Oklahoma now has tool to deal with price gougers

Saturday, September 15th 2001, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ Unlike the 1970s, Oklahoma now has a tool to deal with price gougers in the event of real or perceived shortages in gasoline supplies or other goods or services.

Panic after the terrorist attack in New York and Washington last week prompted Gov. Frank Keating to remind gasoline retailers of a law enacted after the devastating tornadoes on May 3, 1999.

That law limits price increases to 10 percent of the price prior a declaration of a state of an emergency by the governor or president.

``Preying on the misfortunes of people brought on by disasters is not the Oklahoma way of doing business and happily it is now against the law,'' said Sen. Ted Fisher, D-Sapulpa, author of the bill.

Violation is a misdemeanor punishable by a fine of up to $500 and a year in jail. Second offense is a felony punishable by up to 10 years in prison and a $5,000 fine.

``The statute has a twofold advantage,'' says Attorney General Drew Edmondson. ``If someone price-gouges, you can file criminal charges against them. The other, more important advantage is just having the law in place keeps that kind of behavior from taking place.''

Tuesday's panic at the pump brought back memories of the 1970s, when the Arab oil embargo and subsequent fuel supply shortages produced long lines at gas stations, federal price controls and fines for stations charging too much for gasoline.

Industry representatives hate price controls and hope it will never be necessary for an Oklahoma governor to use the 1999 law.

``I think we would not like that,'' said Vance McSpadden, executive director of the Oklahoma Oil Marketers Association. ``We would like to think that the market will care of itself. But in the case of World War III, who knows what would happen?''

McSpadden said only a tiny percentage of his members, fearing a supply problem, panicked like the public and raised prices more than usual after the terrorist attacks.

``Nighty-eight percent of retailers remained pretty much with the same price,'' he said.

Unfortunately, he said, the publicity went to the few stations who raised prices to ``five dollars a gallon or whatever.''

``I understand, too, that a large percentage of people doing that were foreign owners,'' said John Todd of Norman, a major distributor of gasoline in the state.

Todd said gasoline retailers, like other businessmen, can sell their products for what he or she wants to in a free enterprise system. ``If he wants to give it away, he can, but if he wants to charge $10 a gallon, he can.''

Under normal circumstances, he said, ``people would laugh'' at the spotty, high price increases of last Tuesday and go down the street to buy their gas.

He is dubious of price controls. ``Every time government gets in the business of controlling price, it ends up screwing the system up.''

McSpadden said no shortage of gasoline exists for now and pricing problems stabilized the day after the terrorist activity.

Keating credited jawboning of officials with bringing down gasoline prices, but said he would revisit the issue if exorbitant prices return.

Prosecuting price-control laws have been problematic.

G. Dan Rambo, regional director for the Department of Energy under President Carter, recalls a ``Daisy Chain'' scheme to get around price restraints on crude oil by passing ownership at the wholesale level off to several family members and increasing the price with each change.

``We took the worst of these cases to a federal judge in Houston, but she threw it out, saying that was just free enterprise,'' said Rambo, now a Norman attorney.

Edmondson thinks the 1999 state law has ``jury appeal.''

In a workers' compensation fraud case, Edmondson said, the jury ``might not get too excited'' about a person who lied about the extent of his injuries.

``But if someone takes advantage of a natural disaster or an act of terrorism to make a profit, that is something a jury would pay attention to.''

Fisher said the Oklahoma law is not designed to be a price control measure or an interference in normal conditions that dictate prices.

``It does not run counter to the free enterprise system at all,'' he said. ``It just addresses an unfair advantage at the moment.''