Is Dick Stealing from the US and Giving to His Friends, Again?

Remember the Minerals Management Service? That’s the Department of Interior agency that is supposed to make sure that when oil companies drill on US or Native American lands, the landowner gets a sufficient return for the oil or gas they take out of the land, or, alternately, that a sufficient amount of oil to account for the royalty on the drilling rights is given back to the US. It’s been at the center of scandal before:

For a while, when oil companies drilled oil on federal land, one of three things would happen:

  • The oil companies would cheat and tell the government they drilled less oil than they had
  • When such fraud was identified, DOI would order its auditors to overlook the cheating
  • The byzantine rules governing royalties would make it hard to collect the money you and I are owed

So DOI started a new program. We’d let someone drill oil, and in exchange, the oil company would put a similar amount of oil into the strategic reserve. But when the strategic reserve filled up, the government started using brokers to sell our oil.

It turns out that Susan Wooldridge and Steven Griles had some close ties (as in, sharing a house) to one of the companies bidding to be that broker company, and that that company got to sell our oil even though another broker was willing to charge a higher rate (and therefore pay taxpayers more money). So basically, these two lovebirds accepted a bribe and sold our oil to the lowest bidder.

To fix that problem, they established a Royalty Management Subcommittee, which was supposed to watch out for our interests:

it’s supposed to study:

  • The extent to which existing procedures and processes for reporting and accounting for federal and Indian mineral revenues are sufficient to ensure that the Minerals Management Service receives the correct amount.

  • The audit, compliance and enforcement procedures and processes of the Minerals Management Service to determine if they are adequate to ensure that mineral companies are complying with existing statutes, lease terms, and regulations as they pertain to payment of royalties.

  • The operations of the Royalty in Kind program to ensure that adequate policies, procedures and controls are in place to ensure that decisions to take federal oil and gas royalties in kind result in net benefits to the American people.

Though the Royalty Management Subcommittee proved it wasn’t really interested in transparency and oversight, seeing as how it had a penchant for meeting in secret.

Now, to be fair, the Royalty Management Subcommittee just got started last year, and it takes a long time to reverse Dick Cheney’s corrupt ways. But an IG audit by the Department of Energy has discovered that there are completely inadequate controls on the oil that’s supposed to go into our Strategic Public Reserve, and over a quarter of the oil is disappearing.

To help add to the reserve, DOE receives a portion of the royalty oil that the Department of the Interior gets in return for allowing petroleum companies to drill on government lands and waters.

The department’s Inspector General Gregory H. Friedman and his auditors found that in 28 percent of the oil transfers they examined, the amount received did not match the estimated amount to be shipped by the Interior Department’s Minerals Management Service.

"To illustrate our findings regarding discrepancies, during a four-month period in Fiscal Year 2005, two Department contractors reported receiving 308,000 barrels of royalty oil less than the amount that MMS had scheduled for delivery to the market center. Yet, despite this significant shortfall, the Department took no action to resolve the discrepancy and to ensure that it had received all of the oil shipped by MMS," according to the audit. [my emphasis]

If you’re not vomiting up dinner yet, let me add this detail. Last year, as the Administration was putting together this year’s budget together, there was a bit of a squabble, which Dick (as is typical) won:

No, if there’s anything about the economy that keeps Dick Cheney up at night, it’s the prospect of sabotage aimed at disrupting the oil market, he told FORTUNE.

"Clearly the world depends on a global supply of oil, and that will continue to be true for some considerable period of time. Efforts to shut down the flow of oil could conceivably have a significant impact."

So when President Bush’s 2008 budget was coming together, with the goal of balancing the budget in five years, Cheney nevertheless insisted on a $947 million line item: a speedup of the flow of crude into the Texas and Louisiana salt caverns housing the nation’s Strategic Petroleum Reserve.

The budget guys pushed back: Can’t we wait until crude prices level off? No, the word came back from Cheney, this was urgent. That was all it took. "He doesn’t weigh in on a ton of issues," said a person close to those negotiations. "But when he does . . ."

When he does, the Vice President tends to get his way. "He’s an extremely effective bureaucratic operator," says Peter Wehner, formerly Bush’s director of strategic initiatives.

You see, the SPR had been full already–filled up when oil was at then-record prices (before now, when oil is again at record prices). But the Administration, under Shock Doctrine cover of Katrina, went ahead and expanded the SPR, environmental impacts be damned.

So let’s see. Dick Cheney’s buddies have, for years, outright refused to charge oil companies fair amounts for the right to drill on my and your land. When the excesses of corruption were discovered, they implemented other ways to try to fix the corruption; we would just get the oil, rather than quibble over an appropriate royalty. But come to discover that that method, too, is apparently at least ripe for massive corruption, if not already being exploited for graft. And Dick Cheney’s response?? Expand the opportunity!! I want all my buddies to get an opportunity to steal from the American government, and I’m not above invoking national security to do so!!!


20 replies
    • bigbrother says:

      Can Congress do ‘blanket’ impeachment under the RICO act and take em all down for complicity
      Group A: The war crimes
      Group B: Government waste
      Group C: VBiolation of oath to uphold the constitution
      Group D: The Ag and CIA/DOD Obstruction of Justice
      Under the color of law all appointments were made illegally and reversed making a clean “sweep” of the administration.

      I truly do support your suggestuin since the rethugs own the media we have cspan to cover. And we promulgate legislation to limit media ownership.

  1. CTuttle says:

    DoI has always screwed us, and particularly the Indians, through the countless administrations dating back to Jackson’s term! Literally, think about BIA’s woeful accounting to the various Courts, over the years… Has anything come of it…?

  2. readerOfTeaLeaves says:

    Cheney’s plans appear to be going nicely.
    He probably ordered $50 – $80/b oil put into the SPR, and oil is now at $100/b. Perhaps he figures that the extra $20 – $50 per barrel represents ‘added value’…?

    Next question: how many months will it take Cheney to make certain that the SPR oil is based in euros, rather than in dollars? After all, who wants to pay in dollars these days…? Cheney’s pals will make out so much better if they can pay in euros. I’m sure he’ll get on that item right away.

    • readerOfTeaLeaves says:

      Clarification; I meant that Cheney’s pals will do better if they pay futures in dollars for oil, then sell it in euros. Cheney continues to serve his true constituency by privatizing public wealth for (elite, corporate) private gain.

      And now, with a sinking dollar, that ‘private gain’ can really increase exponentially once it can be wrested out of the SPR, or else drilled ‘off the books’, and then sold in euros.

  3. Leen says:

    Still waiting for the release of who Cheney met with setting up the 2001 energy policy

    This is a picture of cheney just before that 2001 meeting…..drevil.jpg

    “In May 2001, the Energy Policy Development Group headed by Dick Cheney demanded that the “energy security” be a prime objective of the foreign and trade policy of the Administration. It thus provided a justification in the name of “vital interests” for the forthcoming aggression against Iraq. Since then, the United States are at war….and they shall stay at war for, according to James Woolsey, director of the CIA under Bill Clinton ” several decades …for oil” (2). To-day, despite its downward oil production, Syria has become a target because it stands in the way of the crossing of Kurdish pipelines which purportedly will turn Haifa into a Mediterranean Rotterdam and because the Syrian leadership is not prepared to recognize Israel.”

    • CTuttle says:

      “….and they shall stay at war for, according to James Woolsey, director of the CIA under Bill Clinton ” several decades …for oil”

      I like the fact that Woolsey drives a Prius with a bumper sticker saying; “Osama bin Laden Hates This Car!”

      • Leen says:

        James Woolsey’s investments…..olsey.html…..63,00.html

        James Woolsey and his security clearance…..43844.html

        I was able to ask James Woolsey a question at the Baker Peace Conference here at Ohio University after the invasion. (I have not idea why he was th e quest speaker at a peace conference. I asked him if he thought the Office of Special Plans and those who cooked up the false intelligence that took this nation into an unnecessary war should be held ACCOUNTABLE. He got so pissed off with my question he told me to sit down. I laughed and asked him the question again. He was so pissed off I thought he was going to jump off the stage and try to take me out.

        He did not answer that question.

    • JohnLopresti says:

      Leen July 17, 2007, WaPo article and July 18, WaPo list of attendees in the sequenced meetings tokenizing environmentalist advocacy organizations without integrating the many voices into the actual leadership advisory sessions. Ew had more on this in a distant thread, as did Judicial Watch, which latter was much interested in a possible precedent that developed in a suitable forum long after the initial JW+SierraClu suit; though my notebook is still somewhere I have yet to rediscover. I am glad your interest is active, as some of Cheney’s early conceptualizing about what BushSr would have him do in BushJr’s service likely was helping set the tone of those planning sessions. One item which might seem distantly relevant, but which to me is part of the sector’s interest, resurfaced this week in USFS’s decision DoJ could withdraw the federal regulations fiat approach to EIR-less revision of logging mining and mineral regs; EarthJustice and others won that standoff in January 2008 after more than four years of skirmishes.

  4. JohnLopresti says:

    There is a Patriot side of this, perhaps; I noticed a while back a helpful litigator visited a thread and mentioned the energy corridor; Bodman and company are facing a new suit in that matter, as well. It turns out in MX fossil fuel pollution regs are lax, so the plan was to import from generators south of the new borderfence. I look forward to what a few local writers have to say about the oil inequities. In the article about AK ew wrote a while ago, there was more about MMS oversight. Maybe I will have a moment to return to those notes; that red dog mine website, for one, seemed like the contract was a honed instrument to extract only in a way that would favor the entrepreneurs but return to the native peoples only a token share of the take. Though, now with arctic warming, and people realizing the world is going to recognize that global warming has taken its toll upon the Iditarod which March 1 no longer can begin in its usual starting place because there is no snow, instead the media relations people have to truck in snow for the staged beginning of the race, then rebegin the race 100 miles north in Willows, where there is real dogsled snowcover.

  5. JohnLopresti says:

    Hurried. Where @12 was going to end was the northwest passage opening, but also northslope tundra heavy exploration equipment impact is minimized by conducting it only during cold surface rigid season, which since the Valdez spill has shortened from 200 to only 100 days; saw this in some of the polar bear extinction circumvention by USFW last week. MBW should have more on the mms, should she happen by.
    And I know I must have the link for Leen; the energy taskforce serial meetings rosters were released during the Libby turmoil; I need to find that and put it nearby. Will let you know; I think ew will remember this, as well.

  6. TheOtherGuy says:

    EW: Please Google Bushgold for the mineral rape of Africa and South America. Related: Receding glaciers are revealing mineral deposits the big boys are jumping on.

  7. radiofreewill says:

    Darth is getting-in one more Wringing of the Public Teat before he goes…and probably considers it his well-earned Corporatist Good Stewardship ‘Bonus,’ too.

    These Snakes in Suits – these white collar sociopaths of the GOP – with Bush at their forked-tongue head – can rationalize and ‘justify’ anything they decide they want to do. If they can construe their actions as furthering or protecting their Ideological Agenda, then that trumps other ’secondary’ considerations, like the Law.

    However, going pathological is a reduced function state – like having a ‘drunk’ sense of judgment – before you know it Systematic Torture, Wiretapping Citizens on Suspicion, Firing non-partisan USAs, Ideologically taking Control of the DoJ, Destroying Evidence, Compartmentalizing (hiding) Evidence, non-complying with Subpoenas, Outing a National Security Asset and Rigged Justice in Alabama – are going on in Secret all around.

    Welcome to the Kingdom of Bush, where the Rule of Law is an afterthought, at best!

    Allthough it’s only a question of time before such reckless Statecraft ends-up in the ditch of system failure, none of the Shamelessly Enabling Goopers will call Bush on his Failed Policies and Programs – at least, not while the gettin’ is good.

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