Wednesday, November 15, 2006

Guilty, and damn proud of it! 

You gotta love this - Venezuela owned Citgo is getting sued for participating in OPEC and helping them influence prices. Sounds to be too bizarre to be true but here it is (with the really good parts highlighted by me):

HOUSTON — Companies who buy oil products from Citgo Petroleum Corp. filed a federal suit against the company alleging that the Venezuelan-owned refiner conspired with the Organization of Petroleum Exporting Countries (OPEC) to fix oil prices.
The complaint, filed this week, alleges that Citgo implemented anti-competitive supply contracts in the U.S. and manipulated the price of oil to anti-competitive levels.

The 11-member cartel determines the output of member countries at regular meetings. In October, OPEC announced plans to cut output by 1.2 million barrels a day, or 4 percent of its output at the time, and warned that it could announce more production cuts when it meets Dec. 14 in Abuja, Nigeria.

"We're studying the allegations and beyond that we have no comment," said Citgo spokesman David McCollum.

The complaint comes amid continued ill-will against the company that began six weeks ago, when Venezuelan President Hugo Chavez verbally attacked President George W. Bush in front of the United Nations.

The complaint alleges that Citgo has participated in "OPEC's illegal price-fixing conspiracy, has provided unlawful assistance to OPEC, and has implemented Venezuela's and OPEC's price-fixing scheme in the United States," according to a release from the plaintiff's lawyers.

The complaint also alleges that Citgo has provided OPEC with technical services, and with information that assists OPEC in its effort to fix the price of oil at anti-competitive levels.

The plaintiffs are seeking to recover actual and punitive damages, and are asking the court to prohibit Citgo from such behavior in the future.

The case is set for a pre-trial hearing on Feb. 2 in Houston.

The suit is not the first to be launched against OPEC. During the 1970s, the International Association of Machinists sued OPEC directly in California, also accusing the cartel of price-fixing. That suit was filed against the individual member-states of OPEC, and was dismissed after the members refused to appear in court.

But the suit against Citgo may benefit from a greater willingness to hold corporations responsible as co-conspirators with governments for violating people's rights, said University of Texas law professor Jay Westbrook.

"There's more willingness now for the U.S. courts to say that a U.S. corporation might be sue-able as somehow a co-conspirator in violating people's rights," Westbrook said.

However, even with such a presumption, the plaintiffs still have to prove that the company was responsible, or complicit with the government and with OPEC, he said.

I wonder if "guilty and proud" is a valid legal plea?

On a serious note though, it will be interesting to see where this goes. And I do wonder what is behind it. Saudi Arabia is a much more influential member of OPEC than Venezuela and has lots of assets in the U.S. yet I've never heard of anyone considering a suit against them or any other OPEC member. It would seem there might be some politics behind this.


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