US Department of the Interior Insp. Gen. Earl E. Devaney intended to mention reforms that have been implemented as well as problems he has identified at DOI when he came before the House Natural Resources Committee on Feb. 16. But Republicans on the committee had other ideas.
They charged that his report on his office’s investigation of missing price thresholds in federal deepwater oil and gas leases issued in 1998 and 1999 was not balanced and omitted several questions and documents.
Rep. Steve Pearce (R-NM), who led the criticism, also questioned the report’s conclusion that thresholds were omitted by mistake, suggesting instead that managers and employees at the Minerals Management Service and DOI decided in 1998 and 1999 that the thresholds were not necessary because oil prices were low.
“I don’t think there was double-dealing on the part of the Clinton administration. I don’t believe there was inherent criminal activity. I simply think they felt the price would never reach a level where thresholds would be needed,” Pearce said.
‘Never written down’
Devaney replied, “There never was a policy. The practice of the department was to put addendums on these leases, which included price thresholds. If there’s reference to a policy, it probably refers to a statement by witnesses that there was a policy, but it was never written down. My solicitor has been searching frantically for a written policy and hasn’t found one.”
Pearce characterized this as “policy by innuendo” and asked Devaney if he thought it would withstand a legal challenge. Devaney declined to offer an opinion, noting that he is not a lawyer, but added that investigators from his office have found similar situations throughout DOI.
Their difference in opinion regarding the price thresholds’ omission from the 1998 and 1999 deepwater leases was that Devaney thought it apparently was a mistake while Pearce suggested it could have been casually deliberate-essentially, omitting the thresholds because they had not seemed to matter in the past.
Strategy signal
Their exchanges signaled that House Republicans intend to vigorously oppose Democrats’ efforts to legislatively pressure holders of those 1998 and 1999 deepwater leases to renegotiate terms.
“Based on your testimony in the Senate and here today, there was no statute to require inclusion of price thresholds. There was no policy requiring their inclusion. There simply was a deliberate omission,” Pearce said toward the hearing’s conclusion.
“I don’t see where the Clinton administration was so inept that it would go 30 months after discovering the absence of price thresholds before including them. I do see a bad decision by the Clinton administration that assumed the price of oil would not go above $28/bbl,” he told Devaney.
Chairman Nick J. Rahall III (D-W.Va.) said there would be more hearings. “Something is amiss in this program,” he said. “We will work to find ways to find and remedy it.”