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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 - http://www.ost.doi.gov

Related Stories:
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Interior raises royalty rate for offshore drilling (1/10)
Democrats to repeal oil and gas royalty incentives (1/4)
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Editorial: Overhaul royalty collection at Interior (1/2)
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