The stocks of the seven Administrative Law Judges listed in the GAO Report as "prohibited" were all in companies such as Scott Paper Company, Ford Motor Company, U.S. Steel Corporation, Northern Pacific Railroad Company, and Norfolk and Western Railroad Company, where there was nothing to suggest on the face of it that such companies might be regarded as regulated companies. During the years in question in not a single one of these cases was the Administrative Law Judge notified or informed by the Office of Personnel or the Office of General Counsel that any of these stocks were in "prohibited" companies. Under these circumstances, and in the climate I have just described, when the Administrative Law Judge encountered a situation where an intervenor in one of his cases was a company in which he held stock and which he had understood all along to be non-prohibited, he promptly followed the customary waiver procedure, as provided for in the Commission Rules (1) He first notified all parties in the case of his stock interest, and provided an opportunity for them to file any objections with the Secretary of the Commission. (2) At the same time he requested a waiver determination from the Chairman - and he proceeded with the case only if the Chairman made a waiver determination based on the insubstantial character of the stock holding. In no case has an Administrative Law Judge improperly presided in a case where he held stock in a "prohibited" company party. The only situations where an Administrative Law Judge has presided in a case where he held stock in any party to the proceeding are the waiver cases, where his participation was fully authorized and fully in accord with the Commission's Rules. It is therefore clear that the seven Administrative Law Judge situations listed in the GAO Report involve no possible suggestion of impropriety. Instead they involve claimed technical violations with respect to the mere holding of stock over a period of years in companies which only this year, long after the fact, have now been characterized for the very first time as "prohibited" companies. The Administrative Law Judge corps of the Federal Power Commission has long been widely regarded as one of the outstanding Administrative Law Judge corps in the Federal government. In my judgment it is a grave disservice to them, and to the public interest, to single them out for critical attention as has been done in the press stories and editorials appearing since the GAO Report was published. Need For Improving The Regulation Federal Power Commission B-180228 BY THE COMPTROLLER GENERAL OF THE UNITED STATES This is our report on the need for improving the regulation of the natural gas industry and management of internal operations, Federal Power Commission. Our review was undertaken in response to your request of October 10, 1973, and encompassed the specific issues raised in your letter as well as additional matters that came to our attention during our examination. Copies of this report are being sent to the House and Senate Committees on Appropriations; House and Senate Committees on Government Operations; Subcommittee on Communications and Power, House Committee on Interstate and Foreign Commerce; the Director, Office of Management and Budget; the Chairman, Civil Service Commission; the Chief Judge, United States Court of Appeals for the District of Columbia; the Chairman, Federal Trade Commission; and the Chairman, Federal Power Commission. We believe that this report would be of interest to other committees and Members of Congress. However, we do not plan to distribute this report further unless you agree or publicly announce its contents. Sincerely yours, Jenis B. Staats Comptroller General 2 3 4 i 3 13 IMPROPER EXTENSIONS OF EMERGENCY GAS Failure to issue necessary regulations authoriz- Extensions granted to prevent interruptions in Extensions granted to companies applying Extensions granted to cope with court stay Conclusions Agency comments and our evaluation Extensions granted to offset effect of court EMERGENCY GAS SALES: NEED FOR COMPLETE Failure to obtain actual price and volume data Monitoring of the 180-day emergency sales program Recommendations Agency comments and our evaluation ACCOUNT OF PROCEEDINGS INVOLVING THE Consumers Union of United States, Inc. 25 180-day emergency gas sale procedure--FPC Order 491 25 |