Grand jury floated to probe gas prices

Sen. Richard Blumenthal (D-Conn.) on Sunday called for an aggressive federal probe — including a possible grand jury — into whether rising gasoline prices stem from illegal manipulation of energy markets.

President Obama and the Justice Department last week announced a multi-agency task force to explore whether there is price manipulation or fraud afoot and the role of speculative trading in energy futures.

{mosads}Blumenthal, Connecticut’s former attorney general, said on CBS’s “Face the Nation” that federal officials need to play hardball.

“I commend and applaud the president for focusing on this issue, but I think there really needs to be an investigation involving, for example, subpoenas and compulsory process, which I used as attorney general in similar investigations. There needs to be very possibly a grand jury to uncover the potential wrongdoing,” said Blumenthal, who was elected to the Senate last year.

“The Justice Department should take the lead, seize this moment and send a message, a very strong deterrent message that this country will not tolerate the kind of illegal speculation and trading and hedge fund activity that may be driving prices up,” he added.

Blumenthal’s comments come as rising gas prices are reaching the top of the political agenda on Capitol Hill and at the White House. 

Prices are already topping $4-per-gallon in some regions, and the nationwide average is $3.86-per-gallon, compared to $2.85 a year ago, according to AAA.

Attorney General Eric Holder last week vowed, “If illegal conduct is responsible for increasing gas prices, state and federal authorities should take swift action.”

But House Speaker John Boehner’s (R-Ohio) office on Friday called the Democratic focus on potential market abuses a distraction from the need to expand U.S. oil-and-gas drilling (although this would not affect prices in the short-term).

Speaking on the CBS program Sunday, Rep. Tim Griffin (R-Ark.) said that “certainly if there’s something illegal going on, we need to look into that and deal with it,” but suggested the problem lies elsewhere.

“But I don’t need a grand jury to tell you why this country has continuing problems with energy, that’s because we’ve been talking about energy independence for decades,” the freshman Republican said.

“The problem is a lot of the people who talk about energy independence then pursue policies that are counter to that. We can’t talk about energy independence and then say, but you can’t drill here, you can’t drill there. We shouldn’t do this. You start excluding all of the different options,” Griffin said.