Big Oil May Scam Taxpayers for Millions More—Stay Tuned

by Stephanie Taylor, Sep 24, 2006

From the AFL-CIO community affiliate Working America, Stephanie Taylor brings this latest Big Oil tax scam to our attention.

High gas prices keep hitting working families hard. Oil companies have been posting record profits.

Now there’s a shocking new report of yet another way that oil companies are scamming millions from American taxpayers—while the Bush administration does nothing to stop it.

According to the New York Times, the Bush Interior Department allegedly blocked efforts by its own auditors to collect millions of dollars in royalties from oil companies—money that rightfully belonged to American taxpayers.

When companies extract oil or gas from federal lands and coastal waters, they are required to pay the government a royalty between 12 percent and 16 percent of their profits. The point is to reimburse taxpayers for the use of their land.

Interior Department auditors examine the records and receipts of those companies to make sure taxpayers receive their fair share and take steps to collect any money that is owed. From 1989 through 2001, these audits and other enforcement efforts collected an average of $176 million a year.

But the department’s own statistics show that after President Bush took office, the revenue from auditing and enforcement plummeted. From 2002 though 2005, auditors collected an average $46 million a year. That’s about $130 million less a year in the pockets of American taxpayers.

Now, four auditors are suing the Interior Department. They say their bosses stopped them from pursuing more than $30 million in royalties. Says Bobby Maxwell, one of the auditors:

The agency has lost its sense of mission, which is to protect the American taxpayers. These are assets that belong to the American public, and they are supposed to be used for things like education, public infrastructure and roadways.

In response to these allegations of fraud, what action has the Bush administration taken? None.

In fact, the Interior Department announced that it would not try to recover $1.3 billion more in royalties that the government lost because of “flawed” oil and gas leases.

As Rep. George Miller (D-Calif.) said:

If things keep going like this, we’re going to need two sets of handcuffs: one for the oil companies and one for the bureaucrats.

By the way, the oil and gas industries donated $2,596,725 to the Bush Presidential Campaign in 2004, according to OpenSecrets.org. That’s why the AFL-CIO and its allies like Working America are asking the question: “When will the Bush administration stop working for Exxon—and start working for us?”

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