Tomorrow's hearing on oil and gas royalty management in the Senate Energy and Natural Resources Committee looks like it is going to be a doozy. The top item on the agenda will undoubtedly be culling through the findings of a long-awaited Department of Interior Inspector General (IG) report on controversial 1998-99 federal offshore leases which mistakenly failed to require drilling payments from big oil companies. The New York Times reports today that a few top Department officials may have misled Congress or investigators about this major snafu:
The [IG] report contradicts statements by the official, Johnnie M. Burton, the director of the department's Minerals Management Service, who told a House hearing last September that she first learned about the royalties problem in January 2006.
Confronted by e-mail messages from subordinates from early 2004, the report said, Ms. Burton conceded that she probably had been told earlier, but "did not remember putting a great deal of thought into the matter."
Investigators calculated that the government could have collected an additional $865 million in the last three years alone if officials had told companies drilling in the Gulf of Mexico that they owed all the royalties required on oil and coal extracted from federal waters.
EGADS. Burton claims she did not to put a "great deal of thought" into a situation which has allowed the nation's wealthiest oil companies to pocket an estimated $865 million dollars (UPDATE: and potentially up to tens of billions of dollars over the next 25 years) owed the U.S. taxpayer? Would someone please fire her already? Our only regret in seeing Burton go would be the knowledge that her henchmen in waiting at the Minerals Management Service are no better. Top managers under Burton have attempted to silence and intimidate a steady stream of auditors raising concerns about ripoffs by Big Oil. Yesterday, one of those auditors, Bobby Maxwell, finally had his day in court. Maxwell is the first of four auditors who filed False Claims Act whistleblower lawsuits after bosses at MMS told them not to collect on their audit and compliance findings. As if that wasn't enough bad news, the Minerals Management Service is also suffering under the gloomy cloud of a Justice Department criminal investigation, perhaps the signature program of this Administration's reign.
-- Beth Daley
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