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Conflicts of Interior?

Did the former Secretary of Interior reward potential employers with gov contracts?

By Alex Salta Sep 21 2009, 12:07 AM

Gale at center of the storm

Gale at center of the storm

For the better part of the last several years, critics of the Bush administration have clamored for justice for what they see as that White House's long list of abuses of power. So far, it has been a futile exercise, with no Bush-era cabinet official finding himself or herself on the receiving end of a federal indictment. That may soon be changing.

The Los Angeles Times is reporting that former Secretary of the Interior Gale A. Norton is currently being investigated by the Justice Department for illegally rewarding Royal Dutch Shell PLC, the company that later hired her for a lucrative executive position, with three contracts allowing the company to drill for oil on federally-owned land.

Norton has the captured the distinct honor — sorry Don and Dick — of being the first Bush cabinet official to be at the center of a political corruption investigation. Let's hear it for Gale, everybody!

In 2006, under the supervision of noted treehugger Dick Cheney's energy task force, the DOI awarded Royal Dutch Shell three separate "leases" allowing them to develop up to 15,000 acres of federally owned shale in Colorado.

According to the L.A. Times' report, "Oil shale refers to rocks that release liquid petroleum when heated to extreme temperatures. The highly controversial process promises immense fuel production, but environmentalists argue that it contaminates rugged landscapes and drains precious water."

The drilling contracts, negotiated less than one year prior to Norton leaving DOI for a position as in-house counsel at Shell's unconventional fuels division, can potentially net the petroleum giant upwards of $1 trillion in profits.

Norton is accused of discussing possible employment opportunities with Shell while the Department of the Interior was in the midst of negotiating the drilling deals, a violation of federal "denial of honest services" laws which are meant to combat favoritism in the rewarding of federal contracts.

When DOI announced in early 2006 that Shell would be awarded leases on three separate lands, critics complained that the process was being undermined since the whole point of leases is to try several different approaches to shale drilling and see which is the most effective. Of the five pieces of federal land put up for "research," three of them would be controlled by Shell. By the end of that calendar year, Norton would be on the Shell payroll.

Speaking to the Times on the condition of anonymity, one law enforcement official explains, "If [Norton] had feelers out, or was in discussions with Shell in any way, she is absolutely forbidden from participating in any way from doing anything with Shell." When reached for comment, a Shell spokeswoman told reporters that the company "has not received an official notification with regard to a government investigation."

This news comes during a hectic week at Interior. On Wednesday, Secretary Ken Salazar announced the end of the controversial "royalty-in-kind" program. The program had allowed companies, like Shell, to pay for the use of government lands not in cash but rather oil and gas. At this point, it would probably be safe to say that this isn't exactly the greatest week in the history of the petroleum industry.

"It is time to end the royalty-in-kind program," Salazar told the House Natural Resources Committee in a written statement. He went on to claim that this move would lead to a "more transparent and accountable royalty collection program."

Jack Gerard, president of the American Petroleum Institute, lamented the end of the program by calling it "a means of ensuring that the American people receive fair compensation for development of federal resources." According to Gerard, that "fair compensation" equaled something in the neighborhood of $6.6 billion worth of gas and oil for fiscal year 2008.

According to a Govexec.com story, the royalty program, which was run by the Interior's Mineral Management Service (MMS), has come under fire in the wake of reports by the DOI's inspector General's office that found several ethical lapses in the administration of the program. Were these ethical lapses comparable to an Interior secretary awarding a potential employer with not one, but three sweetheart contracts? That doesn't seem to be too far out of the realm of possibility.

These stories all serve to damage the public's trust in the oil and gas industries and the federal government, two institutions not wholly without usefulness. Norton accepting a lucrative job offer is a no-brainer for herself and her family, but not when it comes at the expense of the public trust she was supposed to be guarding. Some will look at this investigation as merely the first domino to fall in what will be an endless stream of investigations of the Bush administration and its various peccadilloes. That may or may not end up being the case. What is painfully obvious however is that the worst damage, to everything from the environment to the reputation of the Department of Interior, may already have been done.

Read More: Interior (DOI), Revolving Door, Business And Economy, Energy And Environment, National Assets, What The Gov

 
 
 
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