<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:38580.wais]
INTERIOR DEPARTMENT: A CULTURE OF MANAGERIAL IRRESPONSIBILITY
AND LACK OF ACCOUNTABILITY ?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY AND RESOURCES
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 13, 2006
__________
Serial No. 109-248
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
JON C. PORTER, Nevada C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia ELEANOR HOLMES NORTON, District of
PATRICK T. McHENRY, North Carolina Columbia
CHARLES W. DENT, Pennsylvania ------
VIRGINIA FOXX, North Carolina BERNARD SANDERS, Vermont
JEAN SCHMIDT, Ohio (Independent)
BRIAN P. BILBRAY, California
David Marin, Staff Director
Lawrence Halloran, Deputy Staff Director
Benjamin Chance, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Energy and Resources
DARRELL E. ISSA, California, Chairman
LYNN A. WESTMORELAND, Georgia DIANE E. WATSON, California
JOHN M. McHUGH, New York BRIAN HIGGINS, New York
PATRICK T. McHENRY, North Carolina TOM LANTOS, California
KENNY MARCHANT, Texas DENNIS J. KUCINICH, Ohio
BRIAN P. BILBRAY, California
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Lawrence J. Brady, Staff Director
Dave Solan, Ph.D., Professional Staff Member
Lori Gavaghan, Clerk
haun Garrison, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on September 13, 2006............................... 1
Statement of:
DeVaney, Earl E., Inspector General, Department of the
Interior................................................... 19
Letters, statements, etc., submitted for the record by:
Davis, Chairman Tom, a Representative in Congress from the
State of Virginia, prepared statement of................... 15
Dent, Hon. Charles W., a Representative in Congress from the
State of Pennsylvania, prepared statement of............... 17
DeVaney, Earl E., Inspector General, Department of the
Interior, prepared statement of............................ 23
Issa, Hon. Darrell E., a Representative in Congress from the
State of California:
Briefing memo............................................ 3
Prepared statement of.................................... 10
INTERIOR DEPARTMENT: A CULTURE OF MANAGERIAL IRRESPONSIBILITY AND LACK
OF ACCOUNTABILITY?
----------
WEDNESDAY, SEPTEMBER 13, 2006
House of Representatives,
Subcommittee on Energy and Resources,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:30 p.m., in
room 2154, Rayburn House Office Building, Hon. Darrell E. Issa
(chairman of the subcommittee) presiding.
Present: Representatives Issa, Dent and Bilbray.
Staff present: Larry Brady, staff director; Lori Gavaghan,
legislative clerk; Tom Alexander, lead counsel; Dave Solan,
Ph.D. and Ray Robbins, professional staff members; Joe
Thompson, GAO detailee; Alexandra Teitz, minority counsel;
Shaun Garrison, minority professional staff member; and Cecelia
Morton, minority office manager.
Mr. Issa. Good afternoon. A quorum being present, this
hearing of the Government Reform Subcommittee on Energy and
Resources will come to order. This is the fourth investigative
hearing by the subcommittee regarding the absence of price
thresholds in deep water leases between the Interior
Department's Mineral Management Service and various oil and
natural gas producing companies during the 1998, 1999 calendar
years. The GAO estimates that the lack of price thresholds will
or could, if not corrected, cost the U.S. Government nearly $10
billion in lost royalty revenue; $2 billion has already been
lost.
This estimate does not include the major new discovery
announced in the past week. Part of this discovery is located
in fields leased in 1998 and 1999, and these leases do not have
price thresholds, meaning they are free of all revenue to the
government. This means even more revenue will be lost.
The subcommittee has concluded its investigation. It has
found that the Interior Department has breached its fiduciary
duty to the American people. The Interior Department holds our
natural resources in trust for the American people. It has
squandered billions of dollars.
In sworn testimony and formal interviews with subcommittee
investigators, Interior Department and MMS personnel have
claimed the inclusion of price thresholds was always Department
policy, but their omission in 1998 and 1999 was a case of the
right hand did not know what the left hand was doing. That's an
excuse. This is very much incorrect. There were certainly
officials who participated in the review of the actions of the
different offices and divisions and departments, but they
failed to ensure that the price thresholds were implemented.
When allegedly presented in 1999--and I say allegedly even
though this has come to us, and I personally believe it--with
prima facie evidence, Interior's own regulations, Interior's
own regulations that the price thresholds were in fact missing
from the leases and the regulations, MMS officials did nothing
to correct it.
This particularly troubles me because Chevron, who
testified under oath in detail about notifying MMS, stood to
lose possibly hundreds of millions of dollars by telling the
truth. I congratulate them on their integrity in coming forward
with this information. MMS officials on the other hand do not
dispute Chevron's testimony but instead claim to have no
recollection of the multiple inquiries into this matter.
Who are we to believe, those who testify under oath to
their own detriment or those who have no memory? Unfortunately,
I am left to conclude that there is a new bureaucratic
principle that has been identified through this investigation
and distinctly applies to Interior Department and its managers;
it is to define a job so narrowly and limited in scope over
time--no matter how senior the position--that the person claims
neither responsibility nor accountability for fulfilling their
basic duties. The only good thing claimed is a paycheck.
I want to make it clear that individuals do make up
institutions, and these individuals must be responsible for
their actions. However, the Interior Department and the MMS are
not just comprised of limestone buildings with thousands of
individuals going about their business. There is also an
institutional culture, an organizational intransigence that
exists. This is surely the issue that will be taken up in a
hearing tomorrow by the full Committee on Government Reform.
Testifying though here today before the subcommittee
regarding its office investigation is the Interior Department's
Inspector General, Earl E. Devaney. He will describe in much
greater detail when and why price thresholds disappeared from
leases and what personnel did once it was discovered. While the
subcommittee has brought in many individuals to testify in
public hearings, which the IG cannot do, the Office of the
Inspector General has more access to the Department and was
able to review emails and materials that are not provided to
the committee despite repeated requests.
Mr. Devaney, I welcome you. This is one of the most
important jobs that any Inspector General can do. You are a
very respected Inspector General. I commend you for the work. I
commend you for coming before this committee. I recognize that,
in fact, your investigation is not complete. And I want to make
it clear for the record that this is an unusual accommodation
for you to come forward with a hearing that, although partially
completed, clearly is not prepared for its final ruling.
Additionally, I would like to ask unanimous consent the
briefing memo prepared by the subcommittee staff be inserted
into the record as well as all relevant materials. Without
objection, so ordered.
[The information referred to follows:]
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Mr. Issa. And I now yield to the full committee chairman
for his opening statement.
[The prepared statement of Hon. Darrell E. Issa follows:]
[GRAPHIC] [TIFF OMITTED] 38580.007
[GRAPHIC] [TIFF OMITTED] 38580.008
[GRAPHIC] [TIFF OMITTED] 38580.009
Chairman Tom Davis. Thank you very much, Mr. Issa.
Good afternoon. I would like to take this opportunity to
commend Chairman Issa and his staff for their thorough look at
the issue of natural gas royalties from Federal offshore
leases. This is the fourth subcommittee hearing on this issue.
Tomorrow we are holding a full subcommittee hearing as a
followup to today. You know, they talk about not doing
oversight; this is the kind of oversight that is very, very
important to American taxpayers and to American energy users.
And I've just got to say, I'm a little surprised that they're
not even here to help us oversee it.
I am disheartened by the facts uncovered by the
subcommittee during its 6-month investigation and by the
Department of the Interior's Inspector General's Office.
Uncovering waste, fraud and abuse is what this committee does
best. When failings within the government are identified we
need to remedy them as quickly as possible. Unfortunately, as
it pertains to the deep water drilling leases signed under the
Deep Water Royalty Relief Act. This was not the case in the
Interior Department.
Today we'll hear the findings of the Inspector General's
investigation. We'll hear of conflicting accounts from within
the Department of Interior why price thresholds were omitted
from deep water leases in 1998 and 1999. We'll hear of
conflicting accounts as to when the omissions were discovered.
We'll also hear of an internal Department decision made in 2000
against disclosing the omissions to the director of the
Minerals Management Service. It's unacceptable that the
omissions of price thresholds which would cost the country
billions of dollars can be concealed for 5 years, hidden for 5
years.
Unfortunately, as the Inspector General has found, the deep
water lease issue is not an exception in the Department. The
Inspector General's Office has issued countless reports citing
cases of ethics failures and a history of ineffective
management and policy throughout the Department. These failings
permeate employee morale, as the Inspector General's Office
found in 2004 that 46 percent of employees within the
Department believed discipline was administered fairly only
sometimes, if ever.
Tomorrow in a full committee hearing, we'll receive
testimony from Lynn Scarlett, the Deputy Secretary of Interior,
and Johnny Burton, director of the Minerals Management Service.
The hearing will give these witnesses a chance to respond to
the Inspector General's report and provide members with an
opportunity to delve further into issues that appear to plague
the Department of the Interior. Now is the time for Secretary
Kempthorne, really the new man on the block, to rectify the
longstanding culture of disregarding and dismissing examples of
waste, fraud and abuse within the Department.
While we can't change the decisions in 2000 that kept the
omissions and the contract hidden for 5 additional years, we
can learn from the past and commit ourselves to working to
reform the Department of the Interior in remedying these
longstanding inadequacies. American taxpayers demand and
deserve nothing less.
Let me just add, the Department of Interior is the reason
why I am in Congress, if you want know, from Virginia. My
grandfather came here from Nebraska as Solicitor of the
Department in 1953, rose to Undersecretary under Doug McKay and
was acting Secretary in the mid 1950's before Fred Seaton came
in. And when he moved, the rest of the family moved to
Virginia, and I stayed here and now represent the area in
Congress.
So it's disappointing to me that these problems persist,
but I want to commend the Inspector General. He's known as not
only fair and thorough but one of the best IGs in government,
and we appreciate you being here today.
[The prepared statement of Chairman Tom Davis follows:]
[GRAPHIC] [TIFF OMITTED] 38580.010
Mr. Issa. Thank you.
And the gentleman from Pennsylvania, Mr. Dent.
Mr. Dent. Thank you, Mr. Chairman. And I appreciate your
leadership on this very important issue and also for allowing
me to participate on this crucial hearing on the absence of
price thresholds in deep water leases between the Department of
the Interior and various oil and natural gas companies between
1998 and 1999. As the fourth oversight hearing in this 7-month
long investigation gets underway this afternoon, i believe it
is critical that we address the means by which the Department
will efficiently and expeditiously remedy the sources of
internal inadequacy that contributed to this costly error.
Because of the gross mistake in deep water leases during
these years, the U.S. Government Accountability Office
estimates a loss of upwards of $10 billion revenue over the
life of the leases. In a letter I recently sent to Secretary
Kempthorne, I expressed my concern that this costly error
ultimately falls to the American people. As Americans continue
to realize high prices at the pump, oil and natural gas
companies have experienced the luxury to preclude themselves
from royalty payments from 1,100 deep water leases. With
Chevron's most recent oil discovery in the gulf, it has been
reported that at least two of their leases used in this oil
field may relieve the company of royalty payments in millions
of barrels of oil. I do believe it is imperative that this
committee is informed by the proactive measures of the
Department that it's pursuing to remedy any internal
inefficiencies that have contributed to this blunder. I look
forward to the testimony of the very distinguished Inspector
General, Mr. Devaney.
Thank you again, Chairman Issa, for holding this hearing,
and I look forward to your testimony.
[The prepared statement of Hon. Charles W. Dent follows:]
[GRAPHIC] [TIFF OMITTED] 38580.011
[GRAPHIC] [TIFF OMITTED] 38580.012
Mr. Issa. Thank you. And I would also ask the committee for
unanimous consent for the gentleman from Pennsylvania, who is
not actually on the committee, to be able to remain--not on the
subcommittee--to remain and ask questions. Without objection,
so ordered.
I apologize. I see you so often, I forgot you were not on
the committee.
And with that, Mr. Devaney, I would ask that you rise, as
is the requirement of the committee, to take the oath.
[Witness sworn.]
Mr. Issa. Let the record show the answer was in the
affirmative.
Once again, we appreciate your being here. We understand
that your testimony and our questions will be limited to that
which is available, recognizing that your Department has not
completed your investigation. However, I've looked over your
testimony, and it is more than sufficient to give us the
appropriate backup of what this committee had already found,
and with that, I look forward to your testimony and take what
time you need.
STATEMENT OF EARL E. DEVANEY, INSPECTOR GENERAL, DEPARTMENT OF
THE INTERIOR
Mr. Devaney. Thank you very much, Mr. Chairman. I
appreciate your remarks and other remarks from other members of
the committee this morning.
I want to thank you for the opportunity to address the
subcommittee this afternoon concerning the status of our
investigation into the circumstances surrounding the failure of
the Minerals Management Service to include price thresholds in
deep water leases entered into during 1998 and 1999. You've
also requested that I address, ``the institutional culture of
managerial irresponsibility and lack of accountability that
lies beneath some of the most significant failures at the
Interior.''
Mr. Chairman, with your permission, I would like to submit
my full testimony for the record and make some oral remarks and
then answer any questions the committee might have.
Mr. Issa. Without objection, so ordered.
Mr. Devaney. Mr. Chairman, I know you and other members of
the subcommittee have a general understanding of how we conduct
our investigations. Suffice it to say, we are always as
thorough and as accurate as we possibly can be regardless of
the fervent emotions, strong opinions and competing interests
that usually swirl around high-profile investigations like this
one.
As the content of our previous reports demonstrates, we
will condemn the Department for wrongdoing, and we will
exonerate the Department when allegations prove unfounded.
Whether an investigation results in a prosecution and a
conviction of a criminal defendant or only disciplinary action
against an employee engaged in misconduct, I am most pleased
when the results of an investigation also give the Department
the insight and incentive to improve the way it conducts itself
and help prevent the problem from recurring again.
I'd like to give this subcommittee my assurance that our
investigators are working diligently to finalize our report of
the investigation concerning the terms of the deep water leases
issued in 1998 and 1999. In summary, we have conducted our
investigation with two primary questions in mind: How and why
were price thresholds omitted from the deep water leases of
1998 and 1999; and what happened once that omission was
discovered?
What we know is that MMS told us that they intended to
include price thresholds in leases issued pursuant to the Deep
Water Royalty Relief Act, like the first leases issued in 1996
and 1997. As MMS was developing new regulations relating to the
Deep Water Royalty Relief Act, confusion apparently arose among
MMS components as to whether or not the regulations would
address price thresholds. In the end, those regulations did
not. The person responsible for directing the preparation of
the leases said he was told by those in the MMS Economics and
Leasing Divisions to take the price threshold language out of
the leases. This individual submitted to a polygraph
examination and passed.
Those in the Economics and Leasing Divisions deny telling
him to take the threshold language out. One of those
individuals provided a sworn statement, submitted to a
polygraph and passed. Another individual refused to provide a
sworn statement. So he was not even asked to take a polygraph.
The third individual provided a sworn statement but refused to
take a polygraph.
We have learned that the attorney from the Solicitor's
office who was involved in both processes had earlier conceded
to an MMS official that he should have spotted the omission but
did not. The official who signed the leases on behalf of MMS
told us that he had relied on that attorney and his own staff
for input before signing. He also passed a polygraph.
We also have learned that when the omission was discovered
by MMS staff in 2000, it was not conveyed up the chain of
command to the MMS Director's Office. In fact, we interviewed
three former MMS directors who each told us that they only
became aware of the omission when The New York Times article
came out earlier this year.
So far, we've interviewed 29 witnesses, including present
and former DOI employees. We have also obtained approximately
11,000 MMS emails, and using software developed by our forensic
specialists, we searched these emails to extract those emails
potentially relevant to this issue. Ultimately, we determined
that less than 20 emails were relevant to our investigation.
Specifically, we found a brief flurry of email discussion in
2000 about the discovery of the omission of price thresholds,
and those emails also document the decision not to advise the
Director of MMS. Unfortunately, the MMS official who made this
particular decision is deceased. We did not find any email
prior to 2000 that touched on this issue.
Mr. Chairman, in the end, unless we come across something
entirely unexpected, this appears to be a classic example of
bureaucratic bungling, of the stovepiping of various
responsibilities involved in a complex undertaking, of reliance
on a surname process which only served to dilute responsibility
and accountability and of having no one person responsible for
the final product.
Although we have found massive finger-pointing and blame
enough to go around, we do not have the proverbial smoking gun.
However, we do have a very costly mistake which might never
have been aired publicly absent The New York Times, the
interest of this committee, the Senate Committee on Energy and
Natural Resources and that of several other individual Members
of Congress.
This brings me to the second matter of concern to the
committee, the culture at the Department of the Interior that
sustains managerial irresponsibility and lack of
accountability. I'd like to speak about this culture in very
general terms, if I may. In fairness, I cannot speak about it
in terms of the deep water royalty relief issue yet since the
Secretary has not had the benefit of our report on the matter.
And in fact, while Secretary Kempthorne has essentially
inherited the culture at the Interior, he has already signaled,
both in terms of his early messages to Interior employees and
is in his personal discussions with me, his intentions to
create and sustain a culture of ethics and accountability
during his tenure as the Secretary of Interior. Therefore, I am
hopeful at this juncture that the culture that I describe in my
testimony today will soon become a thing of the past.
Mr. Chairman, I recently marked my seventh anniversary as
Inspector General for the Department of the Interior. Over the
course of this 7-year tenure, I have observed one instance
after another when the good work of my office has been
disregarded by the Department. Simply stated, short of a crime,
anything goes at the highest levels of the Department of the
Interior. Ethics failures on the part of senior Department
officials taking the form of appearances of impropriety,
favoritism and bias have been routinely dismissed with a
promise of not to do it again. Numerous IG reports which have
chronicled such things as efforts to hide the true nature of
agreements, deviations from statutory, regulatory and policy
requirements procurement irregularities, massive program
failures with bonuses awarded to the very people whose programs
fail and indefensible failures to correct deplorable conditions
in Indian country have been met with vehement challenges to the
quality of our audits, investigations and evaluations.
I've taken to calling this behavior the dance of the three
Ds: That is, first deny it happened; then defend the
indefensible; and then, when all else fails, attempt to delay
public exposure of the problem. In one particularly contentious
investigation of a high level official that we conducted over
the course of several years which cost my office well over $1
million, I commented in my transmittal letter to the Secretary
that, ``The American public is not equipped to conduct the kind
of tortured analysis necessary to come to a sound legal
conclusion in matters like this. Whether a violation occurred
or not may ultimately be irrelevant. Mere appearances, however,
will erode the public trust. Once eroded, that trust is
difficult if not impossible to win back.''
After she received my report, former Secretary Norton met
with me at length and indicated that she had accepted this
official's admission that he had exercised bad judgment, but
given his promise not to do it again, she was unwilling to take
any action against him.
I have unfortunately watched a number of high level
political and career Interior officials leave the Department
under the cloud of one of our investigations into bad judgment
and misconduct. Absent criminal charges however, they are sent
off in the usual fashion with a party paying tribute to their
good service and the Secretary wishing them well to spend more
time with their family or to seek new opportunities in the
private sector. This charade does not go unnoticed by career
public servants. What are these civil servants to think if
those at the top are not held accountable? Why should those at
lower levels not feel empowered to challenge the call for
accountability?
In June 2004, my office issued an evaluation report on the
conduct and discipline at the Department which chronicled
widespread skepticism regarding the fairness of the
department's discipline policies. For instance, over one-third
of the respondents believe that discipline for misconduct
depended on who committed the offense rather than the offensive
itself. A startling 46 percent of respondents stated that
discipline was administered fairly only sometimes if ever.
This failure to hold the leadership of the Department
accountable sets the stage for the remainder of the work force.
If one subscribes to the concept of leading by example, it's no
wonder that a culture of managerial irresponsibility and lack
of accountability thrives at the Interior.
Mr. Chairman, I don't have a simple solution. I am only
hopeful that somehow the Congress, Secretary Kempthorne and I
can work together constructively to disassemble this troubling
culture at the Interior and replace it with a strong
sustainable culture of ethics, responsibility, and
accountability. This concludes my formal testimony. Thank you
for the opportunity to appear here today. I'll be happy to
answer any questions you might have.
[The prepared statement of Mr. Devaney follows:]
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[GRAPHIC] [TIFF OMITTED] 38580.020
Mr. Issa. Thank you. And I am going to recognize the full
committee chairman first for his questions. I would only put in
place into the record a request that the minority staff attempt
to--in light of your very startling testimony, attempt to get
as many members of the minority here so they can ask questions.
I recognize that this is a unique opportunity, and with a full
committee mark-up or hearing tomorrow, I believe this is the
opportunity for people to get the facts straight. And with
that, I'd recognize Chairman Davis for his questions.
Chairman Tom Davis. Thank you.
Thank you very much for your testimony and your ongoing
oversight and investigations at the Department. I know, on page
three of your testimony, you talk about the person responsible
for directing the preparation of the leases said he was told by
those in MMS's Economics and Leasing Divisions to take the
price threshold language out of the leases; that they then took
a polygraph and passed. You then went on to interview three
people, two of whom would not take polygraphs.
Mr. Devaney. Right.
Chairman Tom Davis. Testified under oath. I mean, that's--
you can't force them I guess. Any reason why they would refuse
to take a polygraph?
Mr. Devaney. Well, I think, you know, there are some--there
are several philosophical differences of opinion about the
validity of polygraphs, and it is not unusual for us to run
into somebody who has a philosophical problem with taking one.
Chairman Tom Davis. And one refused to even make a
statement. Did he just take the fifth--plead the fifth
equivalent?
Mr. Devaney. I don't know that he actually said those
words, but he didn't provide a statement and didn't take a
polygraph.
Chairman Tom Davis. And he was named by this other person
as someone.
Mr. Devaney. Yes, the first person, the one who was told to
take it out over the period of time that's involved was pretty
unsure, but he knew it was one of these three people. But he
was unsure of which one it was, so naturally we went to all
three.
Chairman Tom Davis. And one came out clean, and the other
two, you would have to say there's still a cloud.
Mr. Devaney. I think there is arguably less of a cloud on
the person who was willing to give us a signed sworn statement.
Chairman Tom Davis. Absolutely. Absolutely.
Mr. Devaney. As you point out, Mr. Chairman, one of those
folks didn't say much at all.
Chairman Tom Davis. I think the committee will take a
further look at those individuals as we move through. I guess
the outstanding thing is mistakes get made. They get made up
here every day. I make them. The chairman makes them, but a 5-
year cover-up of something of this nature is something that no
organization should tolerate. And at a minimum, we know who
covered this up, don't we?
Mr. Devaney. Well, there's----
Chairman Tom Davis. Besides from who made the mistake or
who directed this or that, wouldn't we know who covered it up
and who didn't bring it forth to their superiors?
Mr. Devaney. I think I'd say there's a lot of blame to go
around here both in the Solicitor's Office and in MMS.
Chairman Tom Davis. Where do you put the blame for not
reporting this further up to the Secretary so things could be
at least--if the director knew, at least they would have an
opportunity to perhaps change it, make some, you know,
whatever. If they don't know about it, it's going to continue.
Mr. Devaney. As I mentioned in my testimony, there was an
associate Director of MMS that had actually made the decision
not to report it to the director, wanting to keep it sort of in
house in her----
Chairman Tom Davis. Are they still with the Department?
Mr. Devaney. Actually, she's deceased, so that's part of
the problem. We didn't have the opportunity to talk to her.
Chairman Tom Davis. OK. Was anybody fired over this?
Mr. Devaney. No.
Chairman Tom Davis. Was anybody suspended over this?
Mr. Devaney. No.
Chairman Tom Davis. Was anybody reprimanded over this?
Mr. Devaney. Not yet.
Chairman Tom Davis. I also note your frustration in terms
of how this is collected. And I guess when you're through your
report, maybe you'll have some recommendations on how you
changed the culture, and I think at that point, you noted, at
the end, I don't have a simple solution, and you're hopeful
that the Congress and Secretary Kempthorne and yourself can
work together to constructively disassemble the troubling
culture at the Interior and replace it with a strong
sustainable culture of ethics sustainability and
accountability. You think you may get more specific from that
as you approach this report with some finality?
Mr. Devaney. Yes. As I've mentioned, I've had several
conversations with Secretary Kempthorne. As a matter of fact, I
had one about this very subject the 1st day he was in office.
So I have told him that I intend to write a white paper that we
can work from and try to work together to address this systemic
problem across the Department in a way that has never been
tried before. So I'm working on that. He's waiting for me to
finish with that. And I would hope it would provide a roadmap
of how we get out of this mess.
Chairman Tom Davis. Yes, I just make it this committee's
intention when that's done to have the Secretary up here to
look for his roapmap. Remember, as the government oversight
committee, we don't have close working relationships with any
agency, which allows our ability to come in at any point
without having to worry about making friends over long-term
relations getting cozy, and so it would be our intention at
that point to have the Secretary up. I've known Secretary
Kempthorne when he was a Senator. So I'm--on occasion when he
was Governor. And now that he's here, he is a very honorable
man. I work with him on unfunded mandates, the legislation in
1995, and you know, this is an opportunity for him to turn that
around. I hope he will not let this become his problem.
Mr. Devaney. I'm very hopeful, Mr. Chairman. He is--as one
of the first things he did, he sent a message to all--he sent
actually two messages. One was about ethics. I think it was
within the first week of his tenure. And the second message he
sent was specifically to all employees that they have to
cooperate with the Inspector General's Office. So I appreciated
both of those very visible moves on his part early on. I really
do think I have a chance of working with somebody who takes
this seriously.
Chairman Tom Davis. Yes, let me just note, I'm sure you're
not the most popular guy as you walk down the corridors of the
Interior Department.
Mr. Devaney. I am not.
Chairman Tom Davis. But I would just say that this
committee, the Congress, American taxpayers rely on you to do
your job. I think you're doing it well, and it's a serious and
tough responsibility. We appreciate it. I've got one last
question: Do you resolve or have you resolved so far in your
report whether Chevron officials indeed notified MMS officials
of the missing price thresholds in 1998 and 1999 in quarterly
meetings?
Mr. Devaney. I think that question still remains a little
unclear. There was a regional MMS official that came before the
subcommittee I believe in July and testified that--I believe he
testified, I wasn't personally here--but I was told that he
remembers the meetings, but he doesn't remember the
conversation where Chevron informed him. We actually took him
from this hearing room directly back to our office and
questioned him and asked him to take a polygraph about what he
had said up here about his memory, and he passed that
polygraph. So it may be a case that he truly does not remember
something that may have been said.
Chairman Tom Davis. Thank you very much. Those are my basic
questions. I know that Chairman Issa and Representative Dent
are going to have other questions in here. As you know, we have
a full committee meeting tomorrow. So this is, I think lays a
very strong predicate for that. And, again, we appreciate your
work to date. We look forward to your completion of this report
and continuing to work with you. Thank you.
Mr. Issa. Thank you, Mr. Chairman.
Mr. Devaney, maybe I'll followup just quickly on the
chairman. In the earlier statement that I made, basically what
we said was we thank Chevron for coming forward for making us
aware of the meeting. And your investigation and our
investigation seemed to have one thing in common, which is,
even if someone really doesn't remember, what we have are
people saying something didn't happen when in fact a for-profit
company comes forward, is negotiating to pay royalties that
technically they don't owe under the letter of the contract and
says, but we brought this up repeatedly. Other oil companies
were aware of it, didn't maybe take as much action, but it
appears just normal judgment. It appears as though there's no
logical reason to disbelieve the oil companies even if we agree
that some of the employees no longer remember it.
Mr. Devaney. I think that's very fair. I think it's--we
certainly hold no opinion on--I think it is fair to say that we
will just accept Chevron's testimony at face value, and we've
polygraphed the employee, and it's probably equally fair to say
he just doesn't remember.
Mr. Issa. And I appreciate your ability to do that and your
use of polygraph and other techniques that are not available to
this committee. I also want to enter into the record just a
calculation and a form of a thank you for the work that you've
done because ultimately you've uncovered a great deal that we
otherwise would not have.
Recently, there's been the discovery of the so-called jack
discovery that has two--just two leases that fall under this
are included in this fairly vast new discovery, perhaps one of
the largest discoveries in North America. This is two out of
1,100 leases that don't have--that fail to have the thresholds
in them. We did the calculation of the estimate, the 15 billion
barrel estimate divided it of course for the actual two out of
eight that were recovered, looked at the absence of thresholds
multiplied it by the 175 million barrel otherwise volume
threshold; today's dollars, roughly 66. We took a lower dollar
than we've been experiencing, comes out to $11.5 billion of
gross revenues. The cost as I see it, and I think--you know,
this is classic back of the envelope, but the cost to the U.S.
Government in lost royalties, $144 million from just two out of
1,100 leases. So if you ever go up after spending $1 million
investigating something at the Department of the Interior again
and you ever feel bashful or shy or apologetic for spending the
money, come to this committee and we'll find you a way to get a
lot more money. Your investigation in just two out of 1,100 is
paying for the rest of your long career to come. And I don't
get to say thank you very much like that, but I really
appreciate your work.
Going into just a few quick questions, and then I want to
let Mr. Dent have his, and then we can do additional if he'd
like. You testified that once the missing price thresholds were
discovered, that there was an active decision not to notify the
management, understandably despite somebody who is now
deceased. This, this cover-up, from your experience from other
investigations, because this committee is really looking at the
reform part, what do we do going forward? Was this surprising
to you? Or would you say this is part of a culture that this
was something that nobody thought was a bad idea to cover up
and that it could happen today again if we don't change the
culture?
Mr. Devaney. Well, I've been in this town a long time, and
it never ceases to amaze me about how people somehow get
involved in a cover-up, and it ends up being worse than the
actual offense in the beginning, and there are countless
examples of that.
No, it didn't surprise me. I think this is a Department
that has eight separate bureaus. It's very bureau-centric.
They're very protective of themselves, not particularly
interested in the other bureaus. And it presents an enormous
challenge to any Secretary to sort of get a handle on all of
that. And it's almost impossible to know what's going on in one
of those bureaus on a day-to-day basis. So the idea that
somebody at an associate director level at MMS would say, ``you
know what, we're not going--we're not going to report this to
the director; we're just going to contain this and see if we
can get through this without''--because at the time I think
arguably the price of oil was much lower and maybe they didn't
have as high an expectation that there would be this kind of--5
years later, there would be this kind of a problem.
Mr. Issa. Yes. And I am only going to ask one more question
and then yield to the other two members, but I want to stay on
this point. If on that date, and this is more not just for the
IG but for anybody looking at this, if, on that date when they
were covering up or not reporting, they had gone to the
industry and said, ``we haven't hit these price thresholds, but
this is a technical error, we are way below, there's no impact
to your companies, but we'd like to make this correction.'' We
would today have a record that they at least tried to tell
companies, ``it doesn't cost you anything but here's the law,
would you please sign this amendment or correction to make it
the case,'' and we might very well not have this to deal with
at all because it would have been a mistake that was then
renegotiated at no cast to either party. That I'm guessing is
not part of the culture today at the Department of the Interior
where they'd ever consider going back and doing the right thing
because it isn't just the cover-up; it's the fact they didn't
do the right thing. They didn't try to do the right thing when
they could have gone back to Chevron and said, ``you know,
you're right in that meeting and here's the addendum we need
you to sign covering these leases.''
Mr. Devaney. I think you're right. I think the opportunity
to renegotiate in that environment as opposed to the
environment we have today is, there's a huge gulf there. And
they should have done it. But it doesn't surprise me they
didn't.
Mr. Issa. Thank you. And I'm now going to yield to Mr. Dent
and then Mr. Bilbray in that order for 5 minutes, and then
there will be a second round.
Mr. Dent.
Mr. Dent. Thank you, Mr. Devaney, for being here today.
Would you describe the extent of the accountability Interior
employees involved in the leasing process must adhere to as
contracts are finalized through the duration of a year between
the Department and oil and gas companies. And how do today's
measures of accountability compare to those in 1998 and 1999?
Mr. Devaney. I think we still have a process that's
dysfunctional. We still have in place a surname process where
so many people are signing off on it; no one person takes
ownership. Most of the people in the surname process are
relying on staff to tell them whether or not to sign a
document. Each of them, each of the components of MMS are
looking at their own individual pieces and not necessarily at
the pieces of the other half or the other third of the
equation. And then we have the role of the Solicitor's Office,
which, quite frankly, this is another area where I wasn't
particularly surprised, where the Solicitor, he or she feels
that they're only looking at these documents for legal
sufficiency, and the client, MMS or National Park Service
actually thinks they're doing a lot more than that. So we have
this sort of dysfunctional relationship between the client and
the Solicitor as they don't understand what their roles are.
And so you have no one person responsible, and the client and
the Solicitor not understanding what each other's roles are. It
was like that then. It's like that today.
Mr. Dent. Thank you. Thanks for that explanation. What the
Interior Department official, as has been discussed here,
expressed, the reason for the mistake in these leases is that
the right hand simply didn't know what the left hand was doing.
Can you describe their visions that have been made in the
internal communication and managerial systems to prevent a
similar mistake or incident?
Mr. Devaney. My honest belief is none.
Mr. Dent. Wow. None.
Mr. Devaney. I'm sorry to be--I'm sorry to be facetious.
Mr. Dent. I understand. That's disconcerting to say the
least. With respect to Chevron's recent discovery in the gulf,
is there a possibility that they're going to be dismissed from
any royalty payments? And if so, how much revenue will the
government lose in such payments?
Mr. Devaney. Congressman, I really--we really did not look
at--it's so recent the discovery and such a revelation, we
really didn't look at it with respect to this investigation. So
the only thing I know is what I've heard thirdhand. I think the
people that are appearing before the committee, the full
committee, tomorrow would have a better handle on what that
might mean.
I will tell you that I think certainly there are pieces of
this new find that appear to be without the price thresholds on
them, and whatever the production ends up being probably will
determine how much money is actually lost, and we're not at the
point where that can be assessed at the moment, but there's
going to be an impact.
Mr. Dent. Thank you and I'll yield back to the chairman.
Mr. Issa. Thank you, and the record will show my $144
million estimate, but you're welcome to put your own into the
lottery on this.
With that, I recognize our newest member but not a new
member to the energy business, Mr. Bilbray.
Mr. Bilbray. Yes. Thank you, Mr. Chairman. Mr. Devaney, my
question really is sort of reflective of where the public's
perception is right now, is really skeptical on all of us here,
and this one is just an open sore that's just asking--can I
sincerely tell my constituency that this was not a--there was
not criminal intent or any criminal involvement or activities
as you know it besides people being felony dumb?
Mr. Devaney. I have I think a well deserved reputation of
trying to answer that question first, and I am always--because
my background is criminal enforcement for 30-odd years. I am
satisfied right now that there isn't anything that would allow
us to take this case to a U.S. attorney.
Mr. Bilbray. So you're telling me that you just cannot or
have not found anything that indicates personal benefit or any
ties with the beneficiaries between the decisionmakers and the
administration and those who were able to have a huge windfall
based on this.
Mr. Devaney. While our investigation is not done, absent a
very unexpected event, I think I can make that assurance to
you.
Mr. Bilbray. I also have 20 years in local government on
the administration side of this thing, and all I can imagine,
if I was--while I was mayor or chairman of the county, if this
had come up, they would have just hung and dried me out long
before the election would have ever come around. I think this
is one where, Mr. Chairman, I would hope that we not only find
who's to blame and how the system broke down but what possible
way we could have a restructuring to avoid those problems in
the future.
I yield back at this time. We're going to do another round.
Mr. Issa. Thank you. Boy, you know, it is so--it is such a
pleasure to have somebody who has been working sort of
different sides of the same coin, but seeing that there's a lot
of tarnish on it, let me--let me try to get a bright side to
this if I can. Are there any heroes in this process? Is there
anybody that stood out, that stood up and said, boy, this
sucked, and I need to tell you about it? Were there people who
came forward that were not part of that culture of the Ds, the
denials, and the delay and so on?
Mr. Devaney. Yes. As a matter of fact, there is a hero
here, at least I view him so far as a hero. And there was an
economist by the name of Sam Fraser that was working on these
leases in February 2000. Actually, on February 17, he
discovered this problem, and to his credit, he immediately
spread the news throughout the MMS at his level, and there
was--there were some new leases that had sales that were going
to take place in the near term, and addendums were sent out
immediately based on his discovery. I'm not sure that decision
was made at any higher level than in that particular region,
but I would consider that--the action of those sort of lower-
level folks at MMS when they--when they discovered it, they
took immediate action.
Mr. Issa. Thank you. I'd like to go to one area that I am
particularly concerned about. To what extent was the
Solicitor's Office involved in the absence of price thresholds
in the governing regulations?
Mr. Devaney. Well, the same Solicitor attorney was involved
in both the drafting of the regulations and the review, the
final notice of sale, in 1996, 1997.
Mr. Issa. And that's Mr. Milo Mason?
Mr. Devaney. It is.
Mr. Issa. We've had him before the committee.
Mr. Devaney. Yes, he also acknowledged to us that he knew
of MMS's policy decision to include price thresholds. An MMS
official told us independently that he had earlier admitted to
him that he should have caught the omission in the final notice
of sale because Mr. Mason told us that his surname on the final
notice of sale was to ensure its legal sufficiency and ability
to withstand a lawsuit, not to ensure that MMS policy decisions
were adequately covered, and this goes to my earlier statement
about a failure of the client and the attorney to understand
what each--each role is.
Mr. Issa. Well, I am not that old, but I am getting older
all the time. And one of the life experiences I had in my
dealings in Asia was that people sometimes said, well, you
know, you can't count on the Asians; they tell you things are
going to happen, and they don't happen. This was true in
Taiwan, in China and even in Korea. I said, ``Why?'' They said
they always said, ``Yes,'' and it doesn't happen. I learned
fairly quickly that, yes, they say ``Yes'' because they are
saying, ``Yes, I hear you, and I understand you.'' And if you
make a fair followup question, they are incredibly truthful,
honest. Don't ask me, ``Will you deliver on this date?'' Ask
them one more, ``Will you deliver on that date, and is that
date good?'' And next thing you know they're telling you about
the problems and the likelihood of not meeting a deadline. Is
this really the way that the Solicitor's Office works, that,
from what you can see, Mr. Mason, basically says, my job is to
say, ``This contract is in front of me, therefore, I put my
signature on it;'' not that ``This contract is effective and
proper and all those who sign it, all those signatures that
follow should rest confident that it's correct?'' Is it really
that kind of a culture?
Mr. Devaney. Yes. And we have heard this time and time
again. Every time we get into something that has gone wrong at
Interior where the Solicitor's Office has been involved, when
we inevitably end up talking to the Solicitor involved, that is
always what they say. So it, once again, it wasn't a surprise.
Oftentimes, Solicitor to legal opinions at Interior turns out
to be a checkbox along with a signature or set of initials. The
focus is always on legal sufficiency, withstand a lawsuit, not
necessarily what's best for the American public.
I must say that I've had some fairly encouraging
discussions with the new acting Solicitor about who the client
is. I take the view that among the clients is the American
people, and quite frankly, I think there has been a culture at
the Interior that has suggested to the folks working at the
Solicitor's Office that the client is the particular bureau
that they're working with and whatever the client wants done,
their job is to find a way to do it, regardless of whether or
not that is in the keeping with the spirit of the law or
regulations or policies that the Department has. And I also
take the view that the more transparency of the process, the
better. And we've had occasions where the Solicitor's Office
has crafted documents which would literally take Houdini to
figure out what was going on. So, yes, we've heard this before.
Mr. Mason's comments are not an aberration. He's part of a
culture. Once again, I am encouraged by the conversations I've
had with the new acting Solicitor and hopefully that will turn
out to be a productive exchange.
Mr. Issa. This is probably a tough question that takes both
your experience and your interviews with the Solicitor; do you
believe the absence of price thresholds could have been or were
the direct result of legal advice rendered by attorneys in the
Solicitor's Office? And I ask this question because we were
told by the Solicitor that everything was done orally. You
today have pretty well told us that there's not much of an
email trail, that in fact they wandered back and forth down the
hallways to make decisions and never codified them with any
kind of a memo.
Mr. Devaney. That is a--once again, not an unexpected find
on our part. When we hear about a legal opinion, the first
question we've learned to ask now is, ``Show it to us'' because
we've learned in the past through past investigations that
legal opinion is often an oral opinion. In this particular
case, I don't think there is any written record of having
rendered any sort of an opinion in this matter. And that's a
problem. That's a real problem.
Mr. Issa. I'll ask two more questions, and I'll yield back
to the gentleman from California.
Did you find an attorney within the Solicitor's Office that
would take some level of ownership of these oral opinions, or
was it pretty much it all went back to Milo Mason?
Mr. Devaney. Well, Milo Mason had supervisors. My
understanding is, their testimony and their conversations with
our investigators is, while we only--we assumed that he had
done his review, and we just signed off on them. So it's just
one of those deals where it kind of flows down the hill, and
Milo is sitting at the end of that chain, but he didn't--I
really--I really am troubled by his role in this matter.
Mr. Issa. Followup on the same thing, and I'm going to
finish on Mr. Mason and then yield. When he was before this
committee, he said something which I found somewhere between
interesting and disturbing. And in light of what you said about
the culture and the question of, who do I work for, am I in
fact a fiduciary to the American people or to some particular
boss, he made a statement in that--in how these things, the
thresholds, got omitted that this was policy, and at the time,
he was sort of saying, ``Well, it's policy that it was going to
be here, not here, and it was policy here, not here, because it
wasn't really for sure because if it was for sure, it
absolutely would have been here and nobody would have cared if
it was in both places.'' Do you think that policy would trace
back to this idea that maybe some people just weren't that keen
on the thresholds or there was a less important--and his
client, as he viewed it, may not have been that interested in
it being in there?
Mr. Devaney. I think actually the client assumes that more
is happening when the Solicitor looks at it than actually is.
It has been an argument within the Solicitor's Office and I've
had that argument with previous Solicitors about--and previous
Solicitors have told me our position is, we don't make policy.
And I concede to them that they shouldn't be making policy.
However, I think there is a certain amount, as you suggested
earlier, of due diligence that any attorney needs to have to
ask that next question and not simply to accept at face value
that, here it is, just please sign off on it. As sort of a road
exercise, I would like to see a process where certainly
Solicitors are not setting or making policy for the Department
of Interior but that they understand that the policy of the
Department of Interior or MMS was to have price thresholds in
there, and if they're not in there, call it to somebody's
attention.
Mr. Issa. Now I come from 20-plus years in the private
sector, so I've employed a lot of attorneys. I've never had
occasion to sue my own attorney, but I have known people who
have had occasion to sue their attorney for malpractice. If, in
fact, I ever relied on an attorney to prepare a legally binding
document, such as a lease, and it was simply insufficient, it
would not be anything other than a normal malpractice case
where you'd go to your attorney and say: ``My losses are the
result of your malpractice; therefore, they are your losses.''
Realizing these government attorneys are not covered by
malpractice insurance, but would you characterize this failure
in a government equivalent as malpractice?
Mr. Devaney. Well, I don't do that ever, but what I do do
is, oftentimes, in the wake of one of our investigations, the
bar, the association which holds that in which the person we're
talking about has a license, comes to us and we often cooperate
fully with their inquiries, and in this particular case, it's
the D.C. bar, and we've worked with them a lot in the past, but
I don't--I don't actually ever say that malpractice has
occurred. I use other words.
Mr. Issa. So this is a decision for the D.C. bar, but this
is not inconsistent with past investigations that might have
led to a reprimand or other actions against an attorney.
Mr. Devaney. Exactly.
Mr. Issa. Thank you, and I'd again recognize the gentleman
from California, Mr. Bilbray, for his second round.
Mr. Bilbray. Thank you, Mr. Chairman.
Just very quickly, I think we all agree that of all the
government agencies that are frontloaded to maintain the public
trust and rely on the trust, holding the public's resources in
trust, the Interior should be the experts in it. Wouldn't you
agree? I don't think any other department there has been
historically so much oversight. And even if it's--I mean
everything from our public lands to Native American resources
and everything else, the concept of being the trust holders is
not new to this Department.
Mr. Devaney. No. You're exactly right, Congressman.
Literally, with the exception of money, everything, anything
anybody else would ever want is at Interior. Oil, gas and coal,
water in the west, grazing rights, Indian gaming, huge contract
in grant programs and very lucrative inceptions at our national
parks and fish and wildlife refuge. So, literally, this
Department has had for 150-odd years the fiduciary
responsibility that's attendant to all those things, and they
should be able to do this right.
Mr. Bilbray. And so you know the fact is because the people
in the United States have put so much trust in this Department,
that it would administer the trust in an appropriate way. This
kind of report is very, very disconcerting. I just ask, when we
get into it, would you recommend, with this kind of policy of
this type of attitude, would you recommend that your
grandchildren's trust be managed by these people?
Mr. Devaney. Personally, no. Absolutely not.
Mr. Bilbray. You don't make--you don't decide; you don't
cite malpractice, but let me just say, with this policy and the
way it was managed, you not only would not want your
grandchildren to have their trust managed by these guys, I
would ask, you don't disbar and you don't do malpractice, but
do you see enough justification here that this is something
that you would think in fairness should be referred to the D.C.
bar for review?
Mr. Devaney. You know, they are not bashful at coming to
us. They pay an awful lot of attention to my reports, and it is
their practice, I believe, to check my Web site on a regular
basis, and they're in--they're in regular contact with us. It
would not surprise me if we issue a report which has--which
criticizes the role of any Solicitor in this matter, that they
come to us, and we will cooperate with them.
Mr. Bilbray. Mr. Chairman, in closing, I would just like to
say I appreciate the testimony. I just think we have to
understand what's at stake here. It is not the money. It is the
total destruction of the trust by of the American people. If
this is happening here, how do we know it's not happening
everywhere else in every other--because this is the department
that the American people have put their heritage in so many
ways on the line and trusted these people to administer it. And
with this, this breach that we saw in 1998, 1999, it just
really plays into those people--the hands of the people who
always say that there is no credibility in the ability of the
Federal Government to manage the public assets. And I'll tell
you, as a mayor, there would have been--there would be people
hanging from trees in cities and counties if you had this
happen in the local government. And I will use that term and
some people may be appalled by it, but frankly, some of us may
think that attorneys would look good hanging from the trees
when they've committed this kind of violation of a trust. So
with that more-than-subtle approach, I will yield back my time.
Mr. Issa. Thank you. You've been very generous with your
time. I'm just going to ask, very quick, one more question and
comment and then close. Thank you.
First of all, with one exception; will you agree to come
back after your report is finalized.
Mr. Devaney. Sure.
Mr. Issa. I look forward to that.
I've got to ask, your office has reviewed the testimony and
you, I believe, personally reviewed the testimony of the
Department employees that have previously spoken before under
oath before this committee; is that true?
Mr. Devaney. Yes.
Mr. Issa. Do you find--and you don't have to name names in
the first round--but do you find any of the testimony to be in
doubt or untruthful that was given before this subcommittee?
Mr. Devaney. No. But basically, I mean, I wasn't there
personally, but we've had people literally in all of your
hearings--we will have somebody at tomorrow's hearing--and we
look for that and we haven't found that yet.
Mr. Issa. And if you find it in the future, I trust that we
would know about it sooner.
Mr. Devaney. You will.
Mr. Issa. I appreciate that. Now, again, this is sounding a
little folksy, but I was a young Army lieutenant one time, and
another young Army lieutenant in the mid-1970's went out on a
unit maneuver, and one of those soldiers lost a weapon, left it
in the wrong place, and it didn't get reported for several
hours. And when it was reported, they went back to the field
and searched and searched and didn't find it. It was found a
couple of days later. That lieutenant was relieved for that.
The lieutenant didn't lose his weapon, the sergeant didn't lose
his weapon, a young enlisted man lost his weapon and then it
was found. That's the level of accountability that I was
brought up with as a lowly second lieutenant in the U.S. Army.
What disciplinary action would you recommend for a mistake
like this one, including the delay and the cover-up that costs
the American people billions of dollars?
Mr. Devaney. Well, I would be unlikely not to recommend
disciplinary action when the loss to the American taxpayer is
so high. But that decision is usually made after the report is
complete, and I would normally include that in my transmittal
letter to the Secretary. But this is an egregious loss of
revenue to the American taxpayer, and in situations like this
in the past I have made strong recommendations for disciplinary
action, where appropriate.
Mr. Issa. Thank you. And I want to, once again, thank you
for being here and for your testimony. Clearly the Department's
culture must be changed, and the organizational structure is
something that the full committee should address in the hearing
tomorrow.
The failure to carry out our departmental policy and
include price thresholds in all leases need never have
happened. Leadership in the Department must step up and fix
this problem. The American people now know that there are more
than 10 billion good reasons why we must have these changes.
Mr. Devaney, we'll hold the record open for any additional
items you choose to put in the record for 2 weeks, which will
give you the benefit of seeing what happens tomorrow and still
putting it in today's record. It's one of the miracles of
Congress.
I once again thank you for your good work, and I look
forward to working with you later and in the next Congress to
reform the Department of Interior. And with that, the hearing
is adjourned.
[Whereupon, at 3:33 p.m., the subcommittee was adjourned.]
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