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.
ad_icon

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.