FBI Probes Ethics Case Involving OMB Official

The FBI is investigating whether the second-ranking official in the White House Office of Management and Budget illegally exerted pressure to delay a $16-million enforcement case by the government against his family’s oil company, Administration officials said Tuesday.

Joseph R. Wright Jr., chairman of the President’s Council on Integrity and Efficiency, acknowledged that he had called an Energy Department official in 1982 about a departmental investigation involving Tulsa, Okla.-based Anchor Gasoline Corp., operated by his father. But in a statement issued Tuesday by his office, he characterized that telephone call as “a mistake.”

The department’s Kansas City regional office had alleged that Anchor had violated federal price controls on oil and refined products that were in effect from 1973 to 1981, charges that the company denies. According to government records, after Wright’s telephone call to Ray Hanzlik, administrator of the department’s Economic Regulatory Administration, the case was put on hold for more than two years.

Wright contends that he only sought a hearing for company officials during the call. “All I asked for was a meeting,” he said.

But the FBI will focus its investigation on whether he violated federal ethics regulations that prohibit government officials from acting on behalf of their own financial interests. Although family members own 20% of Anchor’s stock, Wright says that he personally owns only 3%, valued at more than $250,000 on his annual financial disclosure form.

“At no time did I ask for favored treatment for the company,” said Wright, who also asserted that he made clear that the firm was “my family company.” Similarly, Hanzlik agreed through a spokesman that Wright had not asked for special treatment and apparently only wanted to speed up a slow bureaucratic process to help Anchor resolve the dispute.

Hanzlik said he never considered Wright’s phone call improper, but “I would prefer he hadn’t done it because it raises questions. . . . There’s an appearance problem.” Word of the investigation was first reported Tuesday in the Wall Street Journal.

Hanzlik said his agency decided to re-examine the basis for the charges after he met with Anchor officials. At first, he said, it appeared that the regional office had erred, but last January--more than two years after Wright’s call--department officials reissued their formal complaint.

Anchor was accused of violating government price controls through $7.6 million in alleged overcharges for gasoline, diesel fuel, butane and propane. About $8.5 million in interest also was sought.

Meanwhile, the Energy Department’s inspector general, who operates under the auspices of Wright’s OMB council in rooting out waste, fraud and inefficiency, has joined FBI agents in examining how the Anchor case has been handled.Additional questions are being asked by the House Energy and Commerce subcommittee on oversight and investigations.

Wright, meanwhile, says he is angry at himself. “I blew it from a PR standpoint,” he said in his statement. “If I had to do it over again, I wouldn’t do it because of the way it looks.”