Oil and natural gas leases signed in 1998 and 1999 failed to include a provision that would have triggered royalty payments if energy prices rose above a certain level. The government has already lost $1 billion in royalties thanks to the error and could lose up to $10 billion if it is not corrected.
"It's a mess, and anybody in a leadership position is at some level responsible for a mess that occurs on their watch, but this particular mess started before Johnnie Burton was in office, and she was not well served by career staff that were involved," Devaney said.
The inspector general found that MMS staff knowingly omitted the language from the leases, but that it was a mistake and not an act of malfeasance. Devaney also found that Burton knew about the problem as early as 2004. Burton testified that she does not recall being told about the problem until late 2005 or early 2006.
Devaney said that while the error was a "jaw-dropping example of bureaucratic bungling" on the part of staffers, Burton should have taken command of the issue as soon as she heard about it. "Although the career staff did not go way out of their way to indicate to her this was a major problem, I would in honestly say she should have dealt with it in a more robust way," Devaney said (Noelle Straub, Jan. 24). -- EB
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