WaPo Post Mortem

Paul Bloom, Energy Department Lawyer
by Matt Schudel

The Department of Energy was created in August 1977 by President Jimmy Carter, and Paul Bloom joined its staff as a special counsel in December of that year. He spent only three years as a lawyer for the department, but he had an outsized influence.

Mr. Bloom, who died last month, was given the unenviable job of dragging money out of the country’s major oil companies. He had been a natural resources lawyer in New Mexico before coming to Washington, and he wasn’t expected to be able to accomplish much against the arrayed legal and financial might of Big Oil.

There were all sorts of complicated pricing regulations on the petroleum industry in the 1970s, and Mr. Bloom was charged with finding cases when the companies had overcharged their customers. Against all odds, Mr. Bloom and his staff of 450 lawyers and auditors, launched investigations of the country’s 34 largest oil companies.

Soon enough, he began dragging money out of them, proving that one man can indeed make a difference in government policy. When he left office in January 1981, after the election of Ronald Reagan, the Reagan appointees threatened to prosecute Mr. Bloom because he had given $4 million in interest income to charities that gave money to help poor people with their heating bills.

With Reagan, the era of price regulation was over, and Mr. Bloom’s special counsel office was allowed to wither away. Still, over the next few years, as a result of the investigations he launched, billions of dollars flowed back to the government and to wronged customers from the oil companies.

No one seems to remember this incident now, but it was a big deal at the time — especially Mr. Bloom’s grand farewell gesture. It’s one of the pleasures of obituary writing to discover someone like Paul Bloom and to unearth such fascinating, if forgotten, episodes of history.

Paul L. Bloom, 70; battled Big Oil in Carter Years

From the Washington Post:

Lawyer recovered billions from oil companies in Carter years

By Matt Schudel
Washington Post Staff Writer
Saturday, November 7, 2009

Paul L. Bloom, 70, an Energy Department lawyer who led a Carter administration effort that recovered billions of dollars from major oil companies that had overcharged their customers, died Oct. 9 of pancreatic cancer at Montgomery Hospice’s Casey House in Rockville. He lived in Chevy Chase.

After working as a natural resources lawyer in New Mexico, Mr. Bloom was named a special counsel for compliance at the newly created Department of Energy in late 1977. His quixotic task was to go after Big Oil to seek restitution for violations of federal regulatory laws.

Described in a 1980 National Journal article as “an ambling and amiable man with an impish sense of humor,” Mr. Bloom liked to pass himself off as a country lawyer unaccustomed to the ways of Washington. But his staff of 450 lawyers and accountants quickly set out to examine the records of the nation’s 34 largest oil companies.

“We have 65 people at the Exxon site every day,” Mr. Bloom told The Washington Post in 1978, “and they are poring over microfilm machines, practically going blind.”

The wide-ranging investigation enraged the oil business, prompting a Conoco spokesman to complain that Mr. Bloom’s office was “regularly flooding the news media with releases based on unsubstantiated charges and incorrect assumptions designed to demoralize the petroleum industry and mislead the public.”

The business magazine Fortune saw him as “a bear of a cop” whose “tactic seems to be to allege the largest violations he can possibly claim while keeping a straight face.”

Battling resistance from the oil industry, Mr. Bloom concluded that after new regulations had gone into effect in the 1970s, the petroleum firms had defrauded their customers and the public of about $11 billion. Under the threat of criminal prosecution, he negotiated settlements with the companies, which ultimately paid back about $6 billion over the next decade.
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In one instance, Mr. Bloom reached a $280 million settlement with Standard Oil of Indiana, also known as Amoco. As part of the agreement, the company paid $71 million to the government. That money accrued $4 million in interest while sitting in federal coffers.

As a grand gesture on his final full day in office, Jan. 19, 1981, Mr. Bloom donated the $4 million — in installments of $1 million each — to four charities: the National Council of Churches, the Salvation Army, Catholic Charities USA and the Jewish Federations of North America. Each organization had a program to help poor people with their heating bills.

Mr. Bloom was seen, depending on one’s point of view, as either a Robin Hood or an enemy of the state. The incoming Reagan administration threatened to prosecute him for wantonly wasting federal funds, but his supporters saw him as a government official who put cash directly in the hands of the people who needed it most.

“I felt that if I could find a cost-effective way to reach poor people, I had an obligation to do so,” Mr. Bloom said at the time.

In short order, the funding for Mr. Bloom’s office was reduced from $52 million to $12 million, effectively gutting its ability to take on Big Oil. Under pressure from Reagan-appointed DOE officials, each of the charities returned $250,000 to the government.

By the late 1980s, after several cases initiated by Mr. Bloom had wound their way through the courts, the oil companies had refunded an estimated $6 billion to their customers and the government.

“For a comparatively minuscule federal investment,” a 1987 Washington Monthly article stated, “the program has achieved spectacular success.”

Paul Laurence Bloom was born May 14, 1939, in Norfolk and grew up in Portsmouth, Va. He graduated from the University of Chicago and, in the early 1960s, from law school at the University of New Mexico. He spent 12 years as chief counsel for the New Mexico state engineer, specializing in water rights.

After leaving his special counsel post, Mr. Bloom stayed in Washington while working for a New Mexico law firm on energy and water law. He also represented several Indian tribes.

Mr. Bloom led a long legal fight that, in 2003, defeated a strip-mining effort that threatened the Zuni Salt Lake in New Mexico, a sacred site to the Zuni Indians and other tribes. He retired in 2005.

Survivors include his wife of 32 years, Marjorie Rosenthal Bloom of Chevy Chase; three children, Adam Bloom of Manhattan, N.Y., Judah Bloom of Bellevue, Wash., and Ester Bloom of Brooklyn Heights, N.Y.; and a brother.

Paul L. Bloom, 1939-2009: Big Oil Foe Went to Bat for N.M. Tribe

From the Sante Fe New Mexican:

Attorney credited for saving Zuni Salt Lake and for drafting much of West’s water law

Dennis J. Carroll | For The New Mexican
10/11/2009 – 10/12/09
Paul L. Bloom, a leading New Mexico water and energy lawyer who also directed the Carter administration’s attack against Big Oil price fixers for bilking Americans out of billions of dollars, died Friday at a hospice near his home in Chevy Chase, Md., his family said Sunday. He was 70.

Bloom’s son, Adam, said his father died after battles with pancreatic and colon cancer.

In New Mexico, Bloom was known in the late 1990s and early 2000s for his work on behalf of several tribal communities — particularly the Zuni, who credited him with saving the Zuni Salt Lake from a coal strip-mining operation proposed by an Arizona utility company.

In 2003, the company, the Salt River Project, abandoned its efforts to create the Fence Lake Mine.

Before joining the Carter administration in 1978, Bloom served as the chief counsel for the New Mexico state engineer. In 1966, Bloom, as a young lawyer in the state engineer’s office, filed the Aamodt water-rights lawsuit in federal court. Congress is only now, 43 years later, considering a proposed settlement, designed to resolve water-rights issues for pueblos and non-Indians in the Pojoaque Valley.

In a message to Bloom’s family, former Gov. Bruce King described Bloom as “an exceptionally gifted public servant. As Chief Counsel to the legendary State Engineer Steve Reynolds and the New Mexico Interstate Stream Commission, he drafted much of the definitive legislation and developed the rules and regulations that established the doctrine of prior appropriation as the standard of water law in the Western United States.”

Later, as a contract attorney to the governor’s office, local governments and acequias, King said, Bloom “brought cases before New Mexico courts that often established precedents for future legal disputes.”

Former Zuni Gov. Malcolm B. Bowekaty, in a letter to the family expressing the tribe’s condolences, said: “Paul helped us tremendously in a difficult battle on one of our most sacred sites — the Zuni Salt Lake (Ma’k'yayanne).

“His legal expertise and litigation strategies turned near defeat into a victory. Our religious leaders shared important information that lent strength to the legal tactics — after four years we won. Paul and his colleagues from (the Santa Fe law firm of) White, Koch and Kelly deserve credit in our hard fought battle.”

Bowekaty added that Bloom’s “honest interest in Zuni culture kindled some sense of affinity to his own Jewish heritage. … My Tribal Council used to tease him that he was a reincarnated Bow Priest — our historical front line warriors.”

As special council for compliance in President Carter’s Energy Department, Bloom was the administration’s lead attack dog against Big Oil’s alleged price-fixing and collusion, in which oil companies were accused of violating President Nixon’s price controls on crude oil and other petroleum products that were in effect from 1973 until 1981, when President Reagan ended them.

In a February 1987 article, the Washington Monthly noted that “for a comparatively minuscule federal investment, the program has achieved spectacular success, having so far generated some $6 billion in refunds to customers, payments to the government, and other forms of restitution. Proceeds have gone to schools and hospitals, to poor people and budget-slashed state governments, and even to help whittle down the federal deficit.”

Bloom received national attention when, on the last day of the Carter administration, according to a New York Times report at the time, he distributed $4 million from a Standard Oil Co. settlement to four charities — the Salvation Army, the National Council of Churches, Catholic Charities and the National Jewish Welfare Appeal.

Bloom is survived by his wife, Marjorie of Chevy Chase, Md.; sons Adam of Manhattan, N.Y., and Judah of Redmond, Wash.; and a daughter, Ester of Brooklyn, N.Y.

A brother, David, lives in Santa Fe.

Funeral services were to be held today in Maryland.

Dennis Carroll can be reached at 986-3091 or dcarroll@sfnewmexican.com.

Paul L. Bloom, Who Tackled Overcharging by Oil Companies, Dies at 70

From the New York Times, October 12, 2009:

By DOUGLAS MARTIN
Published: October 12, 2009

Paul L. Bloom, a lawyer in the Carter administration’s Energy Department who pursued oil companies for overcharging and won billions of dollars in refunds for customers, the government and others, died Saturday in Chevy Chase, Md. He was 70.

The cause was pancreatic cancer, his family said.

James Schlesinger, as the first secretary of the new Department of Energy, appointed Mr. Bloom in 1977 to investigate oil companies’ compliance with oil pricing regulations. President Richard M. Nixon had initiated oil price controls as a temporary measure at the time of the Arab oil embargo of 1973, but enforcement of the complicated regulations was lax.

Mr. Bloom, as special counsel for compliance, ended up accusing 33 of the 35 largest oil producers and refiners of overcharges amounting to $11 billion. By 1987, the government had collected $6 billion in refunds as a result of Mr. Bloom’s suits.

But other than the pleasures of success, it was often a thankless job. Oil companies complained, with some justification, that the rules, and Mr. Bloom’s interpretations, were maddeningly arcane. Economists said price controls, by definition, weakened market efficiency. Consumer groups criticized Mr. Bloom as being too willing to settle cases, often on terms favorable to the industry.

Mr. Bloom, who had been a natural resources lawyer in New Mexico, responded boldly. “I had to make myself obnoxious or nothing would have ever been accomplished,” he said in an interview with The New York Times in 1980.

The Carter administration began to address oil pricing by appointing a task force, of which Mr. Bloom was a member. The task force found lack of direction and inertia among the 350 lawyers and accountants monitoring oil prices: some auditors assigned to individual refineries had moved television sets into their offices and spent the day watching soap operas, Mr. Bloom told The Times.

The National Journal reported that an auditing team had been allowed to remain at Mobil in New York, even though the company’s operations had moved to Houston.

The task force decided one person should be given great authority to administer both current enforcement and cleaning up the muddle of the past. Mr. Bloom was given the job. He beefed up his staff of professionals to more than 600 plus several hundred auditors employed by private firms, and cast a wide net of subpoenas. Fortune magazine in 1980 said he “proved to be a bear of a cop.”
The National Journal said in 1980 that Mr. Bloom played a high stakes poker game with the oil companies, making strong accusations and brandishing the real, but unspoken, threat of criminal action. The companies complained that the government’s rules were almost impossible to follow: for one thing, they required companies to divide oil from the same general area into “old” oil, which was subject to price controls, and more recently discovered oil, which could be sold for the market price.

Mr. Bloom angered critics of the oil companies by allowing them to put some overcharges that could not readily be refunded into domestic oil and gas exploration.

Asked by The National Journal in 1980 if he was letting companies off the hook by letting them do what they would normally do on their own, he said, “I don’t think I have to apologize to anybody, if I can get them to spend that money here instead of Nigeria or the North Sea.”

Paul Laurence Bloom was born in Norfolk, Va., on May 14, 1939, and graduated from the University of Chicago. He graduated from law school at the University of New Mexico, then worked for New Mexico as a water and natural resources lawyer.

When President Ronald Reagan took office in 1981, he ended oil price controls, but kept a smaller staff to finish up Mr. Bloom’s cases. Mr. Bloom remained in Washington to practice law.

Mr. Bloom is survived by his wife, Marjorie; his sons Adam and Judah; and his daughter, Ester Bloom.

One of Mr. Bloom’s last acts as the Carter administration was ending was to give four charities $1 million each from $4 million in unexpected refunds from a major oil company. The Reagan administration complained that he had given away taxpayers’ money, but he maintained he had given the money to those who could best reach poor people with heating needs.

In the end, the charities distributed part of the money themselves and returned some to the government.

God Bless Mr. Bloom!

From the New York Times, 1981

To the Editor:

Paul Bloom’s grand exit from his job as special counsel to the Energy Department in the Carter Administration prods our uncomfortable acceptance of 10-figure oil profits. The mind has almost gotten used to corporate gains in the billions, oil sheiks fresh out of ideas about what to do with their money, petroleum executives living on such a grand scale that it makes the palaces of Pharoah look like the South Bronx.

But not Mr. Bloom’s mind. No weak resignation for him. In one glorious parting act, he distributed $4 million (a mere frivolity by measure of fossil-fuel accounts) to four charities with the promise that all would be spent helping the poor warm their bones at oil burners too expensive for them to run.

Mr. Bloom’s imagination hasn’t failed him or his heart. Yet even more, his wild act of charity reminds us of that line from ”Man of La Mancha,” which Mr. Bloom seems to have taken to heart: ”Too much sanity may be madness. And maddest of all, to see life as it is and not as it should be.”

God bless Mr. Bloom!

ROBERT H. POPE, Pastor, Pascack Reformed Church, Park Ridge, N.J., Feb. 14, 1981