WASHINGTON (Reuters) - A powerful investigative committee in the U.S. House of Representatives will probe whether the U.S. government extracted sufficient penalties from London-based BP (BP.L) for allegedly manipulating U.S. propane markets, the panel’s chairman said on Wednesday.
BP has agreed to pay $303 million (148 million pounds) to settle civil price-fixing charges brought by federal investigators and “in light of this settlement, the Energy and Commerce Committee will investigate whether government agencies acted appropriately during pricing negotiations with BP,” said Rep. John Dingell of Michigan, the committee’s chairman.
“We are specifically interested in determining whether the penalties levied are sufficient deterrents to improper behavior,” Dingell said in a statement.
Dingell’s committee, which in the past has probed corporate scandals like the Enron debacle, has focused a great deal of attention in recent years on a series of mishaps at BP — from a leaky pipeline in Alaska to a deadly explosion at a Texas refinery in 2005.
The U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) will announce the deal with BP on Thursday, according to a source familiar with the matter who spoke on condition of anonymity.
BP is the largest supplier of propane in North America.
U.S. regulators have said that BP used a controlling position in the propane market to drive up prices for the gas, which mostly went to rural customers to heat their homes.
Representatives of BP and the CFTC declined to comment.
In a 42-page complaint filed in a U.S. district court in Illinois in June 2006, the CFTC alleged that “with the knowledge, advice, and consent of senior management, BP employees developed and executed a speculative trading strategy in which BP cornered the February 2004 ... physical propane market.”