|
Washington, D.C. - Congressman Maurice Hinchey (D-NY) today issued the following statement in response to Interior Department Inspector General Earl E. Devaney's testimony on Capitol Hill today regarding the agency's royalty giveaways to the oil and gas industry. In describing the overall culture at the Interior Department, Devaney said, "Simply stated, short of a crime, anything goes at the highest levels of the Department of the Interior."
Hinchey is the author of an amendment which was approved in the House earlier this year that would help close a loophole that has allowed energy companies to profit on oil and gas taken from U.S. coastal waters in the Gulf of Mexico without paying a royalty, or user fee, to the federal government. While the Hinchey amendment doesn't require energy companies to rework their contracts, it does bar them from receiving future contracts unless they work with the Interior Department to redo the existing contracts that contained the royalty-free clerical error, thus providing energy companies with a large incentive to rework the existing contracts.
"Inspector General Devaney's testimony on Capitol Hill today paints a very bleak picture of how the Interior Department operates. Stopping short of labeling activities at the department as criminal, Devaney made it clear that Interior Department officials have consistently engaged in unethical and inappropriate behavior that has favored the interests of outside parties over those of the American people. Interior Secretary Kempthorne has inherited these problems and I truly hope he takes the steps to remedy them quickly. This is an opportunity for the Interior Department to start fighting for the American people rather than for the oil and gas industry.
"Of particular concern, is the Interior Department's unwillingness to rework contracts with oil and gas companies that were mistakenly drawn up in 1998 and 1999 without clauses that required energy companies that drill on U.S. coastal water to pay royalties for the oil and gas drawn from those waters. Due to what Inspector General Devaney describes as 'bureaucratic bungling,' American taxpayers are expected to lose out on $20 billion in fees that would have otherwise been paid to them by oil and gas companies that are drawing resources from U.S. coastal waters. One would think that the Interior Department would want to fight for the American people and reverse this error so that the contracts would pay the American people the $20 billion they are owed for allowing oil and gas companies to drill in public waters. However, officials at the Interior Department have watched and waited while oil and gas companies pocket $20 billion on top of their already record level profits at the expense of the American people.
"Earlier this year, Congressman Ed Markey (D-MA) and I offered an amendment that would essentially force the hand of oil and gas companies to come back to the negotiating table and insert those user fee payments into the 1998 and 1999 contracts. The House passed our measure by a margin of 252-165 and the Senate Appropriations Committee has since passed similar language. All we are saying is that the American people should not have to be bilked out of another $20 billion from oil and gas companies simply because of a clerical error at the Interior Department. While we can't force oil and gas companies to renegotiate their existing contract, we can tell them that under our watch they don't get the right to do business with the American people if they plan to continue exploiting an error that the Interior Department made almost a decade ago. As we work in Congress to finalize our legislation and make it law, I hope that Secretary Kempthorne will recognize this moment as an opportunity to do right by the American people and put real pressure on the oil and gas companies to renegotiate their contracts."
|
