Barack Obama
Pablo Martinez Monsivais  /  AP
President Barack Obama speaks at a DNC fundraiser at Nob Hill Masonic Center in San Francisco, Calif., on Wednesday.
updated 4/21/2011 10:31:16 PM ET 2011-04-22T02:31:16

President Barack Obama said Thursday that the Justice Department will try to "root out" cases of fraud or manipulation in oil markets, even as Attorney General Eric Holder suggested a variety of legal reasons may be behind gasoline's surge to $4 a gallon.

"We are going to make sure that no one is taking advantage of the American people for their own short-term gain," Obama said at a town-hall style meeting at a renewable energy plant in Reno, Nev.

The town hall was sandwiched in between Obama's four fundraising events in California on Thursday — one in San Francisco and three in Los Angeles. The president was holding six fundraisers over the course of his three-day West Coast trip, aimed at high-dollar donors and young people, both of whom will be integral to a campaign that could set fundraising records.

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"This is going to just as hard, if not harder, than 2008," he said of his re-election bid during a small fundraiser at Sony Pictures Studios.

Probing traders and speculators
With the 2012 campaign in mind, the White House is anxious to show the public it's taking action to address rising gasoline prices. The national average price for a gallon of regular gasoline was $3.84 on Thursday, about 30 cents higher than a month ago and almost a dollar higher than a year ago.

Obama, decrying such levels as yet another hardship "at a time when things were already pretty tough," said Holder was forming the Financial Fraud Enforcement Working Group.

The task force will focus some of its investigation on "the role of traders and speculators" in the oil-price surge, Obama said, and will include several Cabinet department officials, federal regulators and the National Association of Attorneys General.

In Washington, Holder said he would press ahead with the investigation, even though he did not cite any current evidence of intentional manipulation of oil and gas prices or fraud.

"Based upon our work and research to date, it is evident that there are regional differences in gasoline prices, as well as differences in the statutory and other legal tools at the government's disposal," Holder said in a memo accompanying a statement announcing the task force. "It is also clear that there are lawful reasons for increases in gas prices, given supply and demand."

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"Nonetheless, where consumers are harmed by unlawful conduct that has the effect of increasing gas prices, state and federal authorities will take swift action," Holder said.

He promised to "be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity."

There's not much Obama can do to affect the price of gasoline in short term, something he acknowledged in his remarks. Gas prices have risen steadily as a result of tensions in the Middle East and northern Africa and rising demand from China and other emerging economies.

Given that no evidence has yet surfaced of actual fraud or price manipulation in oil markets, Obama's remarks appeared, at least in part, as more of an attempt to assuage public anger over rising gas prices.

Other presidents have also launched similar inquiries at times of rising oil prices and widespread public suspicions of market manipulation by the oil industry or by speculators.

In an Associated Press-Gfk poll last month, 51 percent of adults said they thought recent increases in gas prices were due to "oil companies that want to boost profits" rather than changes in the global oil market. Nine percent said higher prices stemmed from a combination of both, 37 percent from changes in the market.

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Obama renewed his proposal to end roughly $4 billion annually in various government subsidies to oil and gas companies "at a time when they're making record profits and you're paying near record prices at the pump. It has to stop."

Asked by a member of the audience about prospects for advancements in clean energy, Obama predicted that, with time, prices of now-expensive devices such as electric cars would come down.

"Having a flat-screen TV used to be a big deal," Obama said. But he said now such TVs are commonplace because prices have dropped so much.

While acknowledging he doesn't spend much time these days behind the wheel, Obama said, "I've been in one of these Chevy Volts. This is a nice car. It drives well."

He said when such vehicles become more affordable, "those of you out there driving that 8-mile-a-gallon SUV" should consider a purchase. Otherwise, by buying gasoline that likely came from imported oil, Americans "are putting money in the pockets of people who do not like us at all," he said.

Change 'tougher than expected'
Before the Reno event Thursday, Obama told supporters in San Francisco that he was pressing ahead with his agenda in a difficult political environment and that "change turned out to be a lot tougher than expected."

Obama addressed about 200 people who paid up to $35,800 apiece for the fundraiser at San Francisco's St. Regis Hotel, the first of four for the day.

Protesters at Obama fundraiser: "Free Bradley Manning"

Obama was interrupted by a small group among the paying guests who protested the detention of Bradley Manning, an Army private accused of leaking secret documents to the WikiLeaks website.

"We paid our dues, where's our change?" the protesters sang to the president.

"We'll vote for you in 2012, yes that's true. Look at the Republicans — what else can we do?"

Obama paused while security removed some of the protesters, then joked, "That's a nice song. You guys have much better voices than I do."

Manning, suspected of illegally passing U.S. government secrets to the WikiLeaks while serving as an Army intelligence analyst in Iraq, was transferred this week to an Army prison in Kansas from the Marine brig in Quantico, Virginia, where he has spent the last nine months.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Obama asks: Is gas price-gouging to blame?

  1. Closed captioning of: Obama asks: Is gas price-gouging to blame?

    >>> all of this leads us to david. you heard kristen just say traders, speculators. what role do they play in what we pay per gallon, and what leverage could the president possibly have here?

    >> yeah, a very good question and one that is hard to answer in many ways. we don't know how much they contribute to the rise in the price of oil. there's speculation in oil, as there is in virtually every market. you want speculators because they add their dollars, there's rr more money, hence better prices, so to speak, for the commodity, but they're there, whether you can crack down on them is something that remains to be seen, in part because it's hard to define speculation versus fraud, which the president also brought up.

    >> secondly, all we talk about these days is the economic downturn, how hard it is on so many of the families, so many people watching us every night, yet first quarter profits are in from 2011 , and boy are some people finding a way to make money. apple up 95%. ge up 77%, and jpmorgan chase up 67%. that's a number of $5.6 billion. how does that work?

    >> it means things are working for those corporations. apple, we know, lots of people are buying ipads, ipods, iphones. in the case of the other two, corporation america is dealing with a more normalized environment, the one that deals with the prerecessionary days that saw the huge problems in 2008 and 2009 and parts of 2010 . they're generating a lot of profits. the key point that many people at home need to keep in mind is they're doing that also by having less expenses. the real question is will they start to return to significant robust hiring of american workers? that's the key question because profitability is very strong right now, and it's not clear they need to hire that many people.

    >> we have all seen how they have reduced expenses wroorb.


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