Letter to Big Oil Executives on Drilling Scandal at Dept of Interior

Chairman Edward J. Markey (D-Mass.) has launched an investigation into the growing scandal involving members of the Bush administration’s Interior Department oil division. Chairman Markey sent a letters late Friday to the heads of the oil companies involved in the scandal, probing the companies’ knowledge of the unethical dealings between oil company officials and the regulators. 

The letters were sent to Marvin Odum, President of Shell Oil; David O’Reilly, Chairman and CEO of Chevron; and Ronald Williams, President and CEO of Gary Williams Energy Corporation. (Click on Names for PDF versions).


Mr. Marvin Odum
President
Shell Oil Company
North America Headquarters
Two Houston Center, Plaza Level I
909 Fannin Street
Houston, Texas 77010

 
Dear Mr. Odum:

On September 9, 2008, the Office of Inspector General (OIG) for the Department of the Interior issued the final results of three separate investigations into allegations of misconduct by current and former employees of the Minerals Management Service (MMS), which oversees the leasing and management of our nation’s oil and gas resources. The OIG investigation uncovered multiple instances of misconduct by MMS employees.

According to the OIG reports, nearly one-third of the employees in MMS’ Royalty in Kind (RIK) department “socialized with, and received a wide array of gifts and gratuities from, oil and gas companies with whom RIK was conducting official business” and received gifts “with prodigious frequency.” Given the fact that oil and gas royalties comprise one of the largest non-tax revenue streams for the federal government and that the RIK department oversees the collection of nearly $4 billion of per year rightfully owed to American taxpayers by oil and gas companies, the discovery of these sorts of “textbook example[s] of improperly receiving gifts from prohibited sources” is profoundly troubling.

According to the OIG, employees from Shell were involved in inappropriately close relationships with Interior Department employees, including providing gifts in violation of federal law, in what has the appearance of an attempt to illegally influence the management and oversight of your company’s oil and gas activities and collection of royalty payments owed to the federal government. Therefore, I request that you or your company provide answers to the following questions by close of business on Wednesday, September 17, 2008:

1. Did any senior executives at Shell Oil Company have any knowledge, at any point in time, that Shell Oil Company employees were providing gifts to Interior Department employees or officials in violation of federal law? If so, please identify the name and position held by those senior executives.

2. Did any senior executives at Shell Oil Company direct any Shell employee to establish unprofessional relationships with Interior Department employees or officials? If so, what was the reason for those relationships? Were they in any way in an attempt to influence the management and oversight of Shell Oil Company’s oil and gas activities?

3. Were Shell Oil Company funds used directly or on a reimbursable basis to provide prohibited gifts to Interior Department employees? If so, who within Shell Oil Company authorized the use of such funds and how much was authorized?

4. Did Shell Oil Company allocate funds in advance for the purchase of gifts for Interior Department or any other Bush Administration employees or officials?

5. Please detail Shell Oil Company’s expenditures from 2002 to 2006 on lobbying Interior Department or Bush Administration employees or officials concerning the RIK program.

I look forward to your response. Should you have any questions about this request, please have your staff contact my staff at (202) 225-4012.

Sincerely,

Edward J. Markey
Chairman


cc:    Mr. F. James Sensenbrenner, Jr.
    Ranking Member

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