"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)
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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)
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Standard: Oil giant tries to cheat tribes of money (10/11)
Interior won't seek to recover billions in
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Auditors say DOI
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Editorial: 'Anything goes' at Interior Department
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Interior comes under fire for
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Norton shielded
Griles despite ethics probe (9/15)
House
committee to consider DOI 'irresponsibility' (9/12)
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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
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Bush administration won't give up
fight on Cobell (03/18)
McCain weighs
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Swimmer admits some Navajo appraisals too low
(12/13)
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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)
Opinion
Editorial: Interior's long history of accounting failures
Tuesday, December 12, 2006
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