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Eshoo, senators urge FTC probe of outlet stores

Rep. Anna Eshoo and three other members of Congress want a federal investigation of whether outlet stores are engaging in misleading marketing practices.

In a letter sent Thursday to Federal Trade Commission Chairwoman Edith Ramirez, Eshoo, D-Palo Alto, and U.S. Senators Sheldon Whitehouse, D-R.I.; Richard Blumenthal, D-Conn.; and Ed Markey, D-Mass., urged a probe into whether companies sell lower-quality items produced specifically for outlet stores without properly informing consumers about the difference between those items and the higher-quality products found in regular retail stores.

“Historically, outlets offered excess inventory and slightly damaged goods that retailers were unable to sell at regular retail stores,” the lawmakers wrote. “Today, however, some analysts estimate that upwards of 85 percent of the merchandise sold in outlet stores was manufactured exclusively for these stores. Outlet-specific merchandise is often of lower quality than goods sold at non-outlet retail locations. While some retailers use different brand names and labels to distinguish merchandise produced exclusively for outlets, others do not. This leaves consumers at a loss to determine the quality of outlet-store merchandise carrying brand-name labels.”

The lawmakers cite news reports estimating the nation’s more than 300 outlet malls were expected to generate $25 billion in sales last year.

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Senators say state DTSC will cooperate with probe

The state Department of Toxic Substances Control’s director promised Monday that she’ll work with state Senate investigators to explore claims that the agency hasn’t properly enforced regulations, lawmakers said.

Senate Majority Leader Ellen Corbett, D-San Leandro, said she and state senators Kevin de Leon, D-Los Angeles, and Ricardo Lara, D-Long Beach, met today with DTSC Director Debbie Raphael regarding recent claims raised in a Consumer Watchdog report and subsequent media stories. The senators have asked the Senate Office of Oversight and Outcomes to launch a probe.

“We must get to the bottom of questions prompted by the Consumer Watchdog report,” Corbett said in a news release. “I appreciate that Ms. Raphael welcomes transparency and accountability. I look forward to the Senate investigation and making whatever changes may be necessary for DTSC to effectively do its job.”

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West Coast Senators urge probe of gas prices

The West Coast’s U.S. Senators today asked the Justice Department to do a refinery-by-refinery investigation into why gas prices spiked to more than $4 a gallon during May and October.

The letter to U.S. Attorney General Eric Holder from senators Dianne Feinstein, D-Calif.; Barbara Boxer, D-Calif.; Ron Wyden, D-Ore.; Jeff Merkley, D-Ore.; Maria Cantwell, D-Wash.; and Patty Murray, D-Wash., asks that the Oil and Gas Price Fraud Working Group probe any possible market manipulation or false reporting.

“A McCullough Research report released Nov. 15th in conjunction with a California State Senate hearing on California gas prices revealed information that showed that the price spikes in May and October occurred while crude oil prices were declining, inventories were increasing, and possibly in conjunction with misleading market-making information,” they wrote.

The report they cited found that some West Coast oil refineries may have been producing oil last May despite public reports that they were shuttered for maintenance. For example, McCullough’s analysis found that the Chevron refinery in Richmond emitted byproducts of petroleum production throughout May – yet public reports claim the refinery shut down production from May 12 to May 26.

The report found the October price spike added up to a 66 cent-per-gallon windfall profit for oil companies—or about $25 million a day. The difference between what drivers actually paid and what they should have paid exceeded $1 billion.

“West Coast families and businesses are reeling from elevated and extremely volatile prices at the pump, impacting family budgets, inflation levels, and overall economic activity,” the senators wrote. “We believe this situation demands the attention from the Working Group established in April 2011 specifically to ‘monitor oil and gas markets for potential violations of criminal or civil laws to safeguard against unlawful consumer harm.’ ”

The working group includes representatives from the Department of Justice, the National Association of Attorneys General, the Commodity Futures Trading Commission, the Federal Trade Commission, the Department of the Treasury, the Federal Reserve Board, the Securities and Exchange Commission, as well as the Departments of Agriculture and Energy.

Feinstein in August had urged the Federal Trade Commission to launch an investigation of the sudden rise in case prices.

Read the full text of the senators’ letter, after the jump:
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State Senate panel to probe refineries, gas prices

With gas prices soaring and news that the Chevron Richmond refinery’s crude oil unit won’t reopen until 2013, a state Senate committee will hold a hearing next month on the safety and reliability of California’s gasoline production system and its impacts on gas prices and the economy.

State Sen. Mark Leno, D-San Francisco, announced today he’ll convene the Senate Select Committee on Bay Area Transportation to explore the issue.

Mark Leno“The volatile spikes in gas prices and gas shortages in our state in recent weeks indicate serious problems with California refineries,” Leno said in a news release. “I am concerned that refineries have no incentive for keeping their operations safe and fully functional because their profits increase greatly following any type of disruption, whether it is the consequence of a potentially deadly explosion or failed piping. Meanwhile, consumers are paying the price for these refinery errors, not only at the pumps, but also in the risks posed to public health and safety.”

Leno said the hearing will focus on two main topics: system reliability for California’s refineries and its effect on the economy; and the state’s oversight process and role related to refinery worker safety. Topics may include monitoring health and safety at the state’s 15 oil refineries, state compliance and enforcement at refineries, West Coast gasoline prices and how they may be manipulated, refinery capacity and its relationship to gas prices and the economy, and the Chevron Richmond fire investigation.

“Chevron’s announcement late yesterday that its Richmond (crude oil) facility will be closed for the remainder of the year could further complicate matters for California,” he said. “Economists have estimated that a lengthy shutdown of that facility could slow the growth rate of the state’s economy by half a percentage point.”

This past weekend, Gov. Jerry Brown urged the California Air Resources Board to make an early switch to the state’s winter blend of gasoline to improve supply, and U.S. Sen. Dianne Feinstein, D-Calif., renewed her call for the Federal Trade Commission to investigate the soaring prices.

U.S. Sen. Barbara Boxer, D-Calif., got into the act Monday, sending a letter urging the Department of Justice’s Oil and Gas Price Fraud Working Group to investigate the recent spike.

“Californians have too often been victimized as unscrupulous traders have created or taken advantage of supply disruptions to drive up energy prices,” Boxer wrote. “We cannot allow market manipulation by those who would seek to profit off the pain of our families at the pump.”

In the letter, Boxer pointed to published reports that cited energy traders saying the sudden rise in gas prices had “many of the hallmarks of a classic short squeeze.”

She acknowledged the maintenance issues facing California refineries beginning with the shutdown of Chevron’s Richmond crude oil unit in August due to a fire, the power outage at Exxon Mobil’s Torrance refinery, and the September shutdown of a Chevron pipeline that supplies crude from the Central Valley to the Bay Area. But noting a pattern of similar maintenance issues at West Coast refineries that led to price spikes earlier this year, Boxer wrote, “it is critical that we ensure that these shutdowns are not part of any broader effort to deliberately keep gasoline supplies tight—and prices high—at the expense of consumers.”

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Feinstein urges FTC probe of CA’s high gas prices

Something’s fishy about the California’s recent spike in gas prices, U.S. Sen. Dianne Feinstein said today.

Feinstein, D-Calif., sent a letter to Federal Trade Commission Chairman Jon Leibowitz urging that the FTC launch an investigation of the sudden rise in prices at the pump.

“The recent price spike began on August 6th, when a refinery fire at Chevron’s Richmond Refinery reduced refining capacity at the state’s third largest refinery,” she wrote. “However, this dangerous incident has not resulted in a reduction of gasoline supply that would explain the recent rapid price increase.”

Feinstein noted gas prices have risen 30 cents per gallon since then, reaching $4.21. “As a result, California has the highest gas prices in the continental United States. The increase is more than double the increase in the national average over the same period.”

“It is important that the Commission use its statutory authority aggressively to pursue and remedy any market schemes or other market distorting activities that have led to either the August spike in California gas prices or the longer term trend of higher gas prices in California,” Feinstein wrote.

Read the entire letter, after the jump…
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Calif. House Dems urge probe of Trayvon’s death

Two dozen California House Democrats wrote to express support for U.S. Attorney General Eric Holder’s investigation of whether the Feb. 26 slaying of 17-year-old Trayvon Martin by a self-styled neighborhood watch captain in Sanford, Fla., “was motivated by racial bias and therefore a hate crime.”

“The family of Trayvon Martin deserves to know the truth and the American people expect justice to be served,” the lawmakers wrote in their letter, which was sent to Holder yesterday.

The letter cites unresolved questions about what led to Martin’s slaying by George Zimmerman, 28, and the Sanford Police Department’s failure to make an arrest.

“It is in the best interest of our constituents and the country that you conduct a thorough investigation that also determines whether this was motivated by racial bias and therefore a hate crime,” the lawmakers wrote. “History has shown that investigating these crimes and enforcing our laws against them bring the issue to light and help our society progress.”

Among those who signed the letter are Anna Eshoo, D-Palo Alto; John Garamendi, D-Walnut Grove; Mike Honda, D-San Jose; Barbara Lee, D-Oakland; Zoe Lofgren, D-San Jose; Jerry McNerney, D-Pleasanton; George Miller, D-Martinez; Jackie Speier, D-Hillsborough; Pete Stark, D-Fremont; Mike Thompson, D-Napa; and Lynn Woolsey, D-Petaluma.

President Barack Obama said Friday it’s “imperative that we investigate every aspect of this,” and noted the case makes him think of his own kids. “If I had a son, he’d look like Trayvon.”