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Politics

Interior officials' oil ties under investigation

By ASSOCIATED PRESS
Published December 31, 2006

WASHINGTON - Federal investigators are looking at whether Interior Department officials played favorites or took money from companies vying for big oil and gas contracts.

The investigation is the latest in a series into the Interior Department's handling of $10-billion a year in royalties paid by companies on the $60-billion in oil and gas they produce from leased public lands.

The latest investigations into the department's handling of oil royalties were reported Saturday by the New York Times, which cited unidentified officials.

Those royalties are the federal government's second-biggest source of revenues, behind taxes. Other investigations are looking at multibillion-dollar shortfalls in royalty payments.

The Justice Department is investigating the allegations based on the work of the Interior Department's inspector general's office, an internal watchdog. Rep. Ed Markey, D-Mass., said his staff was told earlier this month of two related matters that the Interior inspector general's office referred to the FBI and Justice Department.

Markey said Saturday in a statement that it was "beyond the pale" that several Denver officials in the Interior Department's Minerals Management Service may have illegally benefited by acting as paid consultants to some of the oil and gas companies. At issue is whether the officials steered oil-trading contracts to favorite companies.

Congress has begun investigating the royalties program. Efforts to reach the Interior Department on Saturday were unsuccessful.

[Last modified December 31, 2006, 00:34:19]