Mr. BARRETT. Mr. Nassikas, do you know how many cases in the last 5 years have been filed?

Mr. NASSIKAS. I don't think that there are any actual cases of injunc tive relief in the record of the Commission.

Mr. BARRETT. The Commission has not sued as a party plaintiff to seek an injunctive action?

Mr. NASSIKAS. I don't believe so but I would like to answer that subject to check. My recollection may be mistaken.

Mr. BARRETT. Mr. Journey, has the Commissioner sued, to your knowledge, as a party plaintiff in an injunctive action to compel a jurisdictional company to comply with some requirement of the Natural Gas Act?

Mr. JOURNEY. I don't think we have brought an enforcement action under 314 of the act or 20(A). We have been the party movant in Federal district court cases.

Mr. BARRETT. My question is whether you have sought injunctive power or injunctive relief, and the answer is "No"?

Mr. JOURNEY. In terms of enforcing FPC orders, subject to check I will say "No." But, may I respond

Mr. BARRETT. I ask you this question in January

Mr. Moss. If there is no objection, we will hold the record so that you may correct that if you find subsequently that you are in error in the response that was given.

Mr. JOURNEY. Thank you.

Mr. BARRETT. The response at this point is that you know of none? Mr. JOURNEY. That is right.

Mr. BARRETT. The injunctive policy of the Federal Power Commission and the injunctive power of the Securities and Exchange Commission are identical, are they not?

Mr. NASSIKAS. I am not sure of that. There is quite a learned memorandum that I have from our Office of General Counsel. It is rather long, and I am not quite sure of the answer.

There are similarities. Whether they are identical or not, I don't know.

Mr. BARRETT. Section 20 (A) and section 20 (B)?

Mr. NASSIKAS. In answer to your question, I think a realistic answer cannot reside on whether the isolated powers may be identical but, rather, under what circumstances are the powers exercised, what are the violations that are specified in the SEC act and what are the violation specified in ours?

What is the purpose of the SEC compared to the FPC? From these questions we have a basis for determining whether or not we have appropriately exercised our powers or not.

Mr. BARRETT. How many injunctive actions did SEC file last year? Mr. NASSIKAS. This was documented, I believe, by Mr. Journey or his staff.

There were quite a number by the SEC.

We have the 1972 Attorney General's report.

For last year, I don't have your answer.

I have the 1972 Attorney General's report.

Mr. BARRETT. Last year, the number was about 200.

How many in 1972?

Mr. NASSIKAS. In 1971-I am sorry.

The Security and Exchange Commission had 825 pending investigations of alleged violations. It instituted 189 administrative proceedings, tried 140 civil injunctive actions, referred 27 criminal cases to the Department of Justice, and 16 criminal indictments were returned. Then, of course, as the SEC's portion of the AG's report states, that the "Commission gives priority to cases in which organized criminal elements appear to be involved." That is one of the purposes of their

statutes.

So, they are carrying out their statutory responsibility.

Mr. BARRETT. They had 140 injunctive actions, 189 administrative proceedings, and 27 criminal references?

Mr. NASSIKAS. I will accept your figures, Mr. Barrett.

Mr. BARRETT. Those are the figures you just read to me.

Mr. NASSIKAS. Right.

You are repeating the figures I just read.

Mr. Moss. At this time, the committee will stand in recess, to resume sitting at 2 o'clock in this room.

[Whereupon, at 12:15 p.m., the subcommittee recessed, to reconvene at 2 p.m., the same day.]

AFTER RECESS

[The subcommittee reconvened at 2 p.m., Hon. John E. Moss, chairman, presiding.]

Mr. Moss. The committee will be in order.

We have Commissioner Smith with us now.

Do you solemnly swear that the testimony you are about to give to this subcommittee shall be the truth, the whole truth and nothing but the truth so help you God?

Mr. SMITH. I do.

Mr. Moss. Will you identify yourself for the record.

Mr. SMITH. My name is Don S. Smith, Commissioner of the Federal Power Commission.

Mr. Moss. Do you have a statement at this time, Mr. Smith?

Mr. SMITH. Mr. Chairman, I would make a brief statement in response to the questions Mr. Barrett was asking this morning. I was a State Securities Commissioner for almost 2 years. This was in the time of the hot issue market and also at the end of the insurance stock promotion situation in the South and Southwest. In enforcing that type of law which has basically no fraud and fair representation objectives, I issued innumerable subpenas and measured thereby to a large extent the effective performance of those responsibilities of enforcement action.

I initiated prosecutions that were successful and in the course of that work I had occasion in several instances to work cooperatively with the Securities and Exchange Commission in developing some very complex cases. I am familiar with the procedures that the Securities and Exchange Commission uses on the basis of that work and from time to time we had enforcement seminars to help develop our competence in that area. My next job was as a State public service commissioner in the utility regulations field, which lasted for 51⁄2 years. We did not make a criminal case in that time period. Although my memory could fail me, we could quite possibly have issued a subpena, but I can't recall offhand. The reason for that, I believe, was the authority that the

commissioner has in FPC over rates. The tacit coercive effect of the ability to set somebody's rates generally results in a fairly cooperative attitude on their part. Consequently, when you compare the enforcement statistics of the Federal Power Commission and the Securities and Exchange Commission, you can conclusively establish that we are not the Securities and Exchange Commission. I think their investigative practices and certainly their criminal case development is infinitely better than ours.

I think the best way to compare how we enforce what we try to do is in the number of times people try to enjoin us. I have had experience with that, Mr. Chairman. For example, today we were enjoined, a temporary restraining order was issued in the 5th circuit to stay the effect of an order last Friday. The order required that abandonment authority be secured before gas was shifted from the interstate market to the intrastate market. There was probably some $300 million a year at stake if we would lose that case. That is how we attempt to enforce what we are supposed to be doing and not traditionally through the criminal investigation thing.

I will conclude with that assertion. It may be that we are changing from a day when we could accomplish what we thought needed to be done on the basis of the producers desire to sell gas in interstate commerce at a given rate. It may be that in some instances with the price differential between interstate and intrastate at the degree that it presently is that we must look at developing expertise in another type of enforcement. The work of this committee, I think, certainly points to that and I expect we will be trying to improve our performance considerably over what has been the case in the past.

Mr. Moss. I thank you. Of course, as you probably know, I have worked very closely in the securities field also, having chaired Commerce and Finance and written the security investigative protective insurance corporation legislation, the rewrite of the Investment Company Act and the recently enacted major revision of the Securities and Exchange Act. Of course, I recall that the first hearings I participated in with the Federal Power Commission occurred in 1958, some 15 or 16 years ago. I do recognize various differences in different regulatory agencies.

Recently also we wrote the Federal Trade Commission Act. So I have a background that lends itself to the careful evaluation of the respective roles of the various regulatory commissions. We will be very happy to explore those with you as we move along.

Mr. Barrett.

Mr. BARRETT. I made a note, commissioner, as you were testifying. You said that you believed that tacit coercive ability to set rates eliminates the need for a subpena.

Mr. SMITH. In many instances the need for additional information more than the particular filing disclosed arises in a proceeding. The end result of that proceeding for the moving party is the establishment of the rate they want.

Frequently, in the course of such a hearing the staff will say we cannot evaluate the particular case until more information is forthcoming. My general impression is that it is certainly in the interest of whoever wants the rate set to provide that information as quickly as possible.

Mr. BARRETT. In 699 the Commission asked the AGA for certain data and the AGA did not supply this. Isn't that correct?

Mr. SMITH. They made a statement which was, as I recall, short of being entirely satisfactory.

Mr. BARRETT. And the Commission did not subpena the data.

Mr. SMITH. What the Commission did was assume that the disparity that had been developed in fact existed since the burden was on them to support that particular information.

Mr. BARRETT. Isn't the point, though, that the coercive rate setting ability still did not get you the information?

Mr. SMITH. I would have to say yes.

Mr. BARRETT. Thank you.

Chairman Nassikas, let us go on to the Transco case.

Mr. NASSIKAS. Mr. Chairman, could I just supplement what Commissioner Smith said about the case he referred to. I have an order here of the U.S. Circuit Court in the Fifth Circuit which ordered:

The petitioner's motion for a stay on FPC order issued July 11, Opinion 737, is granted until 5:00 p.m. Friday, July 18, 1975 in order that the panel can have an opportunity to consider the motion papers.

Today we have our solicitor going into the U.S. District Court, here, in the District of Columbia, to try to supercede this order of the other court and to oppose issuance of a temporary restraining order. We believe that there was no jurisdiction on the part of the 5th circuit court to do so. Why all this fuss about a little order of the Commission? Well, it is not a very little order to start with. We are talking about approximately 43,000 thousand cubic feet a day of production from Texas that would go to El Paso. We ruled that this production on expiration of 50-year leases must continue to go to El Paso until we grant abandonment authority. The difference would be that if we do not prevail, the Texas intrastate market will then pick up all this gas and El Paso's system will be that much short of delivering gas to California consumers.

Mr. BARRETT. Thank you.

During the FPC's Transco proceeding, Transco officials stated the extent of its curtailment during the 1974-75 winter season was due in part to the failure of new gas supply of 17,000 thousand cubic feet daily. The delay was due allegedly to failure to complete the fabrication of a production platform. The Federal Power Commission invited Mitchell Energy Corp., the operator, to furnish a witness to explain the reason for the delays. The invitation was declined. Then the administrative law judge issued a subpena duces tecum calling for George Mitchell, the chief executive officer, to appear and bring with him all records relating to the delay. Mitchell Energy filed a motion then to quash and in the event it was denied to substitute a vice president, Sydney Walker, who was knowledgeable about the delays. The motion was denied. Mr. Walker appeared and testified in an FPC proceeding on March 18, 1975.

Are you aware that when Mr. Walker appeared in the Federal Power proceeding he brought no document with him in response to the FPC subpena and he repeatedly testified to the fact there were no documents in the company's files relating to delays?

Mr. NASSIKAS. I am now aware of it, having had the record of Mr. Walker's testimony before this committee brought to my attention.