U.S. Isn't Getting Royalties From Big Oil

Agency Responsible For Collecting Billions From Energy Companies Has Failed To Do So

(CBS)  Almost every time a company drills for oil or gas on federal property, it's supposed to pay a royalty or tax to the government, CBS News chief investigative correspondent Armen Keteyian reports. But CBS News has learned from a Congressional source that the federal agency responsible for collecting billions of dollars in those royalties has routinely failed to hold the companies accountable.

According to the source, the Interior Department's Minerals Management Service (MMS) audits only about 20 percent of the companies. The rest of the time, the payments are made on the honor system. But the government agency "could not accurately count" its own oil and gas audits — and as a result, it has reported audits that never occurred.

"The Department of the Interior doesn't see itself as a watchdog. It sees itself as a lapdog for the oil and gas industry," says Rep. Edward Markey, D.-Mass.

In fact, in September Inspector General Earl Devaney delivered a withering indictment of ethics inside the Interior Department.

"Simply stated, short of a crime, anything goes at the highest levels of the Department of the Interior," Devaney said at the time.

He has also launched an investigation into MMS. The critical results are expected to be released this week.

The sense is that the MMS is just in bed with the oil and gas industry when it comes to accounting and auditing, but not everyone agrees.

"I don't see that, and there are a lot of checks and balances. including annual audits, so I'm pretty confidence the process works," says Stephen Allred, Assistant Secretary of the Department of the Interior.

The department says it's finding new ways to hold companies accountable. But that doesn't work for Democrats; they plan aggressive investigations come January.

[bellal-2009]

Wait a minute, where's the IRS?

[huskerarmy]

Honor system? There is no honor among thieves. Is this the same honor system that Halliburton was held to in Iraq? I'd characterize it as the Bush/Chaney retirement plan.

[arthurcl1]

No Surprise here. The royalties are going to Bush Jr from his buddies in big oil! The Republicans have been looking the other way on this for years. Now they will have to answer to the Democrats about why this has been happening to the tune of Billions not being paid to the taxpayers Government. Intead a Free Ride for the Fat Oil Companies!

[randalds]

What surprise me is that anyone would be surprised to hear it. I mean how can the poor old oil companies be expected to keep up with their royalty payments and still funnel money into offshore bank accounts of half the elected officials in the White House from the Oval Office on down? That must be why they got a $10 billion tax cut, to help them out. Poor guys!

[olebd]

Certainly the record billions made in profits recently could be spent on alternative fuel technology and research as well as the retrofit of the pumps across the country to the chosen alternative. But GOD FORBID if the top execs make a few million less.

This country was able to beat everyone else to the moon in such a short time period; alternative fuel should be a no-brainer in comparison.

[tdiky]

As Americans(Big Oil) continue to screw over Americans(you, me and the other guy) is it any wonder that so many people have become disillusioned with the direction this country is going?
I am old enough to remember the oil embargo leveled against the U.S. back in 1974 for our support of Isreal during war with Egypt, and the formation of O.P.E.C.. We have had almost 33(!!) years since then to come up with a truly viable alternative to all oil in general. These huge oil companies simply did not want to see that happen, and have made sure it didn't for all practical purposes. So intense is their greed that they worm their way via an oil friendly administration out of even paying on what they take from the Peoples Land. It saddens the spirit.

[bluestardad]

Yes and Oil drilled in Alaska wilderness is being sold to the Asain market instead of being used in America too! But no body does anything about it!

[mjv2944]

Wait!!! I missed the "honor" system part! There is no honor among thieves. At least Jesse James used a gun when he robbed.

[mjv2944]

My, my, my, maybe the fox is guarding the hen house!!!! Lets see, Dubya, oil man, Cheney, oil man, all should have to answer for this scam. Big oil is a big, no wait, giant, leach and they have the full cooperation of Dubya and his band of thieves. Congress don't need to investigate, they need to issue arrest warrants.

[olebd]

This industry is infected with greed. It's no wonder *** like this happens.

[rawehage]

Wires crossed. Big Oil IS the U.S. government. Why would it collect royalties from itself and give them to us?

[rharrin1]

Fire those people hire new and audit every one of them. Cheney is the energy overseer and you know that this administration does not want to hurt anything oil related. Need full investigation?

[marcelde]

Should we really be surprised at another corruption within this current Bush mis-administration. The headline says "U.S. Isn't Getting Royalties From Big Oil" but we need to leave out the periods because the U.S. is "us"!