Blumenthal makes waves Wednesday

By John O'Brien | May 18, 2007


HARTFORD, Conn. - Even by his standards, Wednesday was a busy day for Connecticut Attorney General Richard Blumenthal.

Known widely as an activist attorney general and figured to be preparing himself for a run at Governor, Blumenthal spent the day testifying before Congress, denouncing the actions of MySpace.com and initiated legal action to force the cleanup of hazardous waste at a dump.

His Congressional testimony called for measures to curb increasing gas prices. He told the House Antitrust Task Force of the Judiciary Committee that the federal government has failed to halt oil industry mergers that have undercut competition and led to high costs.

"The federal government's lax and lackluster enforcement of antitrust laws has led to an explosion of merges in the oil industry -- more than 2,500 in the past 15 years or more than 150 mergers and acquisitions every year -- most of them profoundly anti-consumer," Blumenthal said. "More and more market power is concentrated in fewer and fewer hands."

He added Congressional action is needed to halt the mergers and break up oil companies that misuse market power "to engage in predatory practices against competitors and consumers" and allow antitrust lawsuits against the Organization of Petroleum Exporting Countries.

"Big Oil has created a market on the brink, manipulating inventories and refinery capacity to the point that the slightest supply disruption sends prices and company profits skyrocketing," Blumenthal said. "There is sufficient supply, but these newly created industry giants use their huge market power to keep a stranglehold on the spigot."

Recently, Kentucky Attorney General Greg Stumbo filed the first state lawsuit against a major oil refinery, alleging that Marathon Oil raised its prices unlawfully during the declared state of emergency following hurricanes Katrina and Rita in 2005.

"While consumers struggle to pay record heating oil and gasoline prices, the industry is drowning in cash. Witness the staggering level of oil industry profits in the wake of a horrible natural disaster -- Hurricane Katrina: Three companies reported quarterly profits exceeding $16 billion," Blumenthal said.

"More recently, Exxon Mobil took advantage of refinery shutdowns to raise its refiner margins by 50 percent, recording $9.28 billion in profits for the quarter."

Solutions proposed by Blumenthal included: A one-year ban on oil industry mergers; prohibition of oil company mergers in highly concentrated markets unless the Federal Trade Commission finds consumers will benefit; zone pricing being outlawed; encouraging or mandating expansion of refinery capacity and an increase in minimum oil product inventory levels; and the enactment of a windfall profits tax to fund conservation and alternative fuels.

"I strongly believe in free markets," Blumenthal said. "Congress needs to restore the free market in oil products by breaking excessive market concentration that stifles competition and constricts supply."

Blumenthal was again full of conviction speaking about the decision of MySpace, a popular social networking site, to not provide to eight state attorneys general information on its members that are convicted sex offenders. Blumenthal was one of the eight who requested it in a letter.

He called MySpace's decision "disingenuous." The site claims federal law prevents them from releasing the information without a subpoena or search warrant, though it did delete the profiles and promise to cooperate when what it feels are proper channels are taken.

"MySpace obviously deleted the sex offender profiles because it believed they presented a danger to the public," Blumenthal said. "Legally, MySpace can and must provide this information without a subpoena.

"The vague reference by MySpace to federal privacy laws certainly failed to justify a complete refusal to cooperate -- or insistence on a subpoena for all information. If MySpace wants a subpoena, we will seek one."

And in the unlikely event Shultz Salvage Inc. wanted a lawsuit, it now has one. Blumenthal says the company has illegally operated as a waste facility for decades without a permit, releasing pollutants into the soil and groundwater in Plainville.

State inspectors recently discovered 14 tanks at the company's site that contain ignitable hazardous waste. Department of Environmental Protection Commissioner Gina McCarthy joined in the announcement.

"Persistent and pernicious pollution alleged at the site, including dangerous hazardous waste, has likely caused grave damage," Blumenthal said. "We will pursue court orders and penalties to punish anyone responsible for harm to precious natural resources."

The suit seeks civil penalties as high as $25,000 per day per violation and a court order prohibiting Shultz Salvage from continuing to operate. It would also require cleanup and disposal of the waste at the site.

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