Friends in Flow Places

U.S. Interior lets oil-industry royalties slip away, investigation says

An eight-month investigation by the U.S. Interior Department's inspector general reveals that Big Oil may be skirting millions of dollars in annual gas and oil royalties while Interior officials grease the skids. Some of the juicier findings: officials said they'd reviewed 72 percent of revenues from leases, but the total is closer to 9 percent of properties and 20 percent of companies. Audits seem to have dipped 22 percent since 2000 -- an exact count was apparently hard to come by -- and the computerized compliance system relies on the word of oil companies, not a review of records. "That gushing sound you hear is our government leaking royalties owed to American taxpayers," said Rep. Carolyn Maloney (D-N.Y.). "They are going to have some explaining to do next year when there's new leadership in Congress." Not content to wait, Interior created its own panel last month to review the situation. What, you're worried that the panel will be led by a former American Petroleum Institute lawyer? Cynic.