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Two Iraqi election officials facing corruption charges said Sunday they have been released on bail after a three-day detention that they said was designed to pressure the independent electoral body.

The detention of the two election officials has fueled concerns that Prime Minister Nouri al-Maliki is seeking to consolidate power and bring independent officials and government bodies under his control.

The officials, Faraj al-Haidari and Karim al-Tamimi, were detained Thursday after a decision to reinvestigate old corruption charges against the commission. Both officials vehemently denied the allegations, and described their detentions as an attempt to pressure the panel. A spokesman for al-Maliki has denied any government pressure, saying the issue is with the courts.

Al-Haidari, who heads the electoral commission, said by phone that he and al-Tamimi were released Sunday. He said the judge who released them found that the two did not violate the law but said it was not clear whether the case will continue or not. Both paid 15 million Iraqi dinars (about $12,500) in bail.

Al-Tamimi confirmed that he had also been set free. He spoke to The Associated Press by phone from his house.

“Right now, I am with my family. I will continue my work in IHEC in order to serve my country,” he vowed.

The charges against the two officials relate to payments given to employees of the government real estate registration department for plots of land given to IHEC board members. The officials said they acted completely within the law in making the payments, and earlier charges were dropped.

Although corruption is a serious and widespread problem in Iraq, such investigations have also been used as way to pressure officials.

The election commission, which carries out voting and tallies the results, is one of the country’s more powerful institutions, and the detained officials are two of its more prominent members free business cards.

The nine-member board is drawn from Iraq’s various ethnic and sectarian factions.

The panel found itself in the middle of Iraq’s most heated political debate in years after the recent parliamentary election in 2010. A Sunni-backed bloc narrowly won the most seats in the election. Although it was not enough to secure a majority, its strong showing was a surprise in the Shiite-dominated country.

As political factions scrambled to assemble support for a governing coalition, supporters of al-Maliki demanded recounts and complained the vote was plagued with fraud.

International observers called the vote and ballot count fair, and after a torturous recount also supervised by IHEC, the original results were widely found to be accurate.

Haidari said the detention is retribution for the men’s work on the last elections.

Al-Maliki eventually kept his job after managing to form a broader Shiite coalition.

Also on Sunday, three separate attacks killed five people across the country.

In the northern city of Kirkuk, security official Hallow Najat said an explosion near the city’s university killed one and wounded 15. A roadside bomb in Hawija in northern Iraq hit a car carrying the leader of an anti-al-Qaida militia, killing his son, said Brig. Gen. Sarhat Qadir.

In the northern suburbs of Baghdad, gunmen blew up a Shiite family’s house in the Sunni-dominated Taji area, killing three and wounding two others, police and health officials said on condition of anonymity.

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Associated Press writers Sameer N. Yacoub and Sinan Salaheddin contributed to this report

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Fears about Europe’s debt crisis ended a rally in Europe on Thursday, pushing most share prices down as Italy’s borrowing costs rose in a debt sale.

At an Italian bond auction, the yield, or interest rate, for three-year bonds rose sharply _ an indication that investors are nervous about the country’s ability to manage its debt. Spain’s yields have also been rising in recent days.

Both countries are struggling to reduce their deficits and debts while also trying to stimulate stagnant growth. Some analysts and investors fear they’ll need help from their European peers to keep their borrowing costs in line.

A suggestion from a member of the European Central Bank’s board Wednesday that the bank might be willing to buy more Spanish bonds helped ease fears for a bit. Coupled with that, U.S. data indicating the world’s largest economy is growing slowly but steadily helped European stocks open up on Thursday.

“The relief (that the ECB might act) could be felt more globally, but it was limited in scope indicating that we remain in a roller coaster and are not at the end of it yet,” said Sebastian Galy, an analyst with Societe Generale.

Sure enough, later in the day, the disappointing Italian bond auction put Europe’s debt crisis front and center again, and most stocks fell.

France’s CAC-40 lost 0.6 percent to 3,220, while the FTSE in Britain moved down 0.2 percent at 5,626. Only Germany’s DAX managed to eke out gains, rising 0.2 percent to 6,688.

The euro was largely even, trading 0.1 percent higher to $1.3138.

Stock markets have swung between dives and rallies in recent days as investors try to gauge how strongly the U.S. economy is recovering, how seriously Italy and Spain are struggling and how much China is slowing down quick guaranteed personal loans.

On Wednesday, a U.S. Federal Reserve survey of business conditions suggested that last month’s pullback in hiring may be only temporary. The anecdotal survey found steady growth and stable hiring throughout most of the country.

That may be giving a boost to Wall Street, which looked set to open slightly up. Dow futures rose 0.3 percent to 12,779, while S&P futures were up the same rate at 1,369.

Meanwhile, news reports that Shenzhen, a prosperous exporting region bordering Hong Kong, is planning new measures to boost its economy, helped Asian stocks earlier in the day.

Mainland Chinese shares advanced strongly late in the day, with the benchmark Shanghai Composite Index gaining 1.8 percent to close at 2,350.86. The smaller Shenzhen Composite Index added 1.9 percent to 945.33.

Elsewhere in Asia, Tokyo’s Nikkei 225 advanced 0.7 percent to close at 9,524.79. Hong Kong’s Hang Seng rose 0.9 percent to 20,327.32.

Seoul’s Kospi dropped 0.9 percent to 1,976.14, with investor sentiment damped by North Korea’s preparations to launch a long-range rocket in defiance of international warnings.

There remain concerns that high energy prices _ driven in part by unrest in the Middle East _ could weigh on any economic recovery. Benchmark oil continued its climb Thursday, rising 33 cents to $103.03 in electronic trading on the New York Mercantile Exchange. The contract rose by $1.68 to finish at $102.70 on Wednesday.

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HAZELWOOD • The company that wants to build hybrid electric delivery vans here says its plans are rolling forward, but a crucial piece of its financing appears to be stalled.

Emerald Automotive’s plans to build a new $160 million auto plant in Hazelwood – and an estimated 1,000 jobs it would create in the region – hinge largely on its application for a $120 million federal loan from a U.S. Department of Energy program designed to spur green auto manufacturing. Yet that loan program hasn’t issued a loan that size in nearly two years and appears to be mired in election year politics that have analysts skeptical that any loans will be approved any time soon.

Emerald says it remains confident. But in recent weeks, other green car-makers have thrown up their hands in frustration with the Advanced Technology Vehicle Manufacturing Program, a $25 billion loan fund that has two-thirds of its money still in the bank.

Last month, Chrysler withdrew a $3.5 billion loan application after negotiating for three years with the Department of Energy. Bright Automotive recently shut its doors after failing to reach a deal on a $450 million package. Last week, diesel-police-car maker Carbon Motors was turned down for a $310 million loan. All three criticized federal officials for repeatedly changing loan terms and dragging out the process.

“We are outraged by the actions of the (Energy Department),” Carbon wrote in a statement. “It is clear that this was a political decision in a highly charged, election-year environment.”

Emerald filed its application for a $120 million ATVM loan last April and said it continues to talk frequently with the energy department. It’s still in a preliminary phase of the process, and has been given no timeline on closing a loan, but says it hopes to do so this year.

“Our experience has been nothing but positive,” said Gary Marble, Emerald’s communications director. “So far, everything seems to be going forward in a very positive manner. That’s all we can go on.”

The company, which recently began testing two prototypes of its lightweight, low-emission delivery van, continues to try and raise private financing, too. For now it is funding operations through $7 million in private capital, a $5 million grant from the British government and $5 million in loans issued last year by the city of Hazelwood and the Missouri Technology Corp. It has hired a handful of employees here and has an option to purchase a site for its factory in Hazelwood, said general counsel Sharon Heaton. Emerald hopes to start making the vans – and hire about 600 workers – by 2014, and its plans have been hailed as a sign of revival in the St. Louis auto industry.

But any new plant will almost certainly require closing on the federal loan – and closing those loans is where Emerald’s peers have run into trouble. Of the ATVM fund’s $25 billion, less than $8.5 billion has been loaned out, with just $50 million approved since April 2010. And the energy department has halted payments on its $529 million loan to Fisker Automotive after delays stalled a new plant in Delaware.

The energy department says it remains committed to the ATVM program, but that it also wants to make sure taxpayers aren’t left holding the bag on risky start-ups.

“We would like to see private equity invested in these companies,” Energy Secretary Steven Chu told a Senate hearing on the program Tuesday, according to the Detroit News. “We are very focused on the driving the cost (of electric vehicles) down.”

Industry analysts trace the program’s slowdown to Solyndra LLC. The California solar-panel maker received $535 million from a similar energy department program in 2009, then filed bankruptcy and shut its doors last year, becoming a political firestorm. The controversy set off extra layers of scrutiny on all federal energy loans, said David Hurst, an analyst with Pike Research, an alternative-energy research firm in Colorado.

“The politics of the loan program have gotten pretty complicated,” he said. “I think it’s fairly unlikely that Emerald is going to see $120 million. If I were those guys I’d be scrambling for other funding sources.”

It appears the ATVM program’s focus is changing, said Aaron Bragman, senior auto analyst for forecasting firm IHS Global Insight. It was created in 2007 under President George W. Bush, largely to help existing automakers retool plants to make more fuel-efficient cars. Its two biggest loans – a combined $7.4 billion to Ford Motor Co. and Nissan North America – paid to do just that. But then came loans to smaller – and far riskier – start-ups, which triggered more applications from more start-ups.

“After they decided to do Tesla and Fisker, people said ‘Hey, now it’s a (venture capital) start-up fund,” Bragman said. “But really it’s not.”

Emerald sees it differently. Their T-100, a lightweight vehicle intended for export to Europe, is exactly what the ATVM program is meant to fund, Marble said.

“Emerald Automotive is right in the wheelhouse of what that program was set up for,” he said. “We definitely meet what they say they’re looking for.”

Meanwhile, Emerald is “making real progress” in talks with private investors, said general counsel Sharon Heaton, though nothing is finalized yet. The company is nearing a spring deadline – set in its loan agreements with Hazelwood and the Missouri Technology Corp. – to raise $30 million in private funds. The contract allows that date to be moved if necessary.

Hazelwood, which added a special sales tax to fund its $3 million loan to Emerald, is in regular talks with the automaker and hears good reports, said Economic Development Director David Cox. But at this point, there is not much officials there can do but watch, and wait.

“We’ll all keep our fingers crossed,” he said.

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Oil prices are falling on reports that Britain and the United States will release oil from government-controlled emergency reserves.

News organizations reported Thursday that the two countries will try to knock down oil prices by releasing spare supply on the market. High oil prices have helped push gasoline in the U.S. to the highest price ever for this time of year, $3.82 per gallon. Experts predict the national average could reach as high as $4.25 per gallon by late next month.

The U.S. released oil from its Strategic Petroleum Reserve in August with only limited success. Prices dipped for just a few days.

Benchmark crude gave up $1.28 to $104.25 per barrel in New York while Brent crude dropped by $2.17 to $122.37 per barrel in London.

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The Dow Jones industrial average is at its highest level since 2007 after a day of encouraging signs for the economy: Retail sales were strong, the Federal Reserve was optimistic and most of the nation’s biggest banks got a clean bill of health.

The Dow surged nearly 218 points, its biggest gain of the year. The Nasdaq composite index also reached a milestone, closing above 3,000 for the first time since December 2000.

Stocks started Tuesday higher, and momentum built throughout the day.

The government reported before the market opened that retail sales in February increased the most since September. Shortly after 2 p.m., the Federal Reserve said it expected the unemployment rate to keep falling.

Then, at about 3 p.m., JPMorgan Chase said it was raising its dividend and launching a $15 billion stock buyback program, all with the blessing of the Fed.

The Fed was planning on waiting until Thursday to release the results of its annual “stress tests” on banks, which determine which are healthy enough to raise their dividends. After JPMorgan’s announcement, the Fed released the results early.

The Fed’s action was the latest sign that the U.S. financial system was getting healthier. JPMorgan led the Dow higher, shooting up 7 percent. Other big banks including Bank of America, Goldman Sachs and Wells Fargo also gained 6 percent.

“That’s what really made the day,” said Jeffrey Kleintop, chief market strategist at LPL Financial. Banks were easily the best-performing stocks in the market, gaining almost 4 percent as a group.

The Fed’s test results had some negative outcomes, too. While JPMorgan Chase and 14 other financial institutions passed, four, including Citigroup, failed. Citigroup stock was down 4 percent in after-hours trading following the Fed announcement.

The Dow finished at 13,177.68, its highest close since Dec. 31, 2007. The close put the Dow within 1,000 points of its record, 14,164.53, set less than three months earlier. All 30 stocks in the Dow closed higher, the first time that has happened this year.

The Nasdaq composite index rose 56.22 points, or 1.9 percent, to 3,039.88.

On Dec. 11, 2000, the last time the Nasdaq closed above 3,000, it was in the middle of a horrifying slide _ from a peak above 5,000 in March 2000 to just above 1,100 in October 2002.

At the beginning of 2000, the peak of the dot-com frenzy, investors valued stocks in the Nasdaq composite index at an astronomical 175 times their per-share earnings over the previous year.

Google was not yet a public company, and the iPod didn’t exist. Apple pulled in $2.3 billion in quarterly revenue. Many Nasdaq companies were Internet startups with high stock prices but big losses.

And many of them failed, taking the Nasdaq down with them.

Jack Ablin, chief investment officer at Harris Private Bank, said the key difference between the Nasdaq then and now is that the technology companies that dominate the index only promised profits 12 years ago.

“The Nasdaq hasn’t done much of anything for 12 years, but it’s had a huge rally in earnings,” Ablin said.

Today, the profits are real. Apple reported $46 billion in revenue in its latest quarter. The Nasdaq composite, which includes more than 2,500 companies, trades at about 24 times earnings, according to Birinyi Associates.

The Standard & Poor’s 500 index closed up 24.87 points, or 1.8 percent, at 1,395.96, its highest level since June 5, 2008. The S&P has gained 11 percent since Jan. 1, more than what it posts in an average year. The S&P is a 12 percent rally from its record of 1,565.15.

Brian Gendreau, market strategist at Cetera Financial, said stocks could still go higher. Investors are paying roughly 14 times the past year’s earnings for the S&P 500 index. The long-term average is closer to 15.

“Valuations are still very cheap,” he said.

The dollar rose against the euro and hit an 11-month high against the Japanese yen after the Federal Reserve assessment. The euro fell to $1.3073 late Tuesday from $1.3150 late Monday. The dollar soared to 83.08 yen from 82.26 late Monday.

The retail sales report showed a gain of 1.1 percent last month. Some of it reflected higher gas prices, but Americans also spent more on cars, clothes and appliances. Department stores had their biggest gains in more than a year. The government also revised its estimates higher for December and January.

Retail stores reported a 6.7 percent increase in sales in February compared with the same month a year ago.

A reading of confidence among small business owners also rose in February for the sixth month in a row. The National Federation of Independent Business optimism index reached its highest level in a year, helped by an increase in expected sales.

The rally gained strength in the afternoon when the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling. The Fed also said strains in the global financial markets have eased.

The combination of strong retail sales and the Fed announcement dampened hopes that the Fed would buy more bonds to stimulate the economy, and traders dumped U.S. Treasury debt. The yield on the 10-year Treasury note climbed as high as 2.12 percent, its highest since October.

Among companies making big moves:

_ Great Wolf Resorts jumped 27 percent to $5.13. Apollo Global Management said it has agreed to buy the indoor water park operator for $5 a share.

_ Urban Outfitters dropped 5.3 percent, the worst drop in the S&P 500 index. The retailer reported earnings that fell below what analysts were expecting after it had to mark down prices on women’s clothing at its Anthropologie and Urban Outfitters stores.

_ Carmike Cinemas soared 17 percent. The Georgia-based movie theater chain reported earnings and sales that far outpaced what Wall Street analysts had expected.

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Calm returned to the stock market Wednesday. Stocks rose smoothly a day after their biggest loss this year as reassuring reports on productivity and hiring overshadowed jitters about the Greek debt crisis.

The Dow Jones industrial average rose 78 points, or 0.6 percent, to 12,837 as of 11:20 a.m. Eastern time. The Standard & Poor’s 500 index rose 9, or 0.7 percent, to 1,352. The Nasdaq composite index rose 23, or 0.8 percent, to 2,933.

The Dow dove 203 points on Tuesday, the first hiccup in this year’s strong rally. Many market-watchers believe that stocks had risen too quickly and were due for a setback. Before Tuesday, the Dow had been up more than 6 percent for the year. The Standard & Poor’s 500 had been up 8.5 percent.

The sell-off was brought on by fears about the latest deadline in Greece’s debt crisis. Hedge funds and banks that own Greek government debt have until Thursday night to exchange their bonds for new bonds that are less valuable. If too few are willing, Greece might default, which could rattle the global financial system.

Jerry Webman, chief economist at OppenheimerFunds Inc., said Tuesday’s decline was no surprise after such a strong rally.

“You wouldn’t expect to get it all back in one day,” Webman said of Wednesday’s modest gains. He said the February employment report, due out Friday, will signal whether hiring is brisk enough to offset the economic drag of high gas prices.

“There’s a foot race between gas bills and paychecks,” he said. “If we continue to print new paychecks at the rate we’ve been adding them, that mitigates a lot of the damage of higher gasoline prices.”

Two encouraging signs about the labor market emerged before the market opened. The government said U.S. workers were more efficient late last year, though productivity grew more slowly than in the summer. Productivity measures output per hour worked. As productivity grows more slowly, employers might hire more workers to keep up with demand.

A closely-watched private estimate of hiring also exceeded economists’ expectations. Payroll processor ADP said employers added 216,000 jobs last month. The result lifted hopes about the big February jobs report, due to be released Friday.

Investors who fear that Tuesday’s decline signals the end of the four-month rally might be glad to know that the rally has survived six other 200-point drops in the Dow.

On Nov. 21, the Dow fell 248 points after a congressional committee failed to reach a deal to reduce federal spending. Two days later, it fell 236 points because of worries about the European debt crisis.

Despite those falls, the Dow is still up almost 20 percent since Oct. 3, 2011 and 4.7 percent this year. The S&P 500 index, a broader measure of the market, is up 7.2 percent for the year. Just last week, the Dow closed above 13,000 for the first time since May 2008.

Even before Tuesday, there was a sense among many market watchers that stock buyers may have gotten ahead of themselves. Skeptics argued that stock prices reflected a recovering U.S. economy but downplayed the risk of a European recession and a default in Greece.

Among stocks making big moves:

_ Internet radio company Pandora Media Inc. dove 24 percent after its projected results for the first quarter badly missed analysts’ estimates.

_ Netflix rose 1.5 percent after CEO Reed Hastings recently suggested that the video streaming and DVD-by-mail company form partnerships with cable TV companies to expand its customer base. The company has about 22 million online streaming subscribers in the U.S.

_ American Eagle Outfitters rose 4.9 percent. The teen clothing retailer said it expects profit margins and sales to improve this year. Revenue at stores open at least a year rose 10 percent in the fourth quarter.

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Apple Inc. stoked fears of a market correction Wednesday as its surging stock price drove the Nasdaq to heights not seen since the end of the dot-com era more than a decade ago.

The tech-heavy composite index fell back after breaching 3,000 but remains on track to post its best February in 14 years. The Nasdaq briefly passed the 3,000 milestone a day after the Dow Jones industrial average closed north of 13,000 for the first time since the start of the recession in 2008.

Apple, the Nasdaq

U.S. stocks capped off a solid week on either side of the break even line Friday, as investors hesitated to make big bets ahead of a key vote on a second bailout for Greece.

The Dow Jones industrial average () rose 46 points, or 0.4%, closing at the highest level since May 2008. The S&P 500 () edged up 3 points, or 0.2%, and the Nasdaq () lost 8 points, or 0.3%.

Investors are optimistic that European finance ministers will sign off on Greece’s latest economic reform proposal when they meet Monday. Their approval is needed in order for Greece to receive bailout funds and avoid default on a €14.5 billion bond redemption in March.

But until they receive official word, investors are taking a breather going into the long weekend and Monday’s big meeting.

"From an investor’s perspective, European leaders have over-promised and under-delivered over and over for the past several months," said Michael Sheldon, chief market strategist at RDM Financial Group. "Until we see some signatures on a dotted line, there are still questions about Europe’s ability to contain its issues."

Greek bailout: The pressure is on

Friday’s muted moves came a day after the stocks gained more than 1%, with the Nasdaq closing at a decade high.

All three indexes posted solid gains for the week. The Dow rose 1.2%, while the S&P 500 added 1.4%. The Nasdaq jumped nearly 1.7%.

For the year, the Dow is up almost 6%, and the S&P 500 is up more than 8%. The Nasdaq has made an impressive 13% run.

"All the economic data recently has been pointing to a rebound in economic growth, which has propelled stocks higher," said Sheldon. "But the market might be getting ahead of itself from a sentiment perspective, so it may be due for a pause or a brief pullback."

Europe: Out of ICU but still ill

But as long as economic data continue to come in strong, and Europe continues to work toward a solution for its problems, the market should trend higher in the months ahead, said Sheldon.

Markets will be closed Monday for Presidents Day.

World markets: European stocks finished modestly higher. Britain’s FTSE 100 () added 0.3%, the DAX () in Germany rose 1.4% and France’s CAC 40 () gained 1.3%.

Asian markets ended higher. The Shanghai Composite () edged up slightly, the Hang Seng () in Hong Kong rose 1% and Japan’s Nikkei () popped 1.6%.

Economy: The Consumer Price Index rose 0.2% in January, after holding steady the two months prior. Analysts were expecting a rise of 0.3%.

Core inflation rose 0.2%, compared to estimates for 0.1% uptick.

The Conference Board’s Leading Economic Indicators index ticked up 0.4% in January, a bit less than forecasts for a 0.5% increase.

Companies: Shares of H.J. Heinz (, Fortune 500) moved higher after the company beat earnings estimates, thanks to growth in emerging markets.

Campbell Soup’s (, Fortune 500) stock also edged higher after the company’s second-quarter profit declined but still managed to beat forecasts.

Nordstrom (, Fortune 500) shares were lower after the retailer issued a disappointing profit forecast for the year.

Green Mountain Coffee’s new Vue

Baidu (), China’s top search engine, beat fourth-quarter earnings and sales estimates, but shares edged lower as the company issued a disappointing first-quarter revenue outlook.

Gilead Sciences (, Fortune 500) shares tumbled after the drugmaker said that the majority of patients involved in a hepatitis C treatment experienced a relapse within four weeks of completion.

Shares of Brightcove (), known for its Internet video platform, surged more than 35% in its stock market debut. The company’s shares were priced at $11 in its initial public offering, and soared above $15 on Friday.

McNeil, a Johnson & Johnson (, Fortune 500) company, is recalling more than half a million bottles of Infants’ Tylenol because of consumer complaints about the difficulties of using the dosing system.

Currencies and commodities: The dollar edged lower against the euro and the British pound, but rose versus the Japanese yen.

Oil for March delivery gained 93 cents to settle at nine-month high of $103.24 a barrel.

Gold futures for April delivery fell $2.50 to settle at $1,725.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.01% from 1.99% late Thursday.  

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Fuel distributor Center Oil Co., one of the region’s largest private companies, unwittingly bought more than 1.3 million bogus renewable fuels credits in 2010, according to two lawsuits the company filed last month in St. Louis County Circuit Court.

The credits, worth hundreds of thousands of dollars, are tied to a much larger credit counterfeiting scandal wreaking havoc for biodiesel producers and petroleum companies across the country. The dustup has given new ammunition to critics of the six-year-old federal renewable fuel mandate.

Over the last four months, the federal government has identified two companies that allegedly sold millions of dollars worth of bogus credits. And the owner of one of the companies, Clean Green Fuels LLC of Baltimore, has been charged with selling $9 million of worthless fuel credits and spending the money on exotic sports cars, homes and jewelry.

The fallout from the scandal hasn’t been fully realized. But already it has meant increased scrutiny for biodiesel producers and an expensive headache for more than two dozen companies facing possible fines for buying the worthless credits, even if they did so unknowingly.

The federal Renewable Fuel Standard was approved by Congress in 2005 and expanded two years later to require even larger volumes of biodiesel and ethanol as a way to reduce dependence on foreign oil, cut greenhouse gas emissions and create jobs in rural America.

For 2012, the law requires the use of 15.2 billion gallons of renewable fuel, an amount that will steadily increase to 36 billion gallons by 2022.

Oil refiners and fuel importers can meet obligations either by blending biodiesel and ethanol with petroleum-based or purchasing the credits from producers of the renewable fuels.

The fuel credits, known as renewable identification numbers, or RINs, are 38-digit serial numbers that represent biodiesel and ethanol made in or imported to the United States. For biodiesel, each RIN represents 1.5 gallons.

Center Oil didn’t say in the lawsuits what consequences it might face for purchasing and re-selling the worthless biodiesel credits. The lawsuit doesn’t specify the amount of damages it’s seeking.

Company officials didn’t return a call seeking comment.

Center Oil filed the lawsuits on Jan. 20 and Jan. 24, accusing separate companies of breach of contract and breach of warranty for selling bogus RINs.

The suits claim Center Oil bought 943,000 phony RINs from Miami-based International Exchange Services LLC in April 2010 and 441,000 bogus RINs from OceanConnect LLC, based in White Plains, NY, six months later.

Both of the companies being sued were identified by federal prosecutors as having bought RINs from Clean Green Fuels.

It’s unknown how many companies and brokers unknowingly bought or sold some of the 80 million phony fuel credits so far identified by the EPA. Often, RINs are re-sold multiple times before they’re retired.

But the EPA has already issued notices to two dozen companies, including some of the country’s largest oil companies, warning them that they may have violated federal regulations for submitting worthless biodiesel credits.

Center Oil was not among those companies, and according to its lawsuit, it subsequently re-sold the credits.

Those who work in the biodiesel industry believe RIN fraud is rare. But the issue has nonetheless made oil companies and brokers more careful about whom they buy from.

And that has had the unfortunate effect of making it difficult for lesser-known small producers to sell their credits into a jittery market, said Wayne Lee, a biofuels consultant in Little Rock.

“It’s having a severely negative effect on the smaller producers,” he said payday loans lenders. “The vast majority of biodiesel producers are straight up, honest small plants doing what they’re supposed to be doing. These guys are trying to eke a living out of the ground.”

The National Biodiesel Board, an industry group based in Jefferson City, said it has long been aware for the potential for RIN fraud - a reason it long ago included a link on its home page to anonymously pass on tips about suspect RIN transactions to the EPA.

And at the group’s annual conference last week, it announced plans to form a task force made up of parties from the petroleum industry, biodiesel producers and the EPA to look at ways to strengthen the RIN program.

“There is significant disruption in our market right now because of these cases,” said Ben Evans, a spokesman for the biodiesel group. “We are happy to see the EPA cracking down on any potential fraud because we think it’s going to send a strong signal to the market that if people can’t get away with this type of thing.”

Not everyone is as pleased with how EPA is handling the matter.

Not only is the agency is pursuing companies allegedly selling bogus fuel credits, it also issued notices of violation to two dozen companies last fall, including several of the nation’s largest oil refiners, for using some of the invalid RINs to satisfy the biofuels mandate.

Under the market-based RIN system, EPA is maintaining a “buyer beware” policy for companies that claim they unknowingly purchased worthless fuel credits. That’s true even though both companies accused of generating bogus RINs had been required to register with the agency.

“I think it’s a tragedy that EPA has hid in the shadows on this one,” said Charles Drevna, president of the Washington, D.C.-based American Petrochemical Manufacturers Association, which has long opposed the renewable fuel mandate for a variety of reasons. “They allow con artists to register with them and then they say buyer beware.”

The outcry from oil companies has also captured the attention of some in Congress, including longtime critics of the EPA and the renewable fuels law.

Within the past two months, Republican lawmakers have sent letters to the EPA asking the agency to defend its position. Just this week, Sen. James Inhofe called for a Senate Environment and Public Works Committee hearing on RIN fraud.

The EPA has defended its enforcement actions, saying it long ago worked with producers, refiners and other parties to develop the market-based system for renewable fuel credits. The agency said that system includes are protections built into existing regulations to help prevent fraud, including a requirement for independent verification that fuel producers have appropriate equipment and fuel production capacity.

However, EPA said, buyers must do “due diligence” before buying RINs.

“EPA does not have the capacity to validate or certify the actual production of renewable fuel and associated RINs before RINs are generated,” the agency said in an email response to questions.

Meanwhile, the biofuels industry is trying to focus attention on the fact, in its view, the renewable fuel standard is working. Biodiesel production surpassed 1 billion gallons last year for the first time, helping create more jobs and diversify the nation’s fuel system, said Evans, the biodiesel industry spokesman.

“We don’t want to downplay (problems in the RIN market),” he said. “It’s creating significant disruption in our industry. But let’s not throw the baby out with the bathwater.”

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