A legal case against the OPEC cartel
Decades of putting up with OPEC have not reduced oil prices.
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High gas prices have now gone from consumer irritation to a serious threat to our national economic health. Our antitrust laws are tailor-made to help out in such a crisis.Skip to next paragraph
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OPEC is clearly a "combination or conspiracy" that restrains trade in violation of the Sherman Antitrust Act. Still, over the years, courts have made it nearly impossible to use the act against OPEC, whose members claim they are sovereign nations and thus immune from such prosecution.
But OPEC's behavior is commercial, not governmental or diplomatic. It is perfectly appropriate for Congress to remove these legal obstacles. Foreign businesses and individuals have long been subject to US antitrust laws – even for conduct overseas, if it has substantial effect on commerce here. So should OPEC.
Imagine suing OPEC members for the amount they overcharged for petroleum products the US government purchased. Imagine the seizure of OPEC assets to pay this award, such as Venezuelan government-owned Citgo headquarters in Houston or Saudi Arabia's Aramco assets in New York.
And imagine Justice Department officials compelling OPEC and its coconspirators to disclose documents that might bring to light exactly how this cartel has functioned. Might this information show a relationship between OPEC and US oil companies?
If we are afraid of OPEC, remember that our decades of putting up with this cartel have done nothing to reduce oil prices.
The bill Congress proposed was actually somewhat cautious. It didn't allow private suits for damages but gave enforcement jurisdiction exclusively to the Justice Department. Under the Bush administration, the attorney general seems unlikely to have used this authority anyway, but all that could change come January, when a new president and new Congress get to work.
Job One for them should be to look past the fearmongering rhetoric and enact this important piece of legislation.
At the very least, passage of this bill would send this loud and clear message to OPEC: Competition – the basis of free enterprise and economic organization throughout much of the world – ought to be the norm for producing oil just as it is for producing anything else.