FTCR Demands Release of Information About Regulator With Oil Company Ties

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Santa Monica, CA — FTCR said a state auditor’s investigation reported today in the Sacramento Bee hints at a culture of coziness and possible broader corruption in the state’s dealings with the oil industry and demanded more information on behalf of the public. The investigation on fast-tracking of oil company drilling and other permits in the Department of Conservation failed to name either the employees involved or the oil companies to whom such favors were granted. See the story here.

The Foundation for Taxpayer and Consumer Rights said it was filing a Public Records Act request with the state auditor and the Conservation Department to release the withheld details of the investigation. In addition, FTCR called for a broader investigation by the auditor of the state’s dealings with the oil industry.

“Consumers were rightly suspicious last year when a state ‘investigation’ of oil company and refiner gasoline pricing unbelievably found no evidence of gouging, even as prices rose to a record $3.38 per gallon,” said Judy Dugan, research director of FTCR. “If overt collusion is suspected in issuing drilling permits, a pall is cast over other state dealings with oil companies, including the California Energy Commission’s clueless inability to see specific causes of price spikes, or to critically evaluate refiners’ wholesale shutdowns for ‘maintenance.'”

The state auditor’s investigation found that the Conservation Department employee concealed his stock holdings in two regulated oil companies and solicited their donations to a charity for which his wife worked. At the same time, the employee was fast-tracking oil drilling permits, even warning one company to hurry its request because of environmental problems involving the company.

The audit said of that case: “The employee should have been been protecting the state’s interests by reviewing the proposed projects for engineering soundness and conformity with state laws. Instead, it appears that he and his manager may have been more concerned with Company A’s financial interests.”

The employee’s supervisor also held stocks in regulated companies and took gifts from them, the audit said. Neither employee had, as required, disclosed the stock ownership. This case is too important to Californians to hide under a cloak of anonymity, said FTCR. The auditor’s referral of the case to the attorney general and the Fair Political Practices Commission is proof enough that this is not a disciplinary or personnel matter.

“A culture that would allow such blatant self-interested dealings on drilling permits, including assistance in fending off environmental violations, may not be confined to one or two people,” sai Dugan. “The public needs to know who was involved and their job histories. Did either of the employees previously work for an oil company, or is either of them about to retire and hoping for a cushy new job in the industry?”

FTCR noted that it took the action of a whistleblower in local government, also unnamed, to prod the state to act, according to the Bee. This points to a culture of silence inside the office of chief regulatory agency, the group added.

“Consumers are being hammered by indefensibly high gasoline prices while a regulator grants oil companies favors that increase their profits,” said Dugan. “The state auditor, in a case of this gravity, should not cloak its report in anonymity or call the matter closed.”

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The Foundation for Taxpayer and Consumer Rights (FTCR) is a non-profit and non-partisan consumer advocacy group. For more information visit us on the web at

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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