Big Fire Law and Policy Group
Advertise:   ads@blueearthmarketing.com   712.224.5420

Opinion
Editorial: Interior's long history of accounting failures


"The American treasury is already short more than a billion dollars because of the Interior Department�s failure over the last decade to collect all the royalties owed from oil and gas producers in the Gulf of Mexico. The new Congress needs to fix the problem, or persuade a sluggish Bush administration to do so.

The problems are twofold. The first is a loophole in leases signed by the Clinton administration in 1998 and 1999 to encourage deep-water exploration at a time when oil and gas prices were relatively low.

The more serious problem involves royalty enforcement and collection, which is the responsibility of the department�s Minerals Management Service. Whistleblowers have testified to the service�s shortcomings, and last week, the Interior Department�s inspector general said that the service relied too heavily on statements by oil companies, instead of independent audits that would give a more accurate account of production and royalties owed.

Officials say they are trying hard to renegotiate the flawed leases. As for the broader management failures, they have hired new people and begun an internal review. This is all to the good, but the Interior Department has a long history of accounting failures and a more recent history of giving the oil and gas industry much of what it wants on public lands. When Congress summons Secretary Dirk Kempthorne to testify, it will want more than promises."

Get the Story:
Editorial: Royalty Rip-Off (The New York Times 12/12)
pwnyt

Inspector General Report:
Minerals Management Service's Compliance Review Process (December 2006)

GAO Letter:
Suggested Areas for Oversight for the 110th Congress (November 17, 2006)

Inspector General Testimony:
Devaney Interior Department: A Culture of Managerial Irresponsibility and Lack of Accountability? (September 2006)

Inspector General Report:
Allegations Concerning Senior Officials of the Office of Special Trustee for American Indians (May 2005)

Relevant Links:
Government Accountability Office:
Office of Special Trustee - http://www.ost.doi.gov

Related Stories:
Investigation finds major problems with royalties (12/7)
Fired DOI auditor recovered tribal royalties (12/4)
More oversight of oil and gas royalties sought (11/29)
GAO to investigate royalty collection at DOI (11/02)
DOI drops claim to millions in royalties from Chevron (10/31)
New Standard: Oil giant tries to cheat tribes of money (10/11)
Interior won't seek to recover billions in royalties (9/22)
Auditors say DOI suppressed royalty collection (9/21)
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)
DOI allows underpayment of natural gas royalties (01/24)
Editorial: Interior's endless charade on Indian trust (06/10)
OST fares no better under Ross Swimmer's leadership (6/7)
Bush administration won't give up fight on Cobell (03/18)
McCain weighs GAO probe of Indian trust debacle (03/10)
Norton won't testify on trust fund retaliation (2/28)
Lamberth takes action on Cobell trust lawsuit (2/24)
Bush official won't accept claims of trust mismanagement (02/17)
Swimmer admits some Navajo appraisals too low (12/13)
DOI was warned on appraisals of Navajo lands (12/6)
Lamberth critical of Norton's 'bad faith' on trust fund (10/25)
Interior denies attempt to halt trust fund payments (10/05)
Bush administration challenges trust fund ruling (09/16)
Appeals court takes on Cobell trust fund case (9/15)
Bush administration calls for end to Cobell case (04/09)
Trust fund special master alleges government fraud (04/07)
Cobell trust fund suit mediators announced (4/6)
Navajo landowners question BIA agreement with company (10/21)
Retaliation alleged in firing of trust fund manager (09/18)
Court report finds undervaluation of Navajo lands (08/21)
Navajo trust fund manager targeted in internal probe (07/15)
DOI employees falsified Navajo trust data (06/11)
Navajo leaders criticize upheaval at trust fund office (05/09)