30 March 2007 at 8:44:14 AM
US Interior Department is preventing recovery of oil and gas fees from companies that drill on FEDERAL land and FEDERAL waters. We're talking about underpayments, here, where the Interior Department allowed O&G to make *guesstimates*, based on their own *honor* system.
A. David Lester, the executive director of a group that represents Indian tribes with oil and gas reserves, said that the Interior Department's enforcement efforts amounted to an "honor system" for oil and gas producers that "unfailingly results in underpayment" to the tribes.
And that isn't the only scam the Interior Department is being investigated for, currently (Reminder also that Steven Griles lied to Congress about all this and was caught last week).
The Interior Department is under fire for other problems in the royalty program as well. It is struggling without much success to correct leasing mistakes that could allow oil companies to escape $10 billion in royalties over the next decade or so.
The Justice Department is investigating evidence of corruption in the fast-growing "royalty-in-kind" program, under which the government collects about $4 billion a year in royalties in the form of oil and gas rather than cash.
The investigation focuses on evidence that the program's manager and several other employees had consulting deals with companies that were bidding to market the royalty oil and gas for the government or had romantic ties to company executives.
Maxwell told lawmakers that Interior officials had instructed him and other auditors not to audit companies that pay in-kind royalties.
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