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Auditors say DOI suppressed royalty collection
Thursday, September 21, 2006

Current and former auditors for the Interior Department say they were pressured to drop their efforts to recover millions of dollars in oil and gas royalties.

The allegations are contained in recently unsealed lawsuits filed in federal courts in Oklahoma. The auditors say they tried to seek additional money for drilling on public land but were told by higher-level officials not to pursue the work.

In one case, two senior auditors at the Minerals Management Service in Oklahoma City believed Shell Oil had shortchanged the government by $18 million. In another case, a former auditor said Kerr-McGee Corporation owed $12 million in royalties.

The cases were brought under the False Claims Act, a law that was used to recover royalties owed to the Osage Nation. In a statement to The New York Times, Interior criticized the auditors for filing the lawsuits, which entitle them to a portion of any damage awards.

Royalty collection has dropped considerably under the Bush administration. From 1989 through 2001, auditors found an average of $176 million a year was owed by oil and gas companies. From 2002 through 2005, that number dropped to $46 million.

Get the Story:
Suits Say U.S. Impeded Audits for Oil Leases (The New York Times 9/21)
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Relevant Documents::
Devaney Testimony | Hearing Information

Relevant Links:
House Committee on Government Reform - http://reform.house.gov

Related Stories:
Editorial: 'Anything goes' at Interior Department (9/18)
Interior comes under fire for royalty giveaway (9/15)
Norton shielded Griles despite ethics probe (9/15)
House committee to consider DOI 'irresponsibility' (9/12)
MMS reduces role of tribal-state royalty panel (9/12)
DOI accused of hindering probe into oil and gas royalties (08/04)
Accounting firm defends social relations with OST (7/27)
OST contract tied to favors to top officials (7/25)
OST officials awarded $6.6M contract to friends (7/24)
Tribes, states weigh lawsuits against oil companies (5/8)
Norton denies fraud or major problem with trust (3/29)
GAO report warns of billions in lost oil, gas royalties (3/29)
Tribes, states object to Interior's lack of audits (03/01)
Pombo starts investigation of DOI royalty program (2/16)
Bush, Democrats oppose $7B royalty giveaway (2/15)
Interior to give away $7B in oil and gas royalties (2/14)
Oil companies fall behind on royalty payments (2/10)

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