26 Apr SG Interests & Gunnison Energy Agree to $1 Million Fine
April 26, 2013
Local drilling companies SG Interests and Gunnison Energy Corporation have agreed to pay a $1 million fine to settle a case brought by the US Department of Justice (DOJ). The DOJ charged that the two companies colluded to keep prices low on oil and gas leases in the North Fork Valley.
Last year, Citizens for a Healthy Community called on the DOJ and the Judge to reject the previously proposed $550,000 settlement because it was not in the public interest. The Judge agreed, and said “There is no basis for saying that the approval of these settlements would act as a deterrence to these defendants and others in the industry.”
Now, the new settlement will go back to Judge Matsch with the DOJ again seeking approval to settle the case. However, this settlement still fails to satisfy the public interest, because the companies admit no guilt and are allowed to keep the leases they allegedly purchased through an illegal bid rigging arrangement.
According to an article in the Aspen Daily News, the Judge could still reject the settlement as insufficient. Diana Moss, an adjunct economics professor at the University of Colorado-Boulder and vice president of the American Antitrust Institute, told the Daily News:
“If the judge cares about sending strong messages to companies behaving in an anticompetitive manner, I can see him coming back again and saying, now, hold on, wait a minute … If Matsch wants to go to the mat on this and make a point that antitrust remedies need to be more punitive, he could stop it up again.”
There is no set timeline for the Judge’s decision, but we will keep you posted on how this case progresses. In a separate matter, both companies are currently under investigation by the DOJ regarding price gouging on the Bull Mountain pipeline.