Pogo no-no

Patrick Crow
Washington, D.C.
[email protected]

Thanks to overzealous advocates, the Minerals Management Service's controversial oil royalty rule may be doomed.

Last week, Congress again blocked MMS from issuing the often-revised rule (OGJ, Feb. 16, 1998, p. 36), this time until Oct. 1.

But, ironically, the rule has been undermined by one of its strongest advocates, the citizen's advocacy group Project on Government Oversight (POGO).

POGO has disclosed it paid about $350,000 each to Bob Berman, of the Department of Interior's Office of Policy Analysis, and Robert Speir, now retired from the Department of Energy (OGJ, May 24, 1999, Newsletter). Both had been strong critics of oil company royalty valuations.

Tom Kitsos, MMS deputy director, admitted the payments raise ethical questions but said; "as far as I know," Berman did not help draft the MMS rule.

DOI's Inspector General and the Department of Justice's Office of Public Integrity are investigating.

Payments

Danielle Brian, POGO executive director, explained that the two men helped her group investigate alleged royalty underpayments.

She said the pair declined to join in the False Claims Act lawsuit that POGO subsequently filed in a Texas federal court against several companies.

"POGO decided that, in the unlikely event that we did receive money as a result of this suit, we would still share it with these courageous individuals."

Last fall, Mobil Oil Corp. agreed to a $45 million settlement stemming from the suit, of which POGO got $1.2 million. POGO paid Berman and Speir and notified Justice of the checks.

Brian said, "Whistleblowers exposing government fraud often risk retaliation in the form of job loss, harassment, and demotions. It seemed only fair that the two unsung heroes be compensated in keeping with the spirit of the False Claims Act."

Angry reactions

Sens. Frank Murkowski (R-Alas.), Don Nickles (R-Okla.), and Pete Domenici (R-N.M.) have urged the MMS rulemaking be halted.

"To discover that two federal employees integrally involved in the rule change have financially benefited from their advocacy strikes at the heart of the rule and calls into question the propriety of the department's administrative process."

They said Speir was on an inter- agency task force investigating California royalty payments, which preceded the MMS rulemaking.

"Over the last decade, Mr. Berman has been heavily involved in a variety of issues involving oil and gas development on public lands and had played an integral role in the oil valuation policies on which the rulemaking was based," they said.

Rep. Tom Davis (D-Va.)-not particularly a friend of the oil industry-was angry: "If it becomes commonplace for government policy-makers to take large sums of cash from outside parties who have a financial interest in the outcome of the policy in question, we are going to have a scandalized, corrupted system."

Even if Speir and Berman are not prosecuted or reprimanded, they have given the oil industry grounds to attack the MMS royalty rule in court.

The other Pogo-the one in the comic strips-is known for a saying that applies to the advocacy group POGO, as well.

He said, "We have met the enemy, and he is us."