September 17, 2009

Salazar Revamps Royalty In Kind

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On Wednesday, Interior Secretary Ken Salazar announced the end of the Interior Department’s oil and gas royalty collection program. Salazar made his announcement at part one of a two-part testimony before the House Natural Resources Committee. Last week Rep. Nick J. Rahall (D-WV), the chairman of that committee, introduced legislation that would overhaul the existing federal royalty system and create an Interior agency to regulate oil and gas leasing.

Currently, rather than paying in cash for resources extracted from government lands, companies pay federal royalties in comparably valued oil and gas, which the government then sells on the open market. This system, known as Royalty in Kind, is administered by the Minerals Management Service (MMS). Last year, a report compiled by the Interior Department’s inspector general found that MMS collections fell far short of their estimated potential revenue and discovered corruption within the agency.

Back in September 2008, Mother Jones’ Josh Harkinson wrote:

So far the grand prize for depravity goes to former RIK manager Gregory Smith, who pitched the oil companies he regulated to do business with his outside consulting firm, slept with two subordinates, and bought cocaine from another RIK employee while on the job (DOJ, where are you?). Of course, last time I checked, there was also an ongoing GAO investigation, four False Claims Act cases pending against MMS in Oklahoma City, and a DOJ investigation of a Virginia-based MMS employee who allegedly traveled to Atlanta to have sex with someone he’d met in a teen online chat room who he thought was a 13-year-old girl.

Salazar’s announcement to overhaul the collection program is no great surprise given MMS’ sex, drug, and bribe-related scandal last year. At the present moment, US drilling regulations consist of a gap-filled web of EPA, BLM, and MMS legislation. The second part of Rahall’s hearing on his proposal is happening now.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

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