Wampum

Three of the US Attorneys fired were from states with very large federal and Indian trust land holdings, leased out to oil, gas, and mineral extraction companies. All three had relatively good relationships with the local tribes, especially David Iglesias of Arizona New Mexico [thanks to anonymouse in comments]. So what's the connection with yesterday's Committee on Resources hearing?

March 29, 2007
Ex-Auditor Says He Was Told to Be Lax on Oil Fees
By EDMUND L. ANDREWS

WASHINGTON, March 28 - A former top auditor at the Interior Department accused senior officials on Wednesday of prohibiting him and other investigators from recovering hundreds of millions of dollars in underpayments from oil and gas companies that drill on federal land and in federal waters.

"There's hundreds of millions of dollars, billions of dollars out there, and I don't think we should be scared of the oil companies," said Bobby L. Maxwell, a former senior auditor who, as a private citizen, sued the Kerr-McGee Corporation, claiming it intentionally cheated the government of royalties for oil and gas it produced in the Gulf of Mexico.

In February, a federal jury in Denver agreed with Mr. Maxwell and ruled that Kerr-McGee had underpaid the government by $7.5 million. Under a law intended to encourage whistle-blowers, the company could be liable for more than $30 million, and Mr. Maxwell would be entitled to keep as much as 30 percent of that.

"There were statements made: 'Don't bother the oil companies,'" Mr. Maxwell told the House Natural Resources Committee, which is investigating allegations of mismanagement in the royalty program run by the Minerals Management Service of the Interior Department.

"The M.M.S. is the proverbial ostrich that has its head in the sand, that sees nothing, knows nothing, but says that no royalties are due," Mr. Maxwell continued.

Another former auditor, from New Mexico, Kevin Gambrell, told lawmakers that he had been repeatedly blocked from trying to recover payments for oil and gas production that were owed to Indian tribes.

You may or may not be familiar with a relatively obscure, purported non-partisan organization named the Fair Access to Energy Coalition (FAIR). While lengthy, I have included all the text from their "About Our Cause" page, as it truly cuts right to the heart of the matter on what they're all about:

Americans rely on energy corridors to transport natural gas, electricity and oil throughout our nation and some of our national energy transportation infrastructure crosses Native American tribal lands. Energy rights of way are available from private landowners, state and federal governments on reasonable terms, but there is no requirement that they be available from tribes. We need a reliable process for ensuring access and negotiating rights of way in order to ensure the reliable and cost-effective delivery of energy to millions of Americans.

Currently, tribal negotiations are governed by the 1948 General Right of Way Act, which under a disputed interpretation by the Department of the Interior, does not provide for an equitable means to renegotiate lease renewals or to determine value for new rights of way with the tribes. This has resulted in tribes demanding inflated compensation, unreasonable terms, or even transfer of infrastructure ownership to them.

Through Section 1813 of the Energy Policy Act of 2005, recently passed by Congress, FAIR has called for a study of these issues to be conducted by the Departments of Interior and Energy. Our goal is to develop a fair and reasonable process for determining rights-of-way costs on Native American lands. There are a number of reasons why the study to be prepared under this legislation will be significant:

* Domestic transportation infrastructure for energy sources is vital to national security.

* Higher supply costs translate directly into higher prices for the retail customer. Increased costs for supply and transportation are ultimately paid by the consumer. Costly transportation increases mean higher energy bills for seniors, low-income families, small businesses - everyone.

* Energy rights-of-way are major income sources to many tribes. If energy companies are forced to reroute their existing pipelines off tribal lands, the negative economic impact to tribes and consumers could be extensive.

* Tribal demands are excessive. For example, in an area where land sells for $500 to $2000 per acre, one tribe is asking the equivalent of $75,000 per acre for a 20-year right-of-way extension on a pipeline that has been in the ground since the 1950s. This compensation equates to 35-70 times more than the average American family would receive. It is not FAIR to force consumers in other states to pay higher energy bills to cover these ridiculous costs.

* Equitable right-of-way settlements are a simple matter of FAIRness. Energy companies have a documented history of FAIR and respectful dealings with Native American tribes. They are not asking for special treatment, only for a way to ensure mutually beneficial relationships that allow them to continue serving their customers at reasonable prices.

Their cause boils down to this: When tribes were weak and most land held "in trust" by the federal government, energy companies were given carte blanche to build pipelines and hang transmission lines, paying ridiculously low amounts for such access. Now that tribes are regaining strength and demanding their sovereignty as guarenteed under their treaties with the US government (outranking even the US Constitution), they are reassessing this previous relationship with BigEnergy. BigEnergy, with this Administration and much of the Congress in its pocket, wants to revoke that sovereignty, and ensure its access as it does on US federal land, by having the Interior Department in its pocket.

These concerns by BigEnergy are further aggravated by current issues before Congress, in particular Indian trust litigation (hearing today) and yesterday's Resources Committee hearing, described above. Should it be officially uncovered that tribes were screwed out of billions in extraction and RoW royalties, tribes might not only act in a monetarily punative manner, renegotiating leases for much higher amounts, they might even outright cancel those leases with the companies who have acted in such bad faith for decades.

So why should red flags be raised over one of many pro-energy industry organizations? For one, FAIR is throwing around big bucks to get their agenda passed: In 2005, they spent $960,000 on lobbying efforts, in 2006, $941,210. And second, just who have they hired in that lobbying effort, namely for former Interior Solicitor (and failed Bush federal court appointee) Williams Myers III, former Assistant Attorneys General for the Department of Justice ((Environment and Natural Resources Division) Tom Sansonetti and Kelley Johnson, and Counsel to the AAG, Andrew Emrich. Of related concern is the identity of the political appointee who replaced Sansonetti and Johnson, who, up until last month, had Department of Justice oversite on all issues relating to such business activities on tribal land; one Sue Ellen Wooldridge, who, ironically came to her position at DoJ as Solicitor General to the Interior Department, a position in which she succeeded the aforementioned FAIR lobbyist, Bill Myers. Wooldridge resigned when her live-in partner, former Deputy Secretary of Interior, J. Steven Griles, was informed by the DoJ that he was a target of a criminal probe regarding perjury and obstruction of justice before the Senate Indian Affairs Committee in November, 2005 (the month Wooldridge assumed her duties at DoJ.)

Now, I admit to sucking you all in with the first paragraph, alleging that there was some connection between the firing of at least three US Attorneys and mismanagement of royalty collection and managment on tribal and federal land; I have no proof that there was such a connection. However, the issue of trust management is so completely embedded in the corruption which has pervaded the Interior and Justice Departments under this Administration that it colors most everything those involved do, including, perhaps, threatening the Republican Chairman of the Senate Indian Affairs Committee. On November 2, 2005, Steven Griles testified before the Senate Indian Affairs Committee, headed by Arizona Senator John McCain on his connection to Jack Abramoff. Yet, as reported by Indianz.com, at the end of that testimony, after McCain gavelled the hearing closed, Griles interjected,

Senator, thank you, and I hope you well as you move forward in dealing with the Indian trust issue. This is so important to Interior to get that dealt with.

The statement, ironically, is only available on the hearing webcast, and is not included in the official transcript. However, Griles, having just perjured himself before the Committee, was apparently most concerned with the Indian Trust Fund, despite the fact he had resigned from the Interior Department the previous year and was then merely a lobbyist for oil, gas and mining companies.

I have much more to say about this issue, but have to take a sick cat to the vet. Eric will be updating on the Senate Indan Affairs Committee hearing on Tribal Trust Litigation, which, of course, is at the heart of all this as well.

(And no, I'm not really "out of retirement" - just can't let issues on which I reported so long to go neglected by the blogosphere.)