PAC claims Klein's amendment would allow price gouging

A political action committee entered the fray between U.S. Rep. Ron Klein, D-Boca Raton, and his Republican challenger Allen West. The "We Love USA" PAC is not in love with Klein -- the group's website features an image of Klein dangling from puppet strings being directed by House Speaker Nancy Pelosi. The entrance of a PAC isn't surprising in this big-money District 22 battleground in South Florida.

When we first spotted the website on Sept. 24, 2010, it had a video posted called "Klein passing gas." A few days later we found the same video on YouTube though the date was June 18, 2008 -- during Klein's previous re-election bid when he also faced West.

The 1-minute, 16-second video focuses on gasoline prices. Near the start, text on the screen states, "While the prices at the pump are skyrocketing, Ron Klein speaks strong..." The video shows an undated clip of him apparently speaking on the House floor about giving the Federal Trade Commission "the authority to crack down on the people who price gouge." Then the text says "But Klein lies! ... Ron Klein sponsored an amendment that specifically allows price gouging."

We wanted to know, did Klein sponsor an amendment related to gas prices that "specifically allows price gouging"? In South Florida, with limited public transportation options, residents rely heavily on cars -- so gas prices matter to many voters. And in a region prone to gas shortages caused by hurricanes, we're sensitive to the issue of gouging.

The video mixes narration, text and photos. The images show a gas station with prices as high as $5.199 a gallon and a blurry image of Klein in front of another station. The text cites an amendment to H.R. 3355 offered by Klein on Nov. 8, 2007, and claims it was "to modify the instruction prohibiting price gouging by replacing it with language discouraging price gouging, thereby legalizing price gouging."

It continues: "Middle-class families and their increasingly tight budgets need relief. Not more lies and broken promises. Floridians are paying twice as much at the gas pump as when Ron Klein came to office in 2006... Every time we pump gas into our car or truck, we should remember that Ron Klein allows price gouging!" In the background, Gwen Stefani's sultry voice can be heard singing the hit single "Don't Speak" by No Doubt.

First, some background -- and we could find little -- about We Love USA.

The group's website states that the PAC was set up on Sept. 23, 2010, and that "Our core mission is simple; showing the voters how the candidates have voted during the Obama administration. Those in Congress who voted with Pelosi on every single important bill are trying to hide their record thru negative attacks and denial of their near unanimous voting with her. We will do our best to not let the voters forget where these politicians stand on the issues."

FEC reports show that the PAC filed paperwork with the Federal Election Commission Sept. 21 and lists Nancy Watkins, of the accounting firm Robert Watkins and Company in Tampa, as the treasurer. The PAC filed an FEC report Sept. 28 showing it had spent $62,652 on advertising.

In an interview with the Miami Herald editorial board Sept. 27, both West and Klein said that they had nothing to do with the PAC. The PAC responded to e-mails about the gas video but not about the PAC itself. Nor did anyone return phone calls.

About three hours after our first e-mail Sept. 27 asking about the gas video, the PAC responded that it had taken down the video.

"Thank you for bringing to our attention that we should provide links to fact check our videos and statements we place on this website,'' said the e-mail signed "Media Relations." "We have pulled the video 'Ron Klein Pass Gas' as it stated that Ron Klein came to office in 2006. In 2006, Ron Klein became Congressman-Elect, and officially took office in January 2007. Because of this oversight, we have decided to take the video off of the website."

But the PAC still stood behind the claim about price gouging, and Mark Laffler of We Love USA e-mailed us the amendments cited in the ad.

Let's look at H.R. 3355. The bill, sponsored by Klein in 2007, was called the "Homeowners Defense Act of 2007." The bill was to provide federal support for state-sponsored insurance programs to help homeowners facing natural catastrophes such as hurricanes. On Nov. 8, 2007, U.S. Rep. Ginny Brown-Waite, a Republican who represents west-central Florida, introduced an amendment to "prohibit price gouging in any disaster area located within the State."

The amendment defines price gouging as: "providing of any consumer good or service by a supplier related to repair or restoration of property damaged from a catastrophe for a price that the supplier knows or has reason to know is greater, by at least the percentage set forth in a State law or regulation prohibiting such act (not withstanding any real cost increase due to any attendant business risk and other reasonable expenses that result from the major catastrophe involved), than the price charged by the supplier for such consumer good or service immediately before the disaster."

Klein responded with his own amendment to strike "prohibit" and insert "discourage." He wanted to soften that price-gouging language because he didn't want to set up a barrier to many states joining the national disaster consortium.

The overall bill passed the House, 258-155, on Nov. 8, 2007, but stalled in the Senate. The Homeowners Defense Act of 2010, H.R. 2555, sponsored by Klein is pending.

That doesn’t make Klein soft on gasoline price gouging though. We found three laws he voted for that were specifically aimed at prohibiting gas price gouging or limiting gas prices:

• Klein was one of 125 co-sponsors and voted for the "Federal Price Gouging Prevention Act" H.R. 1252 in 2007. It would have made it illegal during an emergency to sell gas at an excessive price. That bill stalled in a Senate committee. A related bill, H.R. 6346 the Federal Price Gouging Prevention Act in 2008, failed to become law though Klein did vote for it.

• Klein voted for the Gas Price Relief for Consumers Act of 2008 H.R. 6074, which would have made it illegal for foreign states to act together to limit the production of gas or set the price. The related Senate bill S. 879 had hearings but no vote.

• Klein voted for the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008 H.R. 6022. It passed and "directs the Secretary of the Interior to suspend petroleum acquisition for the Strategic Petroleum Reserve through the royalty-in-kind program" through the end of 2008. Pelosi called for the move to bring down gas prices. This bill was signed into law by President George W. Bush on May 19, 2008.

We also wanted to check the ad's claim that gas prices doubled during Klein's tenure in Congress. The PAC, in an e-mail, wrote that the price of gas doubled in 2008 and sent us a link to GasBuddy for historical gas prices in Miami -- which is outside of Klein's Congressional district.

We contacted AAA and asked for gas prices for January 2006, January 2007 and the most recent month available in 2010 for Fort Lauderdale -- part of the city lies within the district. AAA’s chart showed a gallon of unleaded gas cost $2.3855 in January 2006, $2.3074 in January 2007, and $2.7175 in September 2010. AAA figures show the average price rose to more than $4 in 2008 in Fort Lauderdale, though the peak was still more than 50 cents short of doubling from the start of Klein’s term.

Let's review: the We Love USA PAC had a video on its website that stated "Klein sponsored an amendment that specifically allows price gouging." Klein's amendment was to change the wording from "prohibit" price gouging to "discourage." The PAC interprets "discourage" to mean "specifically allows," which is a stretch. Further, the video suggests to the viewer that the amendment was about gas prices -- but the bill was about homeowners insurance and property damage. We rate this claim False.

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