Illinois A-G tells gas stations to donate money to Red Cross or face...

[sabra]

http://www.wreg.com/Global/story.asp?S=4282173

Illinois A-G tells gas stations to donate money to Red Cross or face gas price gouging charges

SPRINGFIELD, Ill. Several Illinois gas stations are being given a choice by the state attorney general's office: donate one-thousand dollars to the American Red Cross or risk being sued for price gouging after Hurricane Katrina.

The options were spelled out in letters sent to 18 gas stations this week.

Officials say gas prices at some stations rose as high as three-dollars-63 cents a gallon after Katrina hit the Gulf Coast.

Deborah Hagan with the consumer protection division says in an emergency situation "retailers have the obligation not to increase their prices" over what wholesalers are charging.

[LostinVA]

1. The motive is great, however I wish it was to someone other

than the Red Cross. Surely Illinois has it's own great charities for the poor, children, and the elderly.

But, good on them for doing something!

[goforit]

3. Yep...The Red Cross is pretty corrupt.

[Coastie for Truth]

28. Link (and NOT to a blog, please)

Note my avatar.

[Danieljay]

33. thats an effing uninformed statement

but your entitled.

Go get trained like some of us and spend a 21 day deployment with the Red Cross down along the coast and then tell me what an effed up corrupt organization it is. The Red Cross is busting ass trying to make up for the effed up FEMA efforts. There are thousands of Red Cross volunteers STILL rotating deployments to help out.

If you don't work for the Red Cross and know whats REALLY going on then you obviously don't know what the hell you are talking about.

I DO work for the Red Cross and though not perfect by any means its by NO means corrupt.

[Coastie for Truth]

34. A lot of the people expressing hostility to the Red Cross

probably would like to see something like the Peace Corps - or Habitat for Humanity - or Mercy Corps - or Physicians Without Borders.

What they don't understand - with Bush having pulled out the National Guard - is that the default is "military" an amalgam of the old "Civil Defense" and the functions of the National Guard -- the . The State Defense Force is "The Governors Other Army", and is described by Wikipedia as

State Defense Forces, State Guards, State Military Reserve, or State Militia in the United States are military units that operate under the sole authority of a state government. State Defense Forces are authorized by state and federal law and are under the command of the governor, as commander-in-chief, through the Adjutant General as the state's chief military officer.

State Defense Forces are distinct from the National Guard in that they are not federal entities and cannot be made so. The federal government officially recognized State Defense Forces under 32 USC Sec 109 and provided that State Defense Forces "may not be called, ordered, or drafted into the armed forces" (of the United States), thus preserving their separation from the National Guard.

Only about 25 states currently have active State Defense Forces, plus Puerto Rico, each with different levels of activity, state support, and strength.

SDFs generally operate with emergency management and homeland security missions.

--snip--

Most states organize their State Defense Force in parallel to their National Guard force, having it report to the governor through the Adjutant General. The Force is not funded by the federal government in any way. In most states, members act on a completely volunteer basis, have to purchase any uniforms after the first, and supply their own arms (if armed).

Kind of like with military discipline and military organization/chain of command.

I am a Red Cross Volunteer (Disaster Assistance, Shelter Manager), a CERT Volunteer (Neighborhood Captain), a Ham Radio Operator, and an eleven year veteran of the United States Coast Guard.

If the Red Cross goes away tomorrow - it will be replaced by some kind of a uniformed, military organization (not the Salvation Army or the Boy Scouts). Is that really what you want.

[elehhhhna]

6. The RC has only spent a THIRD of the Tsunami $$$.

[Coastie for Truth]

29. Link pleae (and not to a blog) -- Note the avatar.

[Coastie for Truth]

32. The other "big charities" are "faith based"

Like the Arch Diocese, the Salvation Army (Evangelical Methodist), and Chabad Lubavitch.

In Pennsylvania it violates the state constitution to compel a contribution to a "faith based charity."

[dansolo]

35. I think the point is

that the illegal profits gained from Katrina should go to help out the Katrina victims. Like it or not, the Red Cross is the principle conduit for chartiable donations for Katrina.

[goforit]

2. Hats off to the AG of Illinois!!! I would of hoped it was the corporations

[BOSSHOG]

4. While charitable giving is a good idea

I'd prefer the offer wasn't on the table. Just sue them. Price gouging is a conservative republican value. Have the trials commence in 06 and let republicans, especially bush administration spokesmen like limbaugh and hannity defend the practice.

[Psephos]

16. Good idea, but what does law raising your prices break?

For example, is it against the law for a grocery store to raise its milk price to $7/gallon?

My guess is it would be tough to craft anti-high price legislation without creating a lot of unintended side-effects or unexpected ways around the law.

Seems to me the most natural path to a suit would be to show conspiracy/collusion in price-setting instead, against which we have strong laws.

Peace.

[pitohui]

22. in louisiana it is

i think bosshog is from this neck of the woods

yes, it is illegal to boost prices in some states during a catastrophe and its aftermath, louisiana is one of them

it's called price-gouging and it is a crime against humanity

i'm shocked it is not a crime in all states, if pitohui were king of the world it would be punishable by jail time, gougers are not human, where everybody else saw a world of hurt & need, a certain category of -- i don't want to call them swine and insult a noble animal -- a certain category of human garbage just saw an opportunity to take advantage of people who had no choice to buy gasoline & food because they were under evacuation orders and had to travel

[Coastie for Truth]

27. Anti-trust Laws (Sherman Act, and most states' "Little Sherman Acts")

"Any contract, combination or conspiracy in restraint of trade ..... " which includes price fixing, and "price leadership" price fixing, and "conscious parallelism of action" price fixing as well as getting together and just "fixing prices."

That's the Federal Law. Illinois' law tracks the Federal Law pretty cloesly.

[pitohui]

21. it takes too long to sue

a lawsuit takes yrs, i was a witness in a civil lawsuit for an incident in 1999, it still isn't settled because of all the appeals & b.s. -- and this a case where i didn't end up needing to testify because it turned out the corporation's evil deed was on tape! the jury prob. thinks the victim already has the money, ha ha ha ha ha

[expatriot]

5. Only $1,000? That's an easy choice. nt

[elehhhhna]

7. and tax-deductable, too!

[ret5hd]

8. Sounds a lot like extortion to me...

a regular protection racket.

[MrPrax]

9. The A-G should do his job...

Are people in Illnois suppose to think this is tough?

Justice blinked with the oil companies from the looks of it...

[hughee99]

10. Sorry, but I don't agree with this...

This is extortion. Either these stations were guilty of price gouging or they weren't. If they were, they should be prosecuted. For the government to say they can avoid prosecution by doing something that is completely unrelated to price gouging makes absolutely no sense to me. Yes, it's, a good idea to donate to charity, but I think it sets an extremely bad precedent when the government starts shaking down anyone (businesses or private citizens) for donations to 3rd party organizations.

[bluerum]

15. They said pay up or go to court. - my beef is that $1000 is nothing. n/t

[hughee99]

23. So if the station ripped off the public,

the government is willing to let it slide if they donate to the red cross? This isn't right. If I steal from person A, will the government not prosecute as long as I donate money to person B? Station owners that did nothing wrong will pay up, just because the court costs would be much more then the required donation.

[bluerum]

25. I would make them pay up a hefty fine. More like $100,000. I agree w/u

in principle. A criminal proceeding is called for. But personally I think greater good would come from a bunch of $100,000 donations to the RC.

[Coastie for Truth]

30. Civil anti-trust under the federal law (Sherman Act)

is 300% of the illgotten gain.

[NanceGreggs]

11. A thousand dollars is NOTHING ...

... just a small price to pay for doing business.

Charge them with price gouging, let the judge or jury come up with an appropriate fine, and then donate the 'fine' to charity.

[hughee99]

24. I agree on this...

prosecute them, fine them, and then let the govt. donate the money, rather than just allow them to pay "protection" money and write it off on their taxes as a charitable donation.

[laureloak]

12. Shouldn't he go after the oil companies instead? n/t

[Coastie for Truth]

31. The independent station owners have a very low margin.

It's the refiners that did the price fixing.

[Jayhawk Lib]

13. What????

This will do nothing to punish the gas stations.... It will be the customers who will pay the donations. It will be a cost of doing business to the stations and will consequently be passed on down to the customers..

[bluerum]

14. I agree. How much did they extort from their customers with

artificially high pricing during that period? Do the math, multiply by 100 and pay the fine.

I like the part about donating to the Red Cross though.

[Selatius]

17. Just sue the fucking bastards for price collusion/fixing

Get subpoenas in there, and get a look at the cashflow statements of these gas stations. From that, you should be able to determine if they increased their prices above and beyond what the wholesale price of gasoline was, and you should be able to determine to what extent they increased their prices. If wholesale went up 50 cents per gallon, which is still a big amount, and they raised their posted price not by 50 cents but by $1.25 or something even higher, then you've got a problem.

If I had my way, I wouldn't have bothered with this stupid charity option for a pittance. I'd sue them and leave a dent in their wallets so big that their greed will be kept in check by their fear of the attorney general.

[Trillo]

18. Another version of Pay to Play?

Given what Hagan stated, the only way to know if retailers were handling it as business as usual or an emergency situation, is to investigate first, then determine what, if any, penalty should be paid.

Without knowing that, it does indeed seem to be extortion-like, even while being perceived a pittance. How does one determine what a pittance is?

I'd also want to know if a biz operated on a fixed markup, a markup based upon total gallons sold per day (so they can pay their fixed costs), or a percentage markup. For example, if wholesale prices went up 50 cents per gallon, but the total gallons of gasoline they could buy, and therefore sell, each day went down, then they'd have to markup their profit on each gallon sold more than 50 cents to be in the same financial situation at the end of each day as they were when supply disruptions did not exist, unless the stations fixed costs went down for those days.

If the stations perceived gouging resulted in the same profit per day, regardless of retail price per gallon, then is a $1000 charitable, but forced, payment simply another version of pay to play? Perhaps the same profit per day would be 'business as usual' instead of 'emergency conditions.' So how much should the station owner sacrifice for the emergency situation stipulation to be realized? Did the lessor the station property is located on also sacrifice due to emergency conditions by reducing the stations fixed costs for that day?

Where does the ripple of "emergency conditions" end, and "buisness as usual" begin?

On the other hand, maybe the stations really did gouge, and each one made $20,000 (an number picked out of the sky) more than they would have made on a normal and typical day. In that case, a $1000 charitable deduction is truly a pittance, a slight slap of the wrist, where any typical business owner would ask themselves if keeping $20K is worth paying $1K and would say, yes, it is.

The only way to know this is to investigate. Can the state afford the investigation? Or is it easier and cheaper to make this offer to see if there are any takers?

[Sinistrous]

19. Gee. I wonder how the A/G narrowed it down to 18 stations

out of the hundreds of stations in Illinois. Maybe the A/G DID do some checking.

Sinistrous

[pitohui]

20. great call!

this is great news and much appreciated

yeah, the red cross is imperfect but they did an awful lot considering -- they sure as hell deserve the $$$ more than the gas gougers do

[Saint Stephen]

26. So the consumer gets screwed yet again

And the red cross gets to pay its CEO another $500,000 per year in salary.

If the stations ripped off consumers (that's us in case you weren't sure), then they should pay us a huge fine... not some bloated corrupt "charity".