D.C. Group Cited for Funneling Cash to Interior, DOE Officials
A House subcommittee last week passed a resolution citing three
members of a public watchdog group for refusing to respond to
questions about payments they made to two federal officials
involved in oil royalty policy.
Officials of the Washington D.C.-based Project on Government
Oversight (POGO) refused to answer questions and provide certain
records to the Energy and Mineral Resources Subcommittee in May
regarding reports that they made payments of more than $350,000
each to two oil policy advisors in the Department of Energy (DOE)
and Department of Interior (DOI).
The payments reportedly came out of POGO's share of a
whistle-blower lawsuit seeking recovery of back royalties on oil.
But POGO indicated it now is turning its sights to gas royalty
underpayments, which it believes could be more lucrative than oil.
Cited by the subcommittee were Keith Rutter, POGO's assistant
executive director; Henry M. Banta, director and former chairman of
POGO's board; and Danielle Brian Stockton; director of the group.
The DOI official who allegedly paid was by POGO, Robert Berman,
also declined to answer the subcommittee's questions, but he was
not cited. A subcommittee aide indicated more parties were likely
to be cited in the future.
The House subcommittee's resolution is the first step in a
contempt of Congress action against the three POGO officials. The
resolution must now be acted on by the House Resources Committee
and the full House before it is sent to the Department of Justice
(DOJ), which then will decide whether to prosecute the POGO
officials. The three could face fines up to $1,000 and a year in
prison. In addition to the House, the DOJ and the inspector general
of the DOI are investigating the allegations.
POGO allegedly made the payments to Berman and Robert A. Speir,
who has since retired from DOE, from funds it received in
connection with a whistle-blower lawsuit filed in Texas. Mobil Oil
agreed to pay $45 million to settle the lawsuit, which was brought
by a former Arco Oil employee. The ex-Arco worker agreed to share
its portion of the settlement with POGO, which received $1.2
million. POGO then paid one-third of that amount to each Berman and
Speir, who, according to POGO, "often objected to the way the oil
companies calculated how much they owed the government" in
POGO has called the payments "public service awards," but the
House subcommittee contends they are violations of federal ethics
rules, which prohibit federal employees from accepting or
soliciting outside compensation for doing their official duties.
The subcommittee wants to know "why, how and under what
circumstances did POGO agree to evenly split millions of dollars
with two federal employees; did the payments corrupt or cast a
shadow over any oil valuation policies; and were agency ethics
practices circumvented or were they too lax to stop this secret
deal?" asked Subcommittee Chairwoman Barbara Cubin (R-WY) last
Although the payments have been for recovery of back oil
royalties, POGO's Brian-Stockton has indicated that the group is
now turning its attention to companies that have underpaid their
natural gas royalties. "Having overcome Big Oil's efforts, POGO
will now focus on investigating and preventing future underpayment
of natural gas royalties --- an underpayment estimated to dwarf
those of oil royalties," she said at a May 18 subcommittee hearing.
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