Interior Secretary Ken Salazar announced Wednesday that the department is ending the "royalty in kind" policy that allowed energy companies to pay royalties for drilling oil on federal land in oil or gas instead of cash. The policy drew fire after a Government Accountability Office audit revealed the government had lost at least $21 million by failing to collect in-kind payments it was owed.
The Interior Department's inspector general "issued a report last year describing a 'a culture of substance abuse and promiscuity' over a five-year period at the Denver-based office of the Minerals Management Service, which deals with royalty-in-kind payments," Jim Tankersley and Alexander Hart of the Los Angeles Times report. Allegations included cocaine use and sex with industry contacts. The audit includes one instance where a a firm had avoided making any payments for more than two years by disputing its $900,000 bill. (Read more)
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