Wednesday, September 26, 2007

Meanwhile, Back At The Interior Department

It's been several months since the Department of the Interior has been in the news. No, the silence is not reflective of the department's cleaning up its act, it's more a case of folks there waiting for another shoe to drop. According to an article in today's NY Times, that shoe came in the form of a report from the department's own Inspector General.

The Interior Department’s program to collect billions of dollars annually from oil and gas companies that drill on federal lands is troubled by mismanagement, ethical lapses and fears of retaliation against whistle-blowers, the department’s chief independent investigator has concluded.

The report, a result of a yearlong investigation, grew out of complaints by four auditors at the agency, who said that senior administration officials had blocked them from recovering money from oil companies that underpaid the government. offered a sharp description of failures at the Minerals Management Service, the agency within the Interior Department responsible for collecting about $10 billion a year in royalties on oil and gas....

Prepared by the Interior Department’s inspector general, Earl E. Devaney, the report said that investigators found a “profound failure” in the agency’s technology for monitoring oil and gas payments.

It suggested that the agency was too cozy with oil companies and that internal critics had good reason to fear punishment.

“It demonstrates a Band-Aid approach to holding together one of the federal government’s largest revenue-producing operations,” Mr. Devaney concluded.
[Emphasis added]

Interior is responsible for, among other things, managing the energy companies' drilling on public lands and for collecting royalties from the companies for the oil and gas they extract from that property. Several department employees have been complaining for several years that the energy companies were underpaying those royalties. Those same employees have been demoted or fired for their temerity, although this report falls short of accusing the Interior Department of retaliation.

And the excuse offered for not collecting the royalties and not collecting the interest due on the prior underpayments?

In one case, senior officials decided that it would impose a “hardship” on oil companies to demand that they calculate the back interest they owed after having been caught underpaying. The agency itself was years behind in billing the companies, because its computers could not perform the calculations.

That's it, that's the ticket. Blame the software, but don't hold the company that sold the package to the department accountable for the screw-up and demand that it be fixed. And above all, don't ask the poor power companies to figure out what they owe including interest.

I need a desk to pound my head on.



Blogger shrimplate said...

I could loan them my calculator. Or meybe they could get a sixth-grade math student to figure it out for them

9:12 AM  
Anonymous Eli said...

It might not be a *hardship* to ask the oil companies to calculate what they owe, but I think I can see another potential problem with that idea...

8:47 PM  

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