A rare rebellion by government investigators against their own agency, has 4 auditors who monitor leases for oil and gas on federal property say that the Interior Department clamped down on their efforts to recover more than $30 million in fraudulent underpayments of royalties for oil produced in publicly owned waters in the Gulf of Mexico.
Bobby L. Maxwell, who was formerly in charge of Gulf of Mexico auditing, said that these assets belong to the American public and "the agency has lost its sense of mission, which is to protect American taxpayers."
These lawsuits have surfaced as both Democrats and Republicans are questioning the Bush administration's willingness to challenge the oil and gas industry.
Two of the lawsuits claim that two senior auditors with the Minerals Management Service were ordered to drop their claim that Shell Oil had fraudulently shortchanged taxpayers out of $18 million.
Similar suits against Kerr-McGee Corporation and another 2 dozen companies were also suppressed.
Interior officials have denied these accusations, claiming that the auditors simply want a share of any money recovered through their lawsuits.
The department says that the auditors should have followed proper procedure if they believed that fraud was being committed by the companies they were auditing, instead of pursuing private lawsuits under which they could receive up to 30 percent of the monies recovered from the companies.
The auditors have sued the companies under the False Claims Act, that allows individuals to expose fraud against the government. A losing company is required to pay triple the amount of recovered money as well as back interest. In the cases brought by the auditors, this amounts to more than $120 million. People who successfully recover money for the government in such cases are entitled to a share.
While Shell said it had not seen the suits and could not comment, a spokesman from Kerr-McGee said that the case is without merit and the company is fighting it.
The lawsuits come at a time when the Interior Department is already under fire from Congress, accused of covering up ethical lapses and managerial incompetence.
Senator Ron Wyden, Democrat of Oregon, who has been investigating the accusations said, “If it was one isolated instance, you could say that’s somebody who had a bad experience and was frustrated,” Mr. Wyden said.
“But when you have three or four professional, nonpolitical, independent auditors all bringing the same message, that is too important to ignore.”
The Interior Department under President Bush has focused on increasing oil and gas production in the US. Lawyers who have specialized in lawsuits under the False Claims Act said they had never seen a group of government investigators use the law against their own agency and considering that it is 4 and not an isolated one, it forms a pattern of practice.
The agency’s own statistics indicate that revenue from auditing and enforcement plunged after President Bush took office.
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