It would seem casual jokes around the water cooler aren't so casual anymore: oil companies really aren't paying their billions in taxes, and the federal government may be involved in letting them get away with it. Recent New York Times reporting reveals that the Interior Department's program to collect money from oil and gas companies that drill on federal lands has been a dismal failure. The corporations owe billions, yet very little of it is actually being turned over.
One former auditor at the agency, Randall Little, went so far as to say these companies are getting a "free ride," and "the taxpayers ought to be outraged."
Sure, we all joked about it -- the fraud of it all -- but a lot of us still held out the secret hope that maybe, just maybe, we weren't being lied to. Maybe gas prices were skyrocketing because there really was a crippling loss of revenue and a shortage of supply. According to the most recent report, however, prepared by the department's chief independent investigator, there were "profound failure[s]" within the Interior Department, resulting in years of unpaid taxes being conveniently ignored. In 2006, officials admitted the government might lose $10 billion from one mistake alone, a legal blunder with oil and gas leases that had been ignored for six years. Ethical failures, management failures, and failures to protect those who would, or did, reveal the fraud, are apparent.
Texas is a state that could be particularly affected by such "mistakes." Most of Texas' major taxes are either associated with the general economy or with industries like oil and gas production, according to Susan Combs, the Texas Comptroller of Public Accounts. Such monies could be used to dig Texas out of the worst healthcare and environmental crises in the nation -- and many blame the latter, at least in part, on oil. While more and more Massachusetts residents, for instance, are getting insured under new laws providing subsidized health insurance coverage, more than twenty-five percent of the Texas population is going without health insurance, the worst rate in the country. Many officials cite the lack of adequate funding.
Although Texas ranks number one in crude oil reserves, it also ranked number one in 1999 for the amount of cancer-causing chemicals in the air and water, in the number of hazardous-waste incinerators, in the total toxic releases into the environment, and in carbon dioxide and mercury emissions, according to the 1999 November/December issue of Sierra magazine. In 2000, most Texans lived in areas that failed federal ozone standards, and Houston -- considered the nation's oil- and petrochemical-industry capital -- actually beat Los Angeles that year in air pollution levels. Dallas and Austin didn't fare much better on environmental evaluations. But government cleanup and health subsidy plans are often funded by tax dollars -- dollars, according to recent reports, that aren't being rightfully paid.
Headed by the Interior Department's inspector general, Earl E. Devaney, the year-long investigation was the end result of four persistent auditors at the agency who claimed senior officials blocked them from collecting millions owed by more than two dozen oil companies. Though the auditors were either fired or demoted for their efforts, they continued to pursue the issue, including filing their own lawsuits against the agency under the False Claims Act -- a provision that allows private citizens to sue corporations they believe have committed fraud against the government.
Auditor Bobby L. Maxwell sued Andarko Petroleum, claiming the oil company had cheated the government of more than $7 million. He lost his job a week after the trial went public; Interior officials called his release a "reorganization." The jury ruled in his favor, but the judge reversed the decision on technical grounds and, oddly, concluded that Maxwell was not entitled to use the False Claims Act. Devaney's report confirmed that Maxwell was ordered to drop the issue by his superiors, though Devaney chalked it up to a simple disagreement about the case's merits. The official directly in charge of reviewing Maxwell's work said the choice to not collect was made by "a senior-level MRM [Minerals Revenue Management, part of the U.S. Department of the Interior's Minerals Management Service] official" who did not provide "documentation to support his decision." Those statements were eliminated from the official's final report.
Randall Little and Lanis Morris, also agency auditors, filed lawsuits after claiming a senior official had refused to collect $1.5 million owed by an oil company. The official responded by claiming that ordering the company to calculate what it owed would be a hardship, but that the Interior Department itself could not get its own systems to run the figures, either. Little and Morris were fired from their Positions at Minerals Management Service.
"How do you define the problems precisely because they had a lot of money," said Lucy Querques Denette agency's associate director, questioned by investigators.
Devaney said during a hearing in Congress, "Short of crime, anything goes at the highest levels of the Interior Ministry," he said, not really criticize the department for intentional irregularities, both in its inability to collect, or tax dollars in the treatmentEmployees. He has brought the differences of "differences", communication problems and mechanical failures.
Randall Luthi, director of the Minerals Management Service, the Auditor claims were the result of a "lack of knowledge of auditors, or the fact that simply disagreed with management guidance and decision," and that his statement was Devaney's report supported. Luthi continued, the auditors chose not to follow the correct procedure if no sharestheir suspicions with supervisors.
Report Devaney behind the assertion of the agency or flagrant crimes oil companies', but has sharply criticized the Mineral Management Service failures to collect money. Devaney suggested that the agency and the oil companies were a bit 'too easy, and that the informants had good reason to fear that their suspicions.
If all this seems a bit 'too easy for you, you're not alone. Many of us would have reactedDenette the question with "Well, not really with a lot of money would be a difficulty. What is their excuse?" If the poorest among us, file taxes, and even the poorest among us - they just feed their families - in jail or cough on the money they do not return if taxes are due, it seems only fair unfairly deny a little 'suspicious of the Ministry of Interior to flat-out right to demand money owed to major oil companies, much less likely thatlegal implications. Billions of dollars that help fight against the real needs of redress for citizens today - the lack of health care, poor education standards and living conditions disappear environmentally disastrous - simple. The only event that would have been worse in this situation is when America is the fundamental commitment to justice and was wounded.
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