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Texas Attorney General Probes 
Reports of Price Gouging
By Polly Ross Hughes, Houston Chronicle
Knight Ridder/Tribune Business News 

Sep. 13--AUSTIN -- Hundreds of price-gouging complaints are pouring into the Texas attorney general's office, with businesses accused of illegally profiting from panic. 

"We've had confirmed reports of up to $5 a gallon for gasoline and unconfirmed reports as high as $7," Texas Attorney General John Cornyn said Wednesday, noting the highest prices were found in North Texas and the Rio Grande Valley. 

Although price spikes at gas pumps were reported in all parts of Texas, stranded travelers appear to have fallen victim as well, especially near airports, the complaints show. 

"As far as hotel rooms go, we've heard double the usual rates," Cornyn said. "We've had rental cars go as high as $460 a day in Austin. That was after all the planes had been grounded and people (were) wanting to get home." 

Reports of soaring Texas prices quickly followed Tuesday's terrorist attacks in New York and Washington, D.C., with more than 400 logged at the attorney general's consumer protection office by Wednesday afternoon. Nearly a third were from Houston, the figures show. 

Decrying those who might try to profit from tragedy, Gov. Rick Perry warned, "I will use the full force of our state government to stop that." 

Perry declared a limited-purpose disaster for Texas to help strengthen enforcement of the state's deceptive trade practices act. 

Robert Howden, communications director for the governor, said Wednesday he called the Texas Retailers Association, Texas Oil and Gas Association and Texas Oil Marketers Association to urge their members to avoid gouging. 

Based on unofficial reports, he also called two gasoline wholesale marketers -- San Antonio-based Valero Energy and Koch Industries of Wichita, Kan. -- concerning rising prices in Texas. 

"Our wholesale prices increased approximately 8 cents per gallon Tuesday in our Texas markets, " said Koch Petroleum Group spokesman Marc Palazzo. 

By late Wednesday, he added, the company's wholesale prices were back to pre-crisis levels. 

Valero Energy spokeswoman Mary Rose Brown said her company's West Coast wholesale prices rose 10 cents a gallon Tuesday in direct reaction to price hikes of 15 to 20 cents by other marketers. The Texas situation might have been similar, she said. 

"All it says is the market gets jittery," Brown said. "That's what goes on in an uncertain market. Those kinds of blips are very short-lived." 

Howden said he had also heard of price hikes by Exxon Mobil but did not call the company because its prices had already fallen back. 

"To reiterate, we have not taken any pricing action with Exxon and Mobil-branded customers as a result of this tragedy," the company said in a statement. "We cannot control what independent dealers or distributors do but are encouraging them to act responsibly." 

The American Petroleum Institute also sought to reassure consumers that fuel supplies are not in short supply and that markets have settled. 

"API and its members do not condone and, in fact, strongly denounce any attempt to use this crisis to take advantage of consumers," it said. "If there is any illegal activity, those responsible should be prosecuted to the fullest extent of the law." 

Cornyn said his office will not coddle those found guilty of illegal pricing schemes. 

"Certainly consumers do not have to put up with it," he said, noting that the 400 calls received by his office are probably a fraction of the complaints lodged with local law enforcement, government officials and state legislators. 

Complaints are being investigated, and refunds could result as a voluntary measure by the offenders. In disputed cases, Cornyn's office can sue and seek civil penalties up to $10,000. 

Anyone believing they have been victimized by price gougers can file complaints with the Attorney General's Consumer Protection Division at 800-337-3928 or 800-252-8011. 

Cornyn also warned the public to beware of potential scam artists and telemarketers pretending to collect money for charities to help the victims of Tuesday's terrorism. Contributions should go to well-established charities instead, he advised. 

"Some of these folks will prey on your emotions. They'll use any kind of trick to try to separate you from your money," he said. 

-----To see more of the Houston Chronicle, or to subscribe to the newspaper, go to http://www.chron.com 

(c) 2001, Houston Chronicle. Distributed by Knight Ridder/Tribune Business News. 


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