Judge throws out royalty underpayment verdict

Thursday, April 5, 2007  

A federal judge in Colorado has overturned a jury verdict in a controversial royalty underpayment case.

Bobby L. Maxwell, a former auditor at the Minerals Management Service, alleged that Kerr-McGee Corporation cheated the government out of millions of dollars in oil and gas royalties. He said Interior Department officials refused to go after the company so he brought the suit under the False Claims Act.

A jury agreed with Maxwell and said Kerr-McGee owed about $7.5 million in royalties. The amount could have been tripled to more than $30 million under the False Claims Act.

But the judge threw out the verdict, saying Maxwell lacked standing and failed to follow the procedures of the False Claims Act.

Maxwell recently testified before the House Natural Resources Committee and said he was blocked from recovering royalties on federal and Indian lands.

Get the Story:
Verdict Backing Oil-Royalty Whistle-Blower Is Overturned (The New York Times 4/3)
pwnyt
Oil whistle-blower's suit dismissed (The Denver Post 4/3)

House Natural Resources Committee Hearing:
Full Committee Oversight Hearing: “Royalties at Risk” (March 28, 2007)

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

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