The Verdict's In

"Government is doing less, so the companies can do more -- more cooking of the books."

That's Bobby Maxwell, a former auditor for the federal Minerals Management Service, explaining how major oil and gas companies have been able to rip off the taxpayers for millions in underpaid royalties on energy leases offshore and on federal lands. Yesterday a federal jury in Denver agreed with him, nailing Kerr-McGee for $7.5 million due on oil leases in the Gulf of Mexico. With penalties and fees, the bill could reach between $30 and $40 million - and Maxwell and his attorneys could end up with a third of that for taking on a case the government didn't want to pursue. Kerr-McGee's attorneys haven't indicated yet whether they will appeal the verdict.

The story of how Maxwell took on Kerr-McGee, despite his bosses urging him to drop the matter, and how it probably cost him his job, can be found here. And here's the truly bad news for big oil: Inspired by Maxwell's example, four other MMS auditors have filed similar lawsuits, seeking millions in unpaid royalties that their agency has declined to collect.


Government may be doing less, but some civil servants - lured by the possibility of collecting a big bounty, but risking their jobs in the process - are keen on doing more. -Alan Prendergast


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