Jodi Peterson

Associate Editor

Not only has the Department of Interior given carte blanche to energy companies who want to drill on Western lands, it’s failed for years to collect billions of dollars in royalties from those companies (see our earlier story “Taking the law into their own hands” about Interior Department auditors who filed their own fraud claims against energy companies after becoming frustrated with agency inaction).

The New York Times has the story:

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.

And Interior has severely punished the auditors who blew the whistle:

Particularly striking were complaints by two auditors in Oklahoma City, Randall Little and Lanis Morris, who said that senior officials had refused to demand $1.5 million in back interest from oil companies caught underpaying, saying that requiring the companies to calculate their own bills would be a hardship. But the officials said the Interior Department could not get its own systems to do the calculations.

Mr. Little told investigators that the oil companies were getting a “free ride” and that “the taxpayers ought to be outraged.” After the auditors filed their lawsuits, Interior officials removed Mr. Little and Mr. Morris from their jobs at the Minerals Management Service and sent them to work below an entry-level technician at the Bureau of Land Management.

And what about that other long-standing morass at Interior, the Indian Trust case (also see Indianz.com), and all the many other instances of corruption that have been revealed?  Earl Devaney’s famous quote, from a Congressional hearing last year, sums up the agency best: “Short of a crime, anything goes at the highest levels of the Department of the Interior.”