Hastert accuses Clinton administration of misleading Congress on gas prices

July 14, 2000
Web posted at: 6:17 p.m. EDT (2217 GMT)

WASHINGTON (CNN) -- House Speaker Dennis Hastert accused the Clinton administration Friday of misleading members of Congress about the causes of skyrocketing gas prices in the Midwest.

Hastert, R-Illinois, pointed to a June 5 Energy Department memorandum as proof that while the administration was suggesting oil companies might have colluded to drive prices in the Chicago and Milwaukee areas 40 percent higher than the rest of the nation, it was aware that other factors were significant contributors.

Administration officials called Hastert's claims "gas pump price politics." They say that the very memorandum the speaker points to discredits his claim.

"The bottom line," one administration official said, is that the document points to factors which would have only led to slight increases in prices -- not a 40 percent price spike.

Hastert set the stage for a heated political joust in a tersely worded memo to Environmental Protection Agency Administrator Carol Browner, whom he accused of misleading 30 members of Congress during a June 15 meeting.

House Speaker Dennis Hastert, R-Illinois

"It is clear from the June 5 memo that the DOE ... believed that a lack of gasoline inventories in the Midwest, as well as Environmental Protection Agency regulations, were not only 'factors' which led to higher gasoline prices, but in fact the primary causes," Hastert wrote.

The memo, written by DOE's acting policy director Melanie Kenderdine to Energy Secretary Bill Richardson, said that in part "high consumer demand and low inventories have caused higher prices for all gasoline types, relative to crude oil prices."

In addition, Kenderdine found, "The Milwaukee and Chicago area supply situation is further affected by, among other things," new EPA guidelines specific to that area; lower gasoline inventories relative to the rest of the country; higher regional demand; and limited transportation links.

But administration officials say Hastert's letter fails to note a key statement in Kenderdine's memo: "These supply issues will affect price, but the degree to which they contribute to price spikes is unknown."

The memo goes on to state that a number of the previously mentioned factors also play a role in gas price increases in other parts of the nation that did not have the special clean air guidelines.

The Midwest price spike remains unexplained. The cause is under investigation by the Federal Trade Commission, and administration officials point out that on the day the FTC investigation was announced, the prices began to drop.