Columnist Jeff German: AG ducks chance to drill big oil

Friday, April 4, 2003 | 5:50 a.m.

ATTORNEY GENERAL Brian Sandoval is putting on a good show for public consumption in his bid to find out whether the big oil companies have manipulated gasoline prices in Nevada.

He has done the feel-good things you would expect the state's top law enforcement officer to do when facing complaints from angry consumers demanding to know why Nevada's prices are third highest in the country.

Sandoval has sought written explanations from the oil companies, stepped up price monitoring and shared information with other attorneys general.

But it turns out that the first-term Republican has passed up a timely opportunity to show big oil that he really means business.

And that not only has undercut his efforts to keep the oil industry honest, but it also has put him in direct conflict with one of his most knowledgeable deputies in the fight against oil company chicanery.

Tim Hay, the attorney general's consumer advocate, said late last week that he was surprised to learn that Sandoval recently withdrew a legislative proposal seeking to give the state specific authority to go after suspected price gouging on the part of the oil companies.

"My assumption is that because this was the attorney general's first legislative session, he had other priorities," Hay said. "But I believe this proposed legislation is clearly in the public's interest."

The proposal, called a bill draft request, was filed with the Legislative Counsel Bureau in August by Sandoval's Democratic predecessor, Frankie Sue Del Papa, in anticipation of this year's legislative session. Hay, a Del Papa holdover whose appointment expires in 2005, helped put together the request.

"Nevada does not currently have a statute to cover what is commonly referred to as price gouging," the proposal said. "The need for such a bill in Nevada became apparent after Sept. 11, 2001, when complaints of gasoline price gouging were received but could not be immediately or effectively addressed under existing law."

Last week Sandoval, contrary to the opinion of Hay, his oil company expert, said he withdrew the bill draft request after concluding that Nevada's deceptive trade practices law already gives the attorney general the ability to investigate price gouging.

Sandoval's press secretary, Tom Sargent, who is not a lawyer, later cited two clauses in the statute he said can be applied to price gouging.

The state, he said, can go after any business that "fails to disclose a material fact" in the sale or lease of goods and services or "violates a state or federal statute" relating to such activity.

But Hay said he was troubled by the layman's analysis and sent a strongly worded e-mail to Sandoval chastising Sargent and reaffirming the consumer advocate's position that Nevada law does not adequately address price gouging.

Meanwhile, Tim Hamilton, a veteran petroleum consultant, said Sandoval's public posturing against big oil has played into the hands of the greedy business giants.

Because anti-trust laws in Nevada and other states don't define gouging, the oil companies are allowed to artificially raise their prices as long as they do it independently and not as part of any organized plot, he said.

As a result, he added, inquiries like Sandoval's generally are doomed from the beginning and serve only as public relations for the companies.

"They love these investigations because they can go to the news media and say, 'See, we're not gouging,' " said Hamilton, who has done consulting for gasoline dealers in Nevada and across the country.

Hamilton said the bill draft request Sandoval tossed aside isn't perfect, but it is one of the few legislative proposals he's heard about in recent years that actually tries to go after the root of high gasoline prices.

The big question now is will Sandoval revive the proposal while he's telling Nevadans that he's serious about going after big oil?

And can he patch things up with Hay, who should be a valuable resource in the high-stakes fight?