May 23, 2007

CONTACT: Allyson Ivins Groff, 202-226-9019

WASHINGTON, D.C. - During a hearing today on H.R. 2337, the "Energy Policy Reform and Revitalization Act," U.S. Rep. Nick J. Rahall (D-WV), Chairman of the House Natural Resources Committee, made the following remarks:

The "Energy Policy Reform and Revitalization Act" contains a provision that would limit the scandal plagued Royalty-In-Kind program - where the government collects royalties in the form of oil and gas rather than financial payments - to filling the Strategic Petroleum Reserve.

The bill also contains provisions requiring an aggressive auditing regime of oil and gas royalty payments owed to the Federal government, and consequently, the taxpayers.

According to media reports, the Justice Department has launched a criminal investigation into the activities of top officials involved with the Royalty-In-Kind Program. The inquiry appears to focus on the cozy relationship between these officials and those in industry who seek contracts from them.

It has now come to my attention that the Minerals Management Service official in charge of the program, Greg Smith, has announced an early retirement effective today. Now that is passing strange, is it not?

This comes on the heels of embattled MMS Director Johnnie Burton's announcement that she also is retiring. This is a person who apparently never saw an oil and gas royalty payment audit she liked. Under her reign, the average number of annual audits conducted plummeted from 540 to 144. And left on the wayside were billions of dollars in royalty payments owed to the American people.

It appears this Administration uses retirement like some perverse witness protection program. Get them out of the spotlight and off the list of in-the-know folks who could provide damaging evidence. Instead of Watergate's "follow the money," the Bush Administration has "follow the retirements."

When the House considered energy legislation at the beginning of the year, I stated it was almost like Albert Fall's ghost was haunting the halls of the Interior Department. Fall was the Interior Secretary who embroiled President Harding's Administration in the Teapot Dome Scandal.

But perhaps what they are really doing is building a Wall of Shame at the Interior Department. Whenever I call a hearing, the Interior officials involved are suddenly gone. We never even get a chance to have them appear before the committee, because they are retiring or resigning.

Take Julie MacDonald for example. She was the deputy assistant secretary who had a passion for doctoring scientific documents in order to obtain desired outcomes under the Endangered Species Act for favored cronies. She resigned a week before this committee convened a hearing on the subject matter.

So let me say to the Interior Department witnesses appearing before the committee today, you are very brave. I commend you.