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Resource ID: #23995
Subject: Corruption
Source: Project on Government Oversight (Washington, DC)
Date: 2008-11-21



The Project on Government Oversight (POGO) has been investigating federal royalty collections since 1995. Oil and gas royalty collections make up the second largest source or government revenue, but throughout POGO's investigations, there have been many concerns as to whether the federal government is collecting all of the money that oil and gas companies owe to taxpayers for drilling on federal lands. Based upon talking to insiders with the Department of the Interior (DOI), POGO conducted the first study to link the management problems that plague the agency with the structural design of the Royalty-in-Kind (RIK) program, as advocated by the oil and gas industry. This series of stories investigated royalty collection at DOI, with a sharp focus on the Minerals Management Service (MMS) and their management of Royalty-In-Kind program. The series found that not only did MMS have an overly close relationship with the industry that they were supposed to be overseeing, but that industry influence had been pervasive and could be traced from the program's inception through its expansion into the full-blown program that exists today. Additionally, the series of stories found that there are extensive inappropriate auditing of royalty payments between MMS employees and the oil and gas industry, insufficient auditing of royalty payments, serious mismanagement of the RIK program, and a debilitating lack of transparency in the program. These findings call the legitimacy of the RIK program into question, and particularly raise questions as to whether this program can effectively pursue royalty collection on behalf of taxpayers.

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