Heat olive oil in heavy medium pot over medium heat. Add 2 tablespoons garlic and saute 1 minute. Add tomatoes with their juices, whole onion, basil and 1 tablespoon oregano to pot. Reduce heat to medium-low and simmer sauce until reduced to 1 3/4 cups, about 1 hour. Remove onion and discard. Season sauce to taste with salt and pepper. Set aside. Melt butter in heavy large pot over medium-high heat. Add parsley, bay leaf, crushed red pepper, remaining 1 tablespoon garlic and 2 tablespoons oregano. Saute until garlic is tender, about 1 minute. Stir in Sherry and tomato sauce. Add mussels and stir to coat. Cover and simmer until mussels open, about 5 minutes; discard any mussels that do not open. Using tongs, transfer mussels to large serving bowl. Season sauce to taste with salt and pepper. Ladle sauce over mussels and serve.