WASHINGTON – Congressman Dale E. Kildee voted this week to institute federal price gouging legislation in the wake of obscene profits being reported by America’s largest oil companies while consumers pay more and more at the pump.  Kildee voted for H.R. 5253, which would institute civil and criminal penalties for wholesale and retail price gouging violations.  The bill passed the House of Representatives easily, by a vote of 389-34, on May 5. However, Kildee noted that Democrats in Congress have been pushing for similar legislation for months with no activity from the Republican Congress and the Administration, until they were finally pressured into passing a bill due to rising consumer anger over gasoline prices.

“With the beginning of the family holiday travel season almost upon us, it’s time to put real penalties in place for those who jack up the price of gasoline,” Kildee said.  “The people deserve to know that the unethical actions of those willing to prey on consumer vulnerability are going to be punished.  I have been calling for such action along with many of my Democratic colleagues for months now, and we have seen the consequences of doing nothing.”

Congressman Kildee cosponsored legislation introduced six months ago by Michigan Representative Bart Stupak to give the Federal Trade Commission (FTC) explicit authority to investigate and prosecute companies engaged in price gouging, but the bill was never considered by the House majority.  In April of 2005, Congressman Kildee cosponsored H.R. 2070, the Gas Price Spike Act penalizing price gougers with a windfall profits tax.  At the time, oil prices had set new highs at $57 a barrel and the average price for a gallon of gasoline in Michigan was $2.25, prices that are a downright bargain compared to $74 a barrel and $2.85 for a gallon of average-grade gasoline in Michigan yesterday, when the Republican House of Representatives finally got around to passing H.R. 5253.

H.R. 5253 prohibits price gouging - at any time - in the market for gasoline, diesel fuel, crude oil, home heating oil and biofuels. Specific provisions in the legislation will provide for a federal definition for price gouging instead of relying on each state’s varied interpretation of the practice.  The bill will establish civil penalties for price gouging at a level of three times the ill-gotten gains for both wholesale and retail sellers.  Civil penalties collected would be deposited into either a fund used for paying compensation to consumers for violation of state consumer protection laws or into a state's general fund.  Criminal penalties for wholesale violations could bring a fine of up to $150 million plus prison time.