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Oil company owes million for underpaid royalties
Thursday, January 25, 2007
Filed Under: Trust

A federal jury in Colorado said an oil company cheated the American public out of $7.5 million in royalties in a case the Interior Department had claimed was meritless.

The jury agreed with a former Minerals Management Service auditor who brought the case of his own accord under federal whistle blower laws. Bush administration officials accused Bobby L. Maxwell of being greedy.

The Kerr-McGee Corporation now faces a penalty of more than $30 million. Under the False Claims Act, the company can be forced to pay double or triple the amount it underpaid, plus additional penalties.

By bringing the case, Maxwell stands to gain a share of the payment.

Get the Story:
Kerr-McGee Is Found Liable in Lawsuit Over Oil Royalties (The New York Times 1/25)
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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 -

Related Stories:
Senate panel to hold oversight hearing on DOI royalties (1/16)
Interior raises royalty rate for offshore drilling (1/10)
Democrats to repeal oil and gas royalty incentives (1/4)
DOI official under investigation for ties to industry (1/2)
Editorial: Overhaul royalty collection at Interior (1/2)
Criminal inquiries into royalty collection at DOI (12/15)
Supreme Court rules for DOI in royalty collection case (12/12)
Editorial: Interior's long history of accounting failures (12/12)
Investigation finds major problems with royalties (12/7)
Fired DOI auditor recovered tribal royalties (12/4)
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GAO to investigate royalty collection at DOI (11/02)
DOI drops claim to millions in royalties from Chevron (10/31)
New Standard: Oil giant tries to cheat tribes of money (10/11)
Interior won't seek to recover billions in royalties (9/22)
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Editorial: 'Anything goes' at Interior Department (9/18)
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