Mr. DINGELL. I get the general impression that the Federal Reserve takes orders from God, that they never pay much heed to the Congress and pay not much attention to the law. I am wondering how we give DOE the ability to get these certificates out if we have a major crunch. Mr. BARDIN. If we can't resolve it at the staff level and with the help of our good friends in the Office of Management and Budget, then the Secretary of Energy and the Secretary of the Treasury will have to discuss it. If that does not work, the President of the United States, the White House, will have to resolve it. Mr. DINGELL. We will be having OMB tomorrow and discuss that with them. Let me ask you gentlemen to help me with this question. I have heard from time to time that the Mafia was ready to go into business and certain other clandestine societies were prepared to go into active production and distribution of these rationing certificates. What is the statutory penalty for engaging in the uttering and publishing of falsified rationing certificates? Is the law clear on this or is there ambiguity on this point? Is it the same penalty as counterfeiting? Mr. BARDIN. Why don't we ask Mr. Goodwin, the Assistant General Counsel to tell us. Mr. GOODWIN. With respect to the violation of the rationing regulation, not the counterfeiting aspect of it but the violation of regulations themselves, the enforcement provisions of the EPAA are what is utilized. Mr. DINGELL. Is that $5,000 and a year in the tank? Mr. GOODWIN. They are not excessive. Mr. ROBINSON. For willful violation at that level it is $10,000 maximum fine for violation and 1 year in jail. Mr. GOODWIN. That is just the first level. Then the question is, is there a general provision in title 18 of the United States Code which makes it unlawful to reproduce Government documents and utter them? I don't have an exact citation to it. I think there is such a provision. Mr. DINGELL. Will you inform us on that? Mr. GOODWIN. We can provide that for the record. PENALTIES FOR COUNTERFEITING AND ABUSE OF RATION COUPONS, RATION CHECKS The Standby Gasoline Rationing Regulations provide in Section 570.3 that is shall be a violation of section 5 of the Emergency Petroleum Allocation Act of 1973 (EPAA) and Sections 524 and 525 of the Energy Policy and Conservation Act (EPCA) to: (1) With intent to defraud, falsely make, forge, counterfeit, or alter any ration check, ration coupon or redemption check. (2) With intent to defraud, pass, utter, publish, or sell, or attempt to pass, utter, publish, or sell, or bring into the United State of keep in possession or conceal any falsely made, forged, counterfeited, or altered ration check, ration coupon or redemption check. (3) Buy, sell, exchange, transfer, receive, or deliver any false, forged, counterfeit, or altered ration check, ration coupon, or redemption check, with the intent that the same be passed, published, or used as true or genuine. Each separate act or violation of the regulations is subject to a penalty of up to $5,000 (EPCA section 525(a), EPAA section_5(a)(3)(A)(II)). Each willful violation is subject to a penalty of up to one year imprisonment of a fine of up to $10,000 (EPCA section 525(b), EPAA section 5(a)(3)(B)(iii)). A person willfully passing ten altered rationing coupons could be charged with ten separate counts and thus be subjected to cumulative penalties of $100,000 and ten years in jail. Also, once a civil penalty is levied under EPCA section 525, a person could be subject to additional fines and imprisonment for subsequent violations (EPCA section 525(c)). Title 18 of the U.S Code possibly provides additional criminal penalties for counterfeiting or abuse of rationing coupons, checks and redemption checks. If the rationing coupons, checks and redemption checks have the Department of Energy seal affixed to them, section 506 of Title 18 makes it a crime, subject to a penalty of up to $5,000 and five years imprisonment, to falsely make, forge, counterfeit or alter a seal; knowingly use, affix or impress such seal on any paper with fraudulent intention; or knowingly possess and such seal. Even if the coupons and checks do not contain the Department seal, section 1001 of Title 18 makes it a crime, subject to a fine of up to $10,000 and five years imprisonment, for any person in any matter within the jurisdiction of any department of the United States, to knowingly and willfully use any false writing or document. There is a question, however, whether this provision would be applicable to rationing instruments. Again, if the section were construed to apply, each separate action would presumably be a violation subject to fine or imprisonment. It also is possible that various other Federal criminal statutes, such as mail fraud (18 U.S.C. section 1341), would be applicable in particular circumstances. Additional criminal enforcement provisions could be made applicable to ration checks, coupons and redemption checks by expressly designating them as obligations of the United States for purposes of 18 U.S.C. section 8, and thus making these instruments subject to the Counterfeiting and Forging provisions in Chapter 25 of Title 18. Such a provision was added for food stamps in the Food Stamp Act (7 U.S.C. section 2023), and a similar provision in the EPCA, for example, for ration checks, coupons and redemption checks would be adequate. DOE presently is working with the Justice Department and the Treasury Department on the development of an enforcement scheme for the rationing program, examing existing criminal statutes as well as developing a new legislative provision. We will contact the committee staff in the near future with respect to submission of a proposal for legislation. Mr. DINGELL. Let me ask this question. Am I properly arriving at a judgment that you cannot properly punish them for counterfeiting on this? Mr. BARDIN. You are asking whether the defined statutory crime of counterfeiting would apply to these coupons? Mr. DINGELL. Yes. Mr. ROBINSON. The answer to that is that it would be a violation of the rationing regulations to utter-the General Counsel's Office has given you an answer on whether there is something else in title 18, but we are clearly taking a step to make yet a violation of the EPAA provisions as well. Mr. DINGELL. I get that impression that that is a relatively piddling offense. Mr. Berry, what is your answer to this? Mr. BERRY. I don't have an answer, but I would like to make some comments about it. The first determination that has to be made as to whether counterfeiting becomes a Federal offense is to determine whether a gas rationing coupon fits the description of an obligation or security of the United States. Mr. DINGELL. I have doubt that it does. Mr. BERRY. So do I. Mr. DINGELL. I also observe that probably the history of the gas rationing coupons of World War II was that they did not fit the definition of an obligation of the United States. The rationing coupons which DOE presently has in storage do not have a Department seal. If it is decided to serialize these coupons, we expect that a seal could be imprinted. Mr. BERRY. The best way to approach this in my opinion, Mr. Chairman- Mr. DINGELL [continuing]. Is to clarify the issue all at once, am I right? Mr. ROBINSON. I definitely think the EPAA penalty provisions by themselves are probably not sufficient and if there is not something already in the United States Code that probably would be the appropriate solution. Mr. DINGELL. I am not sure that the FBI would be diligently involved in the enforcement of your regulations. It occurs to me that maybe we ought to make it a separate statutory offense. I think in order to clarify this thing, gentlemen, if you have some additional comments on the record on this point they will be appreciated. In the meantime, Mr. Bardin and Mr. Berry, in concert with your counsels give us your suggestion as to how we ought to draft something of this kind. It strikes me if we are going to have folks running around circulating these things they ought to know that the jailhouse waits. Mr. BARDIN. We will ask the General Counsel to review all those questions and respond to them for you. Mr. DINGELL. Mr. Berry, you have another comment? Mr. BERRY. Just one. You mentioned the FBI. I would like to use the Food Stamp Act as an analogy. In the Food Stamp Act the responsibility for counterfeit investigation and theft is vested in the Secret Service. Mr. DINGELL. Is that better than the FBI? Mr. BERRY. That is their specialty, Mr. Chairman, counterfeiting activities. Mr. DINGELL. Is that done by statute? Mr. BERRY. The Food Stamp Act is by statute. Mr. DINGELL. Does it tell the Secret Service to do it or is it the agency that issues the food stamps? Mr. BERRY. No, the Food Stamp Act provides for Secret Service input. Mr. DINGELL. Specifically in the act? Mr. BERRY. Yes. Mr. FINNEGAN. Mr. Chairman, I think it would be useful if we have an opportunity to discuss with these gentlemen some of the other questions that we have concerning this whole business about the dollars and the presses and the serialization. We have a number of others. I don't think it is necessary to raise them at this point. Mr. BARDIN. We are available. Mr. DINGELL. You have always been cooperative, Mr. Bergold, Mr. Bardin, and Mr. Berry. If our staff have additional questions, I am sure you will respond either in person or through communication. Mr. BARDIN. Absolutely. Mr. DINGELL. Gentlemen, you have been here very, very long. You have been remarkably patient. The Chair expresses the thanks of the committee. If there is no further business to come before the committee, the subcommittee stands adjourned until 9:30 a.m. tomorrow morning. Thank you. [Whereupon, at 4:30 p.m. the subcommittee adjourned to reconvene at 9:00 a.m., Thursday, February 15, 1979.] DEPARTMENT OF ENERGY AUTHORIZATIONS (FISCAL YEARS 1979 AND 1980) AND ENERGY EMERGENCY PREPAREDNESS THURSDAY, FEBRUARY 15, 1979 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND POWER, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The subcommittee met at 9 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. John D. Dingell, chairman, presiding. Mr. DINGELL. The subcommittee will come to order. Our hearings on the Department of Energy's authorization legislation continue today with a look at the Department's extensive use of outside contractors to perform its statutory functions. As examples, 60 percent of the Economic Regulatory Administration's request for fiscal year 1980 is to be spent on contracts and 50 percent of the Energy Information Administration's budget is earmarked for contracts. In dollar amounts, $137 million of the $248 million budget for the two offices will be spent on contracts. The subcommittee, with the assistance of the General Accounting Office, has been investigating the use of contracts by these offices, and the findings are disturbing. First, we have found an extensive use of sole-source contracts, something which affords full opportunity for the Department under, I assume, pressure from the Office of Management and Budget to escape budgetary ceilings, personnel ceilings, and commitments that would otherwise be made to Federal employees, not excluding the requirements that these contracts should necessarily reflect Government policies on equality of policy as to race and sex. In the area of emergency preparedness, for example, 24 out of 54 contracts were sole-source. The justifications for many of these sole-source procurements appear to be inadequate. Second, many of the contractors appear to be performing basic management functions. The Chair has a question whether the management function should be lightly contracted out to outside authorities. For example, one contractor studied DOE's legal authority in the area of pipeline regulation, and another contractor studied the legal status of conservation contingency plans. These studies are clearly the responsibility of the Department's lawyers. The Economic Regulatory Administration even had to hire a contractor to put its files in order in a docketing system. 49-611 079 17 |