Developing New Bush Scandal Helping Big Oil Companies Hide Billions from Government at Taxpayer Expense
A BUZZFLASH NEWS ANALYSIS
Corruption within the Department of Interior may have allowed oil companies to improperly save billions at the expense of the taxpayers. The Department’s Inspector General has already made at least two criminal referals to the FBI and the Justice Department, and Congressional Democrats have launched several investigations and introduced new legislation to fix the problem.
In a nutshell, oil companies leasing federal land to drill for oil are required to pay the government royalties based on a percentage of their sales. But under the Royalty-in-Kind program, the companies can pay in the form of oil and gas instead of cash. The problem is that oil prices have increased more than the value of the oil and gas royalty revenues being recieved, meaning that the oil companies are managing to withhold a growing amount of their profits from Uncle Sam.
As you might guess, Royalty-in-Kind was proposed and remains supported by the oil industry, and Bush implanted officials with deep ties to the oil industry in charge of the agency responsible for enforcing the program, the Minerals Management Service (MMS).
In light of the growing scandal, MMS Director Johnnie Burton has already announced that she will be retiring by the end of May. Burton started an oil exploration business before becoming a staunch Republican politician in Wyoming, where she developed ties with Dick Cheney. Greg Smith became the new head of MMS, but he just announced his own sudden retirement Tuesday.
"It appears this Administration uses retirement like some perverse witness protection program," said Rep. Nick Rahall. "Get them out of the spotlight and off the list of in-the-know folks who could provide damaging evidence. Instead of Watergate's 'follow the money,' the Bush Administration has "follow the retirements.' "
Rep. Rahall is chairman of the House Natural Resources Committee, which held a hearing Wednesday on the Energy Policy Reform and Revitilization Act aimed at eliminating the oil royalty corruption and loopholes, among other things.
Much of the controversy surrounds a mistake inadvertantly created during the Clinton Administration that went unaddressed and not publically acknowledged until 2006. MMS Director Burton claimed at the time that she had only recently discovered the problem, but midlevel officials spotted the mistake in 2000 and the Interior Department’s Inspector General and even top Republicans say she either knew or should have known about the mistake as early as 2004.
The delay allowed oil companies to save more money and prevented the chance for easier lease renegotiations since energy prices were much lower at the time.
But wait, there’s more! A former Interior auditor-turned-whistleblower revealed that he was ordered by senior Washington officials to drop a case against the Kerr-McGee Corporation for cheating the government out of at least $12 million in royalties. A jury found the company guilty of underpayment, though the case remains pending in federal court on appeal.
MMS Director Burton "is a person who apparently never saw an oil and gas royalty payment audit she liked," Rep. Rahall said Wednesday. "Under her reign, the average number of annual audits conducted plummeted from 540 to 144. And left on the wayside were billions of dollars in royalty payments owed to the American people." As MMS Director, Burton was responsible for auditing participating companies.
The Bush Administration (and the oil industry) want the percentage of oil and gas royalties to double by 2009 and continue to insist that the Royalty-in-Kind scheme is simpler and more efficient because it reduces accounting and transaction efforts. But it is this very reduction in reporting through a de facto "honor system" that has allowed oil companies to keep more money while also preventing the Government Accountability Office from being able to evaluate whether the program is actually profitable to the government.
"The fact that the Interior Department would now take steps to expand this program defies logic," Senator Ron Wyden (D-OR) said.
Evidence that four top Interior officials were paid as consultants for oil companies hoping for contracts inspired one of the two criminal investigations. With indictments pending and more Congressional hearings planned, there is no telling what else will be revealed in this scandal.
A BUZZFLASH NEWS ANALYSIS
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KEEP YOUR EYE ON THE BALL - PART 2!
Nipping the Oil Companies for the Royalty payments is nice, but NAILING THEM FOR THE BILLIONS THEY ARE CURRENTLY STEALING FROM IRAQ WOULD BE REAL NICE!!
The slick OILY BOYS FROM THE US are using foreign registered, painted-over tankers & just loading 'EM UP DAILY in Basra and further South unhappy Shia snipers are killing the US troops and Blackwater guys trying to make a 'safe corridor' for the looting process to go down. It' like MEND in the Niger Delta in Southern Iraq right now!
BUT THE REAL CRIME IS THAT SO-CALLED TRUE-BLUE AMERICANS ARE LETTING THE US OILY BOYS RIP OFF IRAQ AND THEN TURN RIGHT AROUND AND GIVE BUSH-CHENEY THEIR CUT AND RIP OFF THE US AT THE PUMP!
Americans need to cut the @#$% (foolishness) and stop this @#$%!! If you're looking for true-blue Patriots, don't look at the US Oily Boy Companies!
(stuff).
Oil Companies: History of Dodging Royalty Payments
GREAT PIECE (just posted about it at my blog Buck Naked Politics).
Back in 2001, after Unocal settled a royalty-underpayment suit for $21 million, the Justice Department listed settlements from 15 other companies:
"Including today's agreement with Unocal, the Justice Department has reached settlements of nearly $440 million to resolve claims of underpayment of oil royalties. Previously, the Department had reached agreements with Mobil Oil, $45 million; Oxy USA, Inc., $7.3 million; Chevron, $95 million; Conoco, $26 million; BP Amoco, $32 million; Texaco, $43 million; Pennzoil, $11.9 million; UPRC, $2.7 million; Sun Oil Company, $200,000; Kerr-McGee, $13 million; Exxon, $7 million; Shell, $110 million; Burlington Resources, $8.5 million; Marathon, $7.7 million; and Phillips, $8 million."
Of course, settlement amounts could be less than the amounts the companies actually underpayed. It all depends on who negotiated the terms.
It's all about the Oil
It would appear that our gluttonous Oil Corporations feel entitled to rape, rob and pillage...they do after all have friends in some very "high places", wink, wink.
Dennis Kucinich, bless him, gave an hour long speech on the House floor on Wednesday, May 23, 2007. He may have been talking to an empty House, CNN apparently sets a camera and goes to lunch. The topic was the plan for the privatization of Iraq's oil assets, as in "how did our oil, get under their sand?" The vote in Congress today makes better sense when you take into account that apparently Bush/Cheney want to make sure that "our" oil is safely delivered to those beneficent Oil Moguls currently turning our pockets inside out as they destroy the middle class. Congress needs to take care of their contributors, to be crude (double entente) the vote may have had more to do with protecting our Oil Companies desired assets than taking care of our military and their families.
Representative Kucinich laid out the Administration and Cheney in particular, utilizing trade publications, news articles, and documents that most of us could access on the internet. Remember those energy meetings that Cheney had with "industry leaders" early in the first term? There is a reason that those meetings were secret and no records of them can be obtained. It would appear that they may have been dividing up Iraq's natural resource, before 9/11 and before those "weapons of mass destruction" came to be a rationale for invasion.
The Oil Mafia has the American public and our leadership over the proverbial barrel. Refineries are old and as refineries have been taken off line, they have not been replaced. Meanwhile, the American driving public has grown and surprise, we have pretty poor rapid transit in many of our major cities. Developers have built those "dream homes" further and further from employment because most working slobs want the same things that other Americans want, a home for their family that they can afford; what they can afford is usually a long drive in an automobile because many years ago, big oil and our automobile manufacturers saw an opportunity to make some big dollars. People were lured away from aging public transit lines and into an automobile that they could also use to take vacations and Sunday drives. Gasoline was plentiful and ranged from $.20 to $.50 a gallon and a basic sedan could be obtained for less than $2,000.00. Like a pusher that allows the addict an opportunity to "taste the wares" for free or cheap, these mega corporations sat back and waited patiently for their bait to do its magic.
Now, the American public is blamed for being "thoughtless and selfish" for piggishly consuming a lion's share of the world's oil and we are told by conservative market analysts that the high price of gasoline is dictated by market forces, well yes, and no, a protected market and one with subsidies from your government. It's complicated and bottom line is the price per barrel is up but the price at the pump bears little relationship to the crude market.
Keep the pressure on those Congress people. It was always about the OIL and the trillions of dollars profit to be made. George and Dick apparently can't feel your pain, the rarified air in their "pipe dreams" about the remaking of the Middle East do not allow reality to seep in, its a real downer.
Democrats' expected collapse: :Letter to Congresswoman
The Democrats in the House and Senate are just about to commit suicide. To vote for a war supplemental without a timeline and even without benchmarks is to give Pres. Bush the blank check he has been demanding, but
He has only a 28% approval rating! The opposition to the war is growing and growing and is now well over 60%.
The argument that if you don't pass funding that the President will sign, then you are "abandoning the troops" is completely backwards. The Democrats in the House and Senate are just about to commit suicide. To vote for a war supplemental without a timeline and even without benchmarks is to give Pres. Bush the blank check he has been demanding, but
He has only a 28% approval rating! The opposition to the war is growing and growing and is now well over 60%.
The Democrats in the House and Senate are just about to commit suicide. To vote for a war supplemental without a timeline and even without benchmarks is to give Pres. Bush the blank check he has been demanding, but
He has only a 28% approval rating! The opposition to the war is growing and growing and is now well over 60%.
The argument that if you don't pass funding that the President will sign, then you are "abandoning the troops" is completely backwards.
Bush is the one standing in the way of supporting the troops; they need to be brought home. Capitulating to Bush's insistence is buying the war for the Democrats..
In other words, Rahm Emmanuel and others are about to hang a big dead albratross around the Democratic Party's neck. If Congress funds the war, with a Democratic majority in charge, then it becomes the Democrats' war.
As for the argument that a majority of Democrats won't vote for it, so it's not a Democratic war, that won't stick. It's weasel words. Your party, our party, controls Congress. If the leadership used their power, they could prevent any funding bill that did not have a timeline from passing out of either chamber, and everyone knows that. If they kept on passing funding with a timeline, and Bush continued to veto, then it would be Bush who his refusing funding for "the troops," right? And Bush who is demanding that they continue to be killed, blown up, possibly tortured, all to kno purpose, since the US cannot create a solution in Iraq, only Iraqis can. But Iraqis can't with the US insisting on maintaining control.
Unfortunately, the Democrats in Congress remind me of a line in a poem by William Butler Yeats.. "The best lack all conviction, while the worst are filled with passionate intensity..."
Don't buy the argument that funding the war=supporting the troops. Funding withdrawal supports the troops, funding the war not only prolongs it, it will make it The Democrats' War.
Please, please vote against any supplemental war funding that does not have adequate timelines; if Bush vetoes it, then he is the one who does not support the troops.
Sincerely
Douglas