The sex-and-drugs scandal at the Interior Department’s Minerals Management Service didn’t look at first as if it amounted to much: just a bunch of career bureaucrats on the take for peanuts. Meals and drinks and ski trips from oil companies.
But it’s starting to look as if this baby is developing real legs. The career guys were small fry maybe, but take a look at the big fish that McClatchy Newspapers have hooked:
WASHINGTON — Senior Justice Department officials blocked the U.S. attorney in Colorado from supporting a whistleblower’s suit last year, jeopardizing the government’s prospects for recovering as much as $40 million from a major oil company for its alleged underpayment of royalties.
U.S. Attorney Troy Eid said Washington overruled his request to enter the case against the Kerr-McGee Corp. A lawyer for the whistleblower said he was told that decision was made “at the highest levels” of the Justice Department, then run by former Attorney General Alberto Gonzales.…
Meanwhile, former MMS auditors have alleged in some of the 80 lawsuits that high-ranking Interior Department officials blocked them from issuing routine subpoenas seeking company records that could document the fraudulent underpayment of royalties…
Eid told McClatchy that he did not know who in Washington made the decision or why. LaFond said that Christian told him the decision was made “at the highest levels … It was clear that this case had political stuff written all over it…”
Porter and LaFond asserted that last week’s inspector general’s reports reflect “the tip of the iceberg” in the oil-leasing scandal.
Jack Grynberg, the owner of a Colorado petroleum company and a petroleum engineer, said he has identified 68 ways in which companies “steal” natural gas and oil by underreporting the amount pumped. Grynberg has filed more than 70 False Claims Act suits accusing other oil companies of $200 billion in theft, but said the Justice Department intervened in only two.
State officials have voiced concerns, too. In 2003, a year before Maxwell sued Kerr-McGee, a Louisiana official analyzed the company’s sale prices and emailed an MMS agent that that they were “far below” the market. The MMS agent said he was aware of the discrepancy.