Wampum

While the Blogosphere has been chasing Jack Abramoff, his K-Street cronies and their Congressional co-dependents down the tribal gaming rabbit hole (and getting distracted by navel-gazing in the process,) they've past by time and again a separate hole the Bush Administration has done an excellent job of camoflaging. Up until now, that is. Yesterday, the New York Times reported their three-month long investigation on the subject in this article:

As Profits Soar, Companies Pay U.S. Less for Gas Rights
By EDMUND L. ANDREWS

WASHINGTON, Jan. 22 - At a time when energy prices and industry profits are soaring, the federal government collected little more money last year than it did five years ago from the companies that extracted more than $60 billion in oil and gas from publicly owned lands and coastal waters.

If royalty payments in fiscal 2005 for natural gas had risen in step with market prices, the government would have received about $700 million more than it actually did, a three-month investigation by The New York Times has found.

But an often byzantine set of federal regulations, largely shaped and fiercely defended by the energy industry itself, allowed companies producing natural gas to provide the Interior Department with much lower sale prices - the crucial determinant for calculating government royalties - than they reported to their shareholders.

As a result, the nation's taxpayers, collectively, the biggest owner of American oil and gas reserves, have missed much of the recent energy bonanza.

The disparities in gas prices parallel those uncovered just five years ago in a wave of scandals involving royalty payments for oil. From 1998 to 2001, a dozen major companies, while admitting no wrongdoing, paid a total of $438 million to settle charges that they had fraudulently understated their sale prices for oil.

Since then, the government has tightened its rules for oil payments. But with natural gas, the Bush administration recently loosened the rules and eased its audits intended to uncover cheating.

So what, you all might ask, does this have to do with Abramoff?

Three words. Cobell vs. Norton.

For an excellent overview of the case, brought by Blackfoot banker Elouise Cobell a decade ago and still unresolved, see this article by Julia Whitty in last September's Mother Jones magazine. But where Cobell and the Times article above intersect is the subject of the next phase of the trial, presided over by Reagan-appointee 1st Circuit Court of Appeals Judge Royce C. Lamberth (also of US v. Microsoft fame). Lamberth has previously ruled in favor of the 500K Indians represented by the Cobell class action suit, and has ordered the Interior Department to provide a full accounting of the Indian Trust Fund, including citing Sec. Gale Norton with contempt.

The Bush Administration, however, refuses to back down, appealing each and every one of Lamberth's decision, and even attempting to have him removed from the case. In September, 2003, Lamberth ordered the Interior Department to provide a full accounting of all Trust Fund accounts since their inception in 1887. The Interior Department claimed it could do this with the records it has, despite extensive testimony (and subsequent rulings by Lamberth) that many of the accounting records were destroyed or discarded over the past century. From a recent Cobell press release:

Pursuant to the 1994 Act, Judge Lamberth ruled that Interior must provide an accurate accounting of all money held in trust for the benefit of the Plaintiffs, without regard to when the funds were deposited.

The judge also ruled that the government must issue subpoenas to third parties, including oil and gas companies, for information related to the Indian trust. Prior reports of the court-appointed Special Master indicated that American Indian landowners were receiving as little as 1/10 what non-Indian landowners on adjacent properties were receiving for leases, mining rights and other interest.

Cobell attorneys argue that the way to get to a fair accounting is to look at the leasee industries' accounting records, not the government records, to see what they reported as income off the Trust lands, and then adjust the records appropriately. From the report in the New York Times yesterday, we can see now why such industries, as well as their political cronies in the Bush Administration and the Republican Congress would fight such actions tooth and nail. In fact, as reported by Witty in MotherJones,

In 2003, Congress inserted itself into the machinations by attaching midnight riders to omnibus budget and Iraq appropriation bills to delay the court-ordered historical accounting. It also attempted to cut the salary of court-appointed investigators, while permitting Secretary Gale Norton to use discretionary funds to pay for the scores of private attorneys hired by all past and present Interior employees appearing in the case.

The potential amount of lease revenue and interest in the Cobell case surpasses 100 billion dollars. It would be very difficult for any politician, even corrupt Republicans, to explain to their constituents that the American taxpayers, not the super-profitable oil and gas industry, should be footing the bill to bail out the Trust Fund.

So, Lefties, it's time to put the Debbie Howell.Queen of Hearts and WaPoBlog Mad Hatter to rest,and get on the trail of the real White Rabbit, like the $250,000 donation Abramoff asked the Coushuttas to make to the "environmental organization" Norton founded (later run by her former campaign manager.) As the rabbit was wont to say, "I'm late, I'm late, for a very important date!" The Left is years late on Cobell v. Norton, but here's a little impetus to finally do the right thing, even if they're only thinking of themselves and next November's election.