Rep. Conyers demands answers in Justice's oil decision

McClatchy NewspapersSeptember 23, 2008 

WASHINGTON — The chairman of the House Judiciary Committee demanded Tuesday that the attorney general provide an "immediate explanation" for a Justice Department decision that could have cost taxpayers up to $40 million in royalties from a major oil company.

Michigan Democratic Rep. John Conyers' cited a McClatchy story Sept. 12 that detailed the department’s rejection of the Colorado U.S. attorney’s recommendation to intervene in a whistleblower’s suit against the Kerr-McGee Corp.

In a letter to Attorney General Michael Mukasey, Conyers said charges that politics might have played a part in a decision favoring a major oil company "must be taken seriously and thoroughly investigated." Conyers said he wanted to question the officials involved in the case and that he sought access to all related records.

Conyers also criticized the Justice Department’s "apparent inaction in the face of growing evidence of mismanagement and fraud in the Interior Department’s oil and gas marketing program."

Justice Department spokesman Peter Carr said the department "will review the letter from Chairman Conyers and respond, as appropriate," but he shed no further light on its decision in the whistleblower case.

In his letter, Conyers noted that the Interior Department’s inspector general was frustrated that the Justice Department had declined to prosecute two senior officials of the scandal-plagued Minerals Management Service, which oversees federal oil and gas leases.

Inspector General Earl Devaney was so displeased with the department's refusal, Conyers wrote, that he pulled his investigators off a department task force examining disgraced lobbyist Jack Abramoff's influence-peddling.

"I find it highly troubling that the Interior Department’s inspector general would feel compelled to take such an extraordinary step," Conyers said, echoing concerns expressed last week by Sens. Patrick Leahy, D-Vt., and Ken Salazar, D-Colo.

Conyers said he found "troubling" McClatchy’s report that Justice Department officials in Washington had turned down a recommendation by Colorado U.S. Attorney Troy Eid and the chief of his office's civil division, Lisa Christian, to intervene in a suit filed by a former MMS auditor. The suit accused Kerr-McGee, which Houston-based Anadarko Petroleum Corp. purchased in 2006, of understating the proceeds of oil sales to hold down royalty fees paid to the government.

In January 2007, a federal jury ruled that Kerr-McGee owed $7.5 million to whistleblower Bobby Maxwell and the U.S. government, an award that’s tripled under the 1986 false claims act. Penalties also are added.

However, the trial judge questioned Maxwell's whistleblower status, putting the taxpayer recovery at risk. Earlier this month, a federal appeals court upheld Maxwell's status.

U.S. Attorney Eid told McClatchy that he didn't know who made the decision not to intervene in the suit or why. At the time, then-Attorney General Alberto Gonzales was besieged with allegations of politicization in hiring, firing and the handling of sensitive cases.

Whistleblower suits generally are less successful without the Justice Department's intervention, and if a whistleblower prevails on his own, taxpayers get a smaller share of the damages. MORE FROM MCCLATCHY

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