decontrol of oil prices, which began June 1, the council said all windfall profits accruing from price increases by the Organization of Petroleum Exporting Countries should be taxed at 85 percent. When Carter proposed decontrolling oil prices, he called for a windfall profits tax of 50 percent. The House has approved a 60 percent tax on most categories of oil.
The Executive Council also urged that Carter's proposed multibillion-dollar invstment in development of synthetic fuels be expanded to include government-run projects patterned after the Tennessee Valley Authority and production of oil and gas from public lands.
It called for creation of a government agency to regulate the flow and price of imported oil, a ban on foreign sales of Alaskan oil, no federal money to help oil companies develop renewable sources of energy, and legislation now pending in Congress to forbid mergers between oil companies and companies engaged in other activities.
The council did not specify what should trigger a government takeover of the industry, saying only that: "If the oil monopoly fails to adequately serve the public interest, consideration should be given to nationalization of the industry."
But AFL-CIO secretary-treasurer Lane Kirkland, speaking for the council in the absence of its ailing 84-year-old president, George Meany, said the oil industry will make the case for nationalization "all the stronger" if it succeeds in blocking these proposals.
"We do not like nationalization for its own sake," said Kirland, but prefer the long-standing collective bargaining relationship between unions and private industry. However, he said, the oil industry is a special case because it deals with an array of foreign government monopolies and "governments should confront governments."
As to whether the oil industry meets the AFL-CIO's "Public interest" test for escaping nationalization, Kirkland said it is an "open question" as of now.
The government takeover proposal was added here to an AFL-CIO staff-drafted energy statement by the council's energy subcommittee headed by Paul Hall, a trusteed Meany lieutenant and president of the Seafarers International Union. It was supported by Hall, Plumbers Union President Martin J. Ward and Kirkland, sources said.
Meany was contacted by telephone at his Washington suburban home between the meetings of the subcommittee and the Executive Council and agreed with the naturalization proposal, according to AFL-CIO spokesman Albert J. Zack.
The strengthening of the energy statement appeared to signify more assertiveness on the part of council leaders who chafe under suggestions that they have been little more than rubber stamps for prepackaged policy statements from the AFL-CIO bureaucracy. $&(WORD ILLEGIBLE $&)See LABOR, A6, Col 1> untary cooperation" from oil companies.
Carter's press secretary, Jody Powell, officially released the DOE report yesterday afternoon, but had no comment on its contents. He referred all questions to the Energy and Justice departments.
DOE officials who prepared the report said in interviews that their findings were incomplete and would be constantly updated as new information came in. They said they decided to release the report at this early date - without statistics from June and July - because of the president's urgent request for the report.
DOE general counsel Coleman said that about 12 top energy officials were "fairly critically involved" in the investigation, with many other staff members "working on particulars."
"This had high-level attention in the department," Coleman said.
In describing how the 45-day investigation was actually conducted, he said that DOE officials had "lengthy meetings, discussing the thing orally."
He said that the information gathered for the probe was similar to "the kind the department wrestles with every day of the week."
Coleman said the conclusions of the report were not unexpected by DOE officials. "Certainly we had a general idea of the parameters because we follow this stuff regularly. We weren't surprised by what we found."
The 53-page report basically exonerates the oil industry of charges that it deliberately hoarded gasoline supplies to create a shortage, and thus raise gasoline prices. Instead, the report places considerable blame for the fuel shortages on the Carter administration's allocation program.
The report was compiled and written by Carlyle Hystad of the DOE Office of Policy and Evaluation.
Hystad said in an interview yesterday that the report was based mostly on industry statistics. He said that one DOE investigation arm, the special counsel's office, "did not provide any conclusions regarding specific companies."
The special counsel's office is the one that has been assigned the audits of gasoline pricing and allocations. Hystad said these audits were not yet completed, so the findings could not be included in the report to the president.
Hystad also said that an audit being conducted by the Alexander Grant & Co. accounting frim on the accuracy of the oil industry data was also not included in the report because it was not yet completed either.
Hystad and Coleman differed on their accounts of whether the special counsel's office and the outside accounting firm contributed to the report.
Coleman said that DOE did, in fact, consult with and rely on the special counsel (Paul Bloom) and the accounting firm.
"We had the full benefit of everything they [Alexander Grant] had learned in their audit, review and input into this report," Coleman said.
However, Hystad, who wrote the report, flatly contradicted Coleman.
"We have no results from Alexander Grant," he said. "They were not consulted because they had no results. They were just starting when we were finishing up."
Although the DOE report was officially released yesterday, it had been widely reproted earlier as the result of separate leaks to The New York Times, the Los Angeles Times and The Washington Post.
One senior federal energy official contended that the Carter administration wanted to use the report to placate the oil industry and thereby smooth the passage of a Carter-supported bill to tax "windfall" oil profits.
Regarding the Antitrust Division inquiry at the Justice Department, Kaplan refused to say how many investigators were working on it or to describe what they were doing. However, he said, "We've been interviewing everybody in sight, including members of the press."
He said he has decided so far not to use subpoena power because "we don't have evidence of an antitrust violation" that would merit a grand jury investigation and the authority to issue subpoenas that comes with it.
The Justice Department's 14-page interim report, which was also released at the White House, was styled as a report to the president "on whether there is reason to believe that violations of federal antitrust laws have caused or contributed to the apparent gasoline shortage."
On the second page, the report makes it clear that the Justice Department's inquiry was not a formal antitrust investigation because formal investigations can only be initiated "when there is reasonable cause for believing that civil or criminal violations...have occurred."
For that reason, the report said, Justice officials were prevented from using subpoena power to obtain information from the oil companies.
The report goes on to raise a series of questions that it says must be answered to make an adequate determination of whether the oil companies broke the law.
In justifying further inquiry, the report concluded, "To avoid attributing current market distortions to unlawful conduct when further analysis may reveal such distortions to be the result of conduct unassociated with antitrust violations, it is necessary that we examine all of the circumstances relating to the apparent shortage."