Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release - Friday, Sept. 2, 2005.

Contact Bob Brammer - 515-281-6699

A.G. Focuses on Gas Prices, Charity Scams in the Wake of Hurricane Katrina

DES MOINES.   Attorney General Tom Miller said today that damage from Hurricane Katrina is responsible for the latest surge in gasoline prices - but he added that gasoline marketers at all levels must not take advantage of the volatile gas-price situation to charge unjustified prices. He said Upper Midwest attorneys general are joining forces to examine if any illegal forces are at work behind soaring prices.

"In Iowa, we think retailers have been responding responsibly," he said. "Their wholesale prices are rising quickly right now and retail prices are following. That is a function of the worldwide increase in crude oil prices, and now disruption of the system caused by Katrina."

"But it would be unethical for gas marketers at any level to wring excess profits out of this situation," he said, "and it is illegal for competitors to collude and agree on prices. If there is evidence of illegal collusion, we certainly will investigate and take legal action. Right now, the forces for higher prices are primarily from outside Iowa."

Miller said there appears to be ample gasoline other than isolated and temporary spot shortages in Northwest Iowa . He joined other officials in urging consumers not to rush to buy gas, but to purchase it in their normal patterns and to conserve gasoline whenever possible.

Jennifer Moehlmann, an energy analyst with the Iowa DNR, joined Miller at a news briefing Friday on the gasoline situation.

Hurricane Katrina Charity Scams:

Miller also warned consumers that charity scams already appear to be surfacing related to Hurricane Katrina. "It happens with every disaster," he said, "but it's happening faster than ever this time because many scams now are worked over the Internet."

Miller advised consumers to be especially wary of on-line solicitations that ask people to provide credit card numbers or other personal information. "An e-mail appeal may ask you to link to a web site to contribute. The web page may look completely legitimate, but it might be a counterfeit page run by con-artists trying to get your credit card or bank account number. That's just another version of the 'phishing' scam," he said.

"Give generously, but give carefully," he said. "Be very cautious if someone contacts you by phone or email. It's far safer and better for you to make the first move. Find a legitimate charity like the Red Cross or a campaign of your own church or synagogue, and give through them. Newspapers are also publishing the names and addresses and web sites of legitimate charities."

The FEMA website also includes lists of reputable organizations receiving donations to aid victims of the hurricane: www.fema.gov. The "Wise Giving" site of the Better Business Bureau also is a good source: www.give.org.

Miller said the Federal Trade Commission already has identified several questionable on-line charities using "Katrina" in their name. "It's cynical and disgusting, but some con-artists always try to take advantage of other people's suffering. This is no reason for us not to give, but just a reason to give carefully," he said.

More on Gas Prices:

Miller said state attorneys general are coordinating efforts to review and track the gasoline situation. He joined Midwest colleagues yesterday in a letter to the Federal Trade Commission asking the FTC to investigate "whether the price of gasoline in the upper Midwest is being artificially manipulated by reducing refinery capacity or by any other form of market manipulation in the supply chain." The FTC is best situated to determine if there are anti-competitive or other illegal practices on the regional, national and international levels. The Midwest attorneys general also will be reviewing the situation and assembling their own experts or consultants.

About half of Iowa's supply of gasoline originates in the Gulf of Mexico or comes through Gulf ports and pipelines - a system disrupted by Katrina.

The letter also asked the FTC to continually update its local price-monitoring studies that might suggest any illegal activity in the Midwest - patterns in wholesale and retail gasoline prices that are not explained by crude oil prices and other relevant market factors.

Miller said his office also will be talking with associations of Iowa gas retailers and wholesalers and pipelines to hear their analyses of the situation and advise them not to take advantage of the volatile gasoline situation.

Consumers also can cut costs by reducing gasoline consumption through simple measures such as keeping tires inflated to proper levels and keeping engines tuned up, Miller said. Go to http://www.state.ia.us/government/ag/consumer/advisories/reduce_gas.html for a "consumer advisory" bulletin on tips for saving gas.

Miller said he believes Iowa gas retailers are acting responsibly and raising their prices in connection with soaring wholesale prices. In one instance, he said, his office heard a report Thursday of gas at $3.89 per gallon in eastern Iowa - but determined the rumor was erroneous. He said his office called the convenience station and learned they were charging $2.89, but were literally painting a "3" in anticipation of $3 gas. That sparked the rumor, but the gas was being sold at $2.89, the Attorney General's Office was told.

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