NY Times: Justice investigating whether Interior officials steered oil-trading contracts to favorites
RAW STORY
Published: Saturday December 30, 2006
http://www.rawstory.com/news/2006/NY_Times_U.S._official_overseeing_oil_1230.html Federal investigators are scrutinizing whether government officials made choice consulting arrangements with oil companies, The New York Times is reporting.
"The Justice Department is investigating whether the director of a multibillion-dollar oil-trading program at the Interior Department has been paid as a consultant for oil companies hoping for contracts," writes Edmund L. Andrews. "The director of the program and three subordinates," the article continues, "have been ordered to cease all contacts with the oil industry until the investigation is completed."
Sources told Andrews said investigators worried "that senior government officials had been steering huge oil-trading contracts to favored companies."
The director and his subordinates were based in Denver, Colorado and have since been transferred to other jobs, Andrews indicated.
Excerpts from the registration-restricted article, now available online, follow...
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The Interior Department's Minerals Management Service, which oversees royalty collections, is now the target of multiple investigations by Congress and the Interior Department’s inspector general.
Those investigations are focused on allegations that the agency ordered its own auditors to abandon claims of cheating by large oil companies; that the agency's arcane rules for calculating sales value and royalties make it easier for companies to understate their obligations; and that the agency's basic sources of data are riddled with inaccuracies and are unreliable.
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The most prominent figure in the inquiry is Gregory W. Smith, who was director of the royalty-in-kind program at the Minerals Management Service in Denver. Mr. Smith oversaw the entire program, which now covers 75 percent of royalties for all oil and 30 percent of royalties for all natural gas produced in the Gulf of Mexico.
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One official said investigators were now looking at possible consulting arrangements between the Denver officials and oil companies. The official said the most recent information had, if anything, hardened the suspicions of investigators, and said the potential ramifications could turn out to be far-reaching.
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