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From the 5-25-1997 Daily Sparks Tribune  Hello Mr. Editor? Interested in a bigtime scandal? You want
what? Uhh...no, sorry. No sex, drugs or rock 'n' roll here. But billions of
dollars are being stolen from little people. It's a ripoff everybody can
relate to right at the gas pump. Yes, that's right, gas prices. What? The
story's just not right for your readers? Well, thanks anyway for listening.I had pretty much that conversation with newspaper and magazine editors
all over the country last spring. The public was whistling mad about
skyrocketing gasoline prices and nobody wanted to write the truth except
two obscure small market newspaper columnists. (The other guy is now
retired in the Pacific northwest.)I never gave up trying to get somebody interested. Sonoma State
University's venerable Project Censored, which prides itself as a
years-ahead predictor of major news, did not see fit to include the
petroleum octopus among its top 25 under-reported stories of 1996.One 800-pound gorilla did respond: two-time Pulitzer Prize winner James
Steele, half of the Philadelphia Inquirer's legendary investigative team. I
met him when he lectured at UNR a few years ago. "I would very much like to
see the work you have done on the oil companies," he wrote. "One of the
first projects Don (Barlett) and I undertook as a team back in the early
1970s was a probe of the international oil industry...so this is a subject
dear to our hearts."Barlett and Steele recently moved to Time Magazine, so I have high hopes
that they'll look into how BigOil rips us off every day. Before contacting
Steele or Project Censored, I did a complete web search of the LA Times and
San Francisco Chronicle. I was shocked that they totally ignored the heart
of the story: the predatory, oligopolistic marketing schemes of the major
oil companies, led by ARCO.After more than a year of publishing oil company press releases, the
mainstream media are finally starting to get parts of it right. The best
recent example is veteran reporter Ed Koch's extensive articles in the May
14 Las Vegas Sun.Regular Barbwire readers know the basic outline. In the 1980's, ARCO came
up with an ingenious redlining scheme which has withstood most legal
challenges and driven thousands of independent retailers out of business.
BigOil thus need not conspire to fix prices. They need only look down the
block at ARCO's signs in a given area.They price their gas to retailers according to the physical location of
that dealer within a gerrymandered pricing zone. The arbitrary boundaries
make no sense unless analyzed in terms of forcing independent retailers to
either go major brand or go under. The strategy is now common knowledge,
just not sexy enough for prime time or the front page. ARCO's move was
ordered in the infamous 1982 "smoking gun" memo. Under subpoena from the
1987 Nevada Legislature, the company omitted four critical pages. When
Assemblyman Matthew Callister (D-Las Vegas) obtained a copy, he used it to
push through Nevada's "divorcement law," prohibiting oil refiners from
owning gas stations.Juice lobbyist Harvey Whittemore (yeah, Harvey the gamblers' lawyer
again), is busy down at the ledge even as you read this trying again to get
that law repealed. Because of Nevada's super-high gas taxes, we don't
realize that the divorcement law has given us prices lower than other
states where ARCO operates unchecked. Our overall prices remain much higher
than they need to be because of artificially inflated California prices.Jack Greco, a gutsy Las Vegas ARCO dealer, got the divorcement law passed
in 1987 and further succeeded in getting the story onto the front page of
the Wall Street Journal in 1988. I used it on my talk radio show at the
time and have been following up ever since.Mr. Greco sent me an ARCO price comparison from three states. Last March
26 inPasco-Kennewick-Richland, Washington, ARCO gas sold for 46.1 cents
per gallon before taxes. Just a few miles away in Yakima, ARCO sold for
26.9 cents per gallon more. Transportation cost was obviously not a factor.
It's been about a penny a gallon in the west.In Las Vegas on the same day, the price without tax was 77.8 cents; in
Phoenix, 94.6 cents --- all for the same stuff, pumped through existing
pipelines. Greco asserts that the reason for strikingly low Washington
prices lies in the typical BigOil squeeze against small competitors in a
targeted pricing zone. He points to an article in the March 30 Tri-City
Herald wherein an ARCO representative stated that the company made a profit
at 46.1 cents per gallon before taxes. Greco says only cut throat
competition explains the wide price disparity for the same product."ARCO says it's only seeking value conscious customers," Herald reporter
Don McManman wrote, "but others have a more sinister view. They see an
insatiable corporate carnivore that devours competition, only then to jack
up prices." Courageous Las Vegas Texaco and Exxon retailer John Arfuso told
the 1995 Nevada legislature "there is a direct correlation between our
suppliers' pricing strategy and ARCO's reported price. We constantly follow
ARCO."Eliminating the fiercest price competitors was the goal stated in the 1982
marketing memo. The "traditional two-tier major-independent market system
(is) no longer able to co-exist," ARCO President J.S. Morrison wrote,
concluding "REQUIREMENT: Head off loss of market control!!!" The price zone
strategy was born. Independent gas stations began to disappear.So, as you pay exorbitant gas prices this Memorial Day weekend, get mad.Better yet, get even. Hit your Print button and send copies of this column to local officials. San Diego County supervisors recently introduced a local
divorcement proposal. Pressure your legislator to fight ARCO's push to
repeal Nevada's divorcement law. By banding together and raising hell,
BigOil can be beaten. Much more soon.HALF A MEA CULPA DEPT. My personal thanks for all the phone calls, letters
and e-mail asking about my first absence from the Tribune since the Sunday
edition began its weekly run about nine years ago. I e-mailed the May 11
Barbwire an hour past the Friday deadline. It was by no means the first
time I've ever been late. This occasion resulted in the death penalty. My
fault, and I'm sorry. (The same column got nuked again last Sunday, proving
once again Barbano's cardinal rule of media placement: push the deadline
and get attention, submit too early and get lost.)I have emphatically made my feelings known that the paper owed its readers
the courtesy of informing them. I unilaterally apologize for that
oversight. The Lost Column is really a pretty good piece, available at the
Nevadaweb address, below. It deals with the hypocrisy of some of the
sponsors of the May 7 Reno Gazette-Journal full page ad for the Nevada
Women's Fund. A good number of those benefactors have abominable records of
stomping on womens' rights. Hard copies will be available for the cost of
copying (about 15 cents) later this week at both Reno Office Depots and
Nevada Instant Type in Sparks.HUMAN RIGHTS WATCH TOO: The Nevada Workers Bill of Rights, AB 506, will be
heard in the Nevada assembly labor committee this Thursday at 3:45 p.m. It
was researched and proposed by Kathy Stoneburner, whose husband, Tom, heads
the beleaguered security guards union. Last January, the Reno Hilton fired
all its experienced security personnel and replaced them with low-wage
temps. The Workers Bill would have significantly mitigated the damage
downsizing did to more than 60 Nevada families. (Nationally, mass layoffs
rose 83 percent in the last quarter over the third quarter of 1996.) Call
687-4848 (toll free 800-992-0973) and say you support AB 506. The bill has
little chance of passage in full, but remember: great decisions begin as
great dissents.Be well. Raise hell.
Andrew
Barbano is a Reno-based syndicated columnist and 28-year Nevadan.Barbwire by Barbano
has appeared in the Sparks Tribune since 1988.Reprints of
the UNR financial scandal newsbreaks remain available for the cost
of copying at
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Barbwire by Barbano premiered in the Daily Sparks (Nev.) Tribune on Aug. 12, 1988, and has originated in those parts ever since. Tempus fugit.
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