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Whipping the Whistle-Blower

November 26, 2000

Thanks to some whistle-blowers and a consumer watchdog group--the Project on Government Oversight (POGO)--Washington has recovered hundreds of millions of dollars from big oil companies for underpayment of royalties on oil pumped from federal land. Surely anyone concerned about the shortchanging of taxpayers should rejoice. But not House Resources Committee Chairman Don Young (R-Alaska), who has launched an investigation--not of the oil companies but of the public-interest group and the whistle-blowers. He wants to hold them in criminal contempt for not cooperating with his witch hunt. This Congress has more important business to conduct when it meets in its lame-duck session. It should drop the investigation and instead direct its probe at America's big oil rip-off.

The oil companies ended up paying more than $483 million to settle lawsuits brought by two former Arco oil traders, POGO and others. The investigation into their practices also led to changes in federal rules on pricing the oil from public land that could increase future royalty payments by at least $66 million a year. That's good news for California, which annually gets nearly $10 million of the overall oil royalties, money that goes to schools and community colleges.

But rather than going after big oil, Young's committee pounced on the whistle-blowers, initiating an investigation into activities going back to the 1980s and threatening them with criminal contempt for resisting. The panel's reasons changed as old allegations proved groundless. The ostensible cause for action is POGO's decision to share part of the $1.2 million it received from the settlement with two government officials who had helped in uncovering the royalty matter. That might have violated laws barring government employees from receiving outside payments, and the Justice Department is investigating. But POGO had made no secret of sharing the money, acted according to advice of its own lawyers and says it is fully cooperating with the government investigation.

The committee, by contrast, conducted the probe like an inquisition, issuing subpoenas without telling the minority Democrats, demanding reams of documents unrelated to the case and barring witnesses from testifying. Rep. George Miller (D-Martinez), the committee's top Democrat, called it a vendetta, and even some Republicans were concerned that the probe creates the image that "we're being nice to big oil."

The problem with the oil companies shortchanging the government may well be just the tip of an iceberg. Charges of natural gas underpayment, now a subject of litigation, may uncover an even bigger misuse of public funds. These are the public-interest issues Congress should be looking into.

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