will not bear a sufficient relationship to those persons overcharged to support a finding of restitution.

Finally, I would say that I do not question the merit or desirability of the targets DOE has established for distribution purposes. My point here is only that once we get beyond restitution as now authorized by law and regulation, the distribution of moneys collected by DOE for other purposes must await further statutory

sanction.

Mr. Chairman, that concludes my prepared statement.

Mr. DINGELL. Mr. Socolar, the subcommittee thanks you on this matter, as we always do for the very excellent assistance given by your agency to the committee. We thank you.

Our next witness is Mr. John H. Shenefield.

Mr. Shenefield, we are happy to have you with us this morning.

STATEMENT OF JOHN H. SHENEFIELD

Mr. SHENEFIELD. Thank you, Mr. Chairman.

I have, as you know, submitted a written statement. I don't want to impose on the time of the subcommittee unnecessarily. So, with your permission, I will summarize it informally. [See p. 12.]

Mr. DINGELL. Without objection, your full statement will appear in the record at the appropriate point and we will recognize you for such comments as you wish to make.

Mr. SHENEFIELD. Thank you, sir.

We undertook in the statement to respond to the questions raised in your letter of October 6. If I may, I would like briefly to answer each of the several questions.

First, you inquired into the global settlement entered into by DOE and Getty oil, and in particular into the escrow fund which DOE was to administer. I noted in your opening statement that you relied on DOJ officials for the view that the General Counsel's Office of DOE had sought an opinion from the Office of Legal Counsel only last Friday.

While that may be technically correct, I think it is unfair in the sense that I am aware and have been informed of conversations between the Office of General Counsel and the Office of Legal Counsel that began somewhere around Labor Day, which would not be long after the August 26 direction that you allude to in your statement.

My understanding is that the Office of Legal Counsel is prepared to and will shortly issue an opinion on these matters, and therefore I think we best abide the issuance of that opinion.

Mr. DINGELL. Mr. Shenefield, just for the assistance of the committee then, and to clarify the record, at what point did the Department of Energy request a legal opinion on this matter from the Department of Justice?

Mr. SHENEFIELD. If that is construed to mean by formal request, my understanding is that it did happen last Friday.

Mr. DINGELL. It did happen last Friday by formal request.

Mr. SHENEFIELD. That is my understanding.

Mr. DINGELL. Was there ever any informal request made that your record would indicate?

Mr. SHENEFIELD. I think there are a number of conversations back and forth between personnel of the Office of Legal Counsel

and the Office of General Counsel which would constitute requests for legal discussion and legal support for the several problems that were raised.

Mr. DINGELL. What kind of response from the Department of Justice did that kind of negotiation and discussion back and forth trigger? Does that in all instances trigger a formal opinion by the Department of Justice?

Mr. SHENEFIELD. No, it does not.

Mr. DINGELL. It does not.

Mr. SHENEFIELD. Not a formal opinion. But it may well be incident to the preparation for a formal opinion. I judge, though I didn't participate in the conversations, that that was the kind of conversation that was taking place here.

Mr. DINGELL. Do you folks down there issue a formal opinion, then, in response to informal discussions with other agencies in every instance?

Mr. SHENEFIELD. No, we do not.

Mr. DINGELL. What does it take to trigger the issuance of a formal opinion from the Department of Justice with regard to matters of this sort before other agencies?

Mr. SHENEFIELD. A clear request for such an opinion as to matters precisely defined.

Mr. DINGELL. I see.

Thank you.

[See appendix D of correspondence with the Department of Justice which shows that no formal request for opinion was filed by DOE as of mid-December 1980; p. 655.]

Mr. SHENEFIELD. Now, many of the questions dealt with in the letter of October 6 dealt with our supervision of litigation as to which the United States is party. As you know, we take the view that the Attorney General has plenary authority to supervise litigation and that that proceeds from 28 U.S.C. 516 and 519.

In connection with Department of Energy, we believe that authority to have been confirmed by section 502(c) of the Department of Energy Organization Act. We believe that that authority has been recognized consistently by the courts and that it is well understood.

It is the Attorney General's view, therefore, that absent his concurrence as to the litigation elements of the consent orders, those consent orders would not be effective to dismiss or compromise the litigation.

Those lessons for us are applied with respect to these settlements in the following way.

These settlements obviously purported to resolve an enormous number of different kinds of disputes and problems, including litigation. Initially, the resolution of these different problems was undifferentiated as to litigation and administrative matters.

In our view, that required the exercise, to put it that way, of disentangling those portions of the settlement which were allocable to litigation from others which were allocable to other issues.

That was a difficult and lengthy process, and I agree completely with the implication, indeed the explicit statement in your opening statement, that that process was too long, a fact that I think is accounted for in roughly equal parts by problems that the Depart

ment of Justice had and problems that the Department of Energy had.

In any event, those problems I think have now been reasonably completely solved. I would not see any basis for our being unable, assuming the information that we need is forthcoming-our being unable to complete disposition of the settlements and concurrence in the litigation aspects of those settlements reasonably promptly. You mention in your opening statement that you were interested in our views as to settlements in general. I wanted to make it quite clear that we strongly favor these kinds of settlements, and that the length of time involved in our concurrence in these settlements does not reflect in any way a disposition to be reluctant or negative.

Because these are settlements involving litigation which implicates enormous sums of money, we thought that close scrutiny of the settlements of litigation was called for. We thought that a rationalization of the settlement procedure was required and that it was important to have as clear and as precise as possible in the circumstances, the reasons for decisions made during the course of the settlement process, and to have them available for examination and analysis.

We did not participate in the settlements, and therefore it was necessary in effect to come along afterwards and try to discover what had been in the minds of those who were participating in the settlement discussions.

That is a difficult thing at best, especially when as is the case with Mr. Bloom, he has an enormous number of things to do. In a sense that is water over the dam for him. For us it is still business on the table.

But we did eventually come to the end of the process. As I say, I think we ought to be able to conclude our review of the others reasonably promptly.

You asked about the reservations that we expressed in the course of our approval and concurrence in the settlement. I, of course, underline the obvious when I say that we did not withhold concurrence on the basis of those reservations, but I am able to say that the Attorney General was quite concerned personally that those provisions to which I alluded in the press statement might not be in the public interest.

You will also note that on no occasion did we take a position as to the legality of those provisions.

We made our views known in these instances for two reasons: One, the public interest aspects, on which the Attorney General feels in areas of legal affairs he has the duty to make his views clear, and two, because in connection with confidentiality and recordkeeping, there is a close and direct relationship between those provisions and the obligations and statutory duties that the Attorney General has.

Those were the reasons we undertook to take positions on those precise issues.

You inquired in your opening statement as to our view of the memorandum of understanding. The Department of Justice takes the clear position that memorandums of understanding in appropri

ate cases are useful, constructive, and efficient in the disposition of the public's business.

I view this particular memorandum of understanding as falling within that category. That is not to say that it hasn't been plagued with a number of difficulties. In general, relying on the good will of people on both sides of the memorandum of understanding, the difficulties have been in large part resolved.

There are some systemic problems with any memorandum of understanding that purports to divide responsibility between two Cabinet officials and two departments. That is not unique to memorandums of understanding or to our relationship with the Department of Energy.

I have confidence that so long as people on both sides have good will and the determination to solve the problems, they can be solved.

Speaking for myself and our side, we do have that determination. I am sure there are many other issues, Mr. Chairman, as to which you wish to ask questions. I will do my best to respond, but for now, that is a brief summary of my statement.

[Testimony resumes on p. 18.-.]

[Mr. Shenefield's prepared statement follows:]

Mr. Chairman and members of the Subcommittee:

I appreciate this opportunity to appear before the Subcommittee to present the views of the Department of Justice concerning the matters discussed in the Chairman's letter of October 6, 1980.

Each

We understand the purpose of this hearing to be the examination of several so-called global settlements negotiated by the Department of Energy with major oil companies. of the settlements involves the disposition of litigation by and against the government, as well as resolution of other matters pending at the administrative level. It is, of course, the Attorney General's legal responsibility to supervise the conduct of litigation to which the government is a party, including the compromise of that litigation when appropriate. My testimony today will touch on the legal

bases of that requirement for Justice Department approval of litigation settlements and the exercise of that responsibility in connection with these global settlements.

The first specific area of inquiry in the Chairman's letter of October 6 concerns the global settlement entered into by the Department of Energy and Getty Oil Company. That consent order contained a provision establishing a $25 million escrow fund which the Department of Energy was to administer. The establishment of that fund in the Getty Consent Order was attributed by DOE to the settlement of