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Energy
The DOI manages lands, subsurface rights, and offshore areas that produce approximately 19 percent of the Nation’s energy. The management and regulation of the development of natural resources from lands and waters under DOI jurisdiction directly contribute to our Nation’s economic health and security. Energy-related operations under Federal jurisdiction also impact the health and safety of industry workers, Federal regulators, waterways and water resources, wildlife, and public lands.
An average of $9.1 billion was collected annually between 2015-2020 in energy-related revenue for States, Indian mineral interest owners, and the public. The Office of Inspector General identifies risks and potential fraud in the Department’s energy, mineral, and revenue collection programs. In fact, we have identified energy management as a top management challenge for DOI.
Our work in this area has benefitted the public by holding violators accountable, recovering funds for victims of energy-related fraud and criminal conduct, recommended improvements to internal controls, and reduced the risk of hard to the environment and the American public.
Financial Management
The U.S. Department of the Interior (DOI) manages significant financial assets, including contracts, financial assistance awards (grants and cooperative agreements), as well as property and other resources. Within this broad area, we focus primarily on grants and contracts, CARES Act oversight, and oversight of spending under the Great American Outdoors Act.
Our work in financial management has focused on grants and contracts. Annually, the DOI distributes about $12 million in new contracts and grants. We continue to identify high-risk issues regarding pre-award processes, award oversight, and post-award monitoring. Our previous audit and investigative work found that many of these funds are at high risk of fraud and mismanagement due to inadequate internal controls and oversight over the awarding and monitoring of these acquisition vehicles.
In 2020, we added CARES Act oversight to our financial management portfolio.
An emerging priority area for us in oversight of spending under the Great American Outdoors Act. The DOI oversees approximately 20 percent of the Related Challenge Areas: land in the United States, which serves nearly 500 million visitors per year. The Great American Outdoors Act became law in August 2020. It is intended to help address the backlog of deferred maintenance (i.e., maintenance that has been postponed rather than performed as needed) at national parks, other public lands, and Indian Country schools. It is also intended to permanently fund the Land and Water Conservation Fund to support conservation of lands and waters and provide recreation opportunities.
Responsibility to Native Americans
Through the Bureau of Indian Affairs and the Bureau of Indian Education, the U.S. Department of the Interior (DOI) provides services to 574 federally recognized tribes with a population of about 1.9 million American Indians and Alaska Natives. The DOI also has responsibilities for the protection of 56 million surface acres of Indian trust land and provides education services to 41,051 students in 183 Indian Country schools and dormitories.
Our work has found that weaknesses in oversight leave federally funded programs intended to benefit Native Americans susceptible to fraud, waste, mismanagement, and abuse. Fraud and mismanagement divert funds from those in need. We will focus on preventing and detecting mismanagement of funding intended to benefit Native Americans.
Our work has also found that poor and unsafe physical or security conditions at schools for Indian children jeopardizes the safety of students and staff and could reduce the students’ ability to learn. The problems persist despite repeat audit and investigative findings. We prioritize conducting reviews that can identify problems and lead to improvements in the safety conditions in Indian schools.
Anchorage Woman Pleads Guilty to Embezzling Funds from an Alaska Tribal Organization
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An Anchorage woman pleaded guilty today to embezzling nearly $175,000 from the Alaska Native Harbor Seal Commission (ANHSC), which was primarily funded through federal grants issued by the National Oceanic and Atmospheric Administration (NOAA) and the Bureau of Indian Affairs (BIA).
The grants were intended to support tribal nonprofits in collecting harbor seal and Steller sea lion harvest data as well as conduct bio sampling to monitor the health of marine mammal populations in Alaska.
According to court documents, Joni Bryant, 44, embezzled money from ANHSC for her personal use between July 2014 to October 2016. During that time Bryant was employed as the Executive Director of the ANHSC and was responsible for managing federal grants, as well as the day-to-day financial management of the organization.
Bryant embezzled the money by using the ANHSC checking account and credit cards to make unauthorized personal purchases and cash withdrawals. The unauthorized expenditures included paying for personal travel for herself and family, personal purchases at various retail stores, gas and grocery purchases, wireless service charges and paying personal insurance and utility bills.
Bryant pleaded guilty to one count of embezzlement from an Alaska tribal organization. As part of the plea agreement, Bryant has agreed to pay restitution to NOAA in the amount of $174,290.67. She is scheduled to be sentenced on September 17 and faces a maximum penalty of five years in prison, up to $250,000 fine and three years of supervised release. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Department of Interior’s Office of Inspector General (DOI-OIG) conducted the investigation leading to the charges in this case, with assistance from the U.S. Department of Commerce’s Office of Inspector General and the Anchorage Police Department (APD).
Assistant U.S. Attorney Charisse Arce is prosecuting the case.
Oil Company Employee Indicted For Illegal Discharge, False Statements
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United States Attorney Peter G. Strasser announced that on January 15, 2021 a grand jury indicted PATRICK HUSE, age 40, of Perkinston, Mississippi, for criminal conduct related to oil extraction in the Gulf of Mexico.
According to the eight-count Indictment, HUSE engaged in criminal conduct on an oil platform known as Main Pass 310A (“MP-310A”). In July 2015, workers on MP-310A noticed a sheen on the surface of the surface of the water surrounding the platform. The sheen meant that the platform was discharging oil or other hazardous substances into the Gulf of Mexico. The workers alerted HUSE, who was a Person-In-Charge (“PIC”) on MP-310A. The workers told HUSE that they believed the sheen was the result of sand buildup in filtration equipment on MP-310A. Rather than shutting-in the platform to repair or replace the filtration equipment, HUSE ordered certain wells closed but otherwise kept the platform operating. This caused further sheening. The sheening continued for another four days until a worker finally activated an emergency shutdown device to stop the sheening. HUSE then instructed the workers to lie to federal regulators about the reason for the emergency shutdown.
The Indictment further alleges that HUSE made false statements in an inspection log kept on MP-310A by Company A, the company that employed HUSE. Federal regulations and rules required Company A to travel to and inspect an unmanned platform in the same area as MP-310A every day, and to physically board the unmanned platform for inspection at least once a week. HUSE told operators to falsely state in the inspection log that they had inspected the unmanned platform when, in reality, no such inspections occurred. HUSE also made his own false entries in the inspection records. The misrepresentations in the inspection records gave the artificial impression that Company A and HUSE were complying with federal regulations.
HUSE is charged in Count 1 of the Indictment with negligently discharging oil and other hazardous substances from MP-310A into the Gulf of Mexico, in violation of Title 33, United States Code, Section 1321(b)(3) and 1319(c)(1)(A). Count 2 charges HUSE with knowingly discharging oil and other hazardous substances from MP-310A into the Gulf of Mexico, in violation of Title 33, United States Code, Section 1321(b)(3) and 1319(c)(2)(A). Count 3 charges HUSE with failure to immediately report the discharge to the appropriate federal agency, in violation of Title 33, United States Code, Section 1321(b)(5). Counts 4 through 8 charges HUSE with making false statements in inspection logs, in violation of Title 43, United States Code, Section 1350(c)(2). If convicted for Counts 1 through 8, HUSE faces a range of imprisonment from one to ten years. Additionally, HUSE faces fines ranging from $2,500 to $250,000 per day of violation, maximum terms of supervised release from one year to three years, and mandatory special assessment fees ranging from $25 to $100. The Indictment includes a Notice of Forfeiture against HUSE.
United States Attorney Strasser stated that an Indictment is merely an accusation and that the guilt of the defendant must be proven beyond a reasonable doubt.
United States Attorney Strasser praised the work of the United States Environmental Protection Agency and the Department of the Interior Office of Inspector General, Energy Investigations Unit, in investigating this matter. Assistant United States Attorneys Spiro G. Latsis and J. Ryan McLaren are in charge of the prosecution.
Oil Company Employee Indicted For Rendering Safety Systems Inaccurate, Negligent Discharge
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United States Attorney Peter G. Strasser announced that on January 15, 2021 a grand jury indicted BRANDON WALL, age 42, of Ville Platte, Louisiana, for criminal conduct related to oil extraction in the Gulf of Mexico.
According to the Indictment, WALL engaged in criminal conduct on an oil platform known as Grand Isle 43AA (“GI-43AA”). WALL was an area foreman for the area that included GI-43AA. GI-43AA experienced sand buildup problems with its filtration systems. WALL instructed operators that worked on GI-43AA to keep the platform “flowing” instead of shutting it in to repair or replace the filtration systems. WALL also told the operators to bypass the platform’s safety systems, which would have automatically shut-in the platform. Operators on GI-43AA were aware that putting safety systems in bypass made the platform less safe and increased the risk of a pollution event.
The Indictment alleges that GI-43AA was one of most prosperous oil platforms for Company A, the company that employed WALL. In January 2018, GI-43AA discharged oil and other hazardous substances into the Gulf of Mexico. Eventually, WALL informed the appropriate federal agency about the discharge. When the regulators arrived at GI-43AA, they saw a sheen emanating from GI-43AA, indicating that the platform had discharged oil and other hazardous substances.
WALL is charged with 2 Counts. Count 1 of the Indictment, charges WALL with rendering safety systems inaccurate, in violation of Title 43, United States Code, Section 1350(c)(3) and Count 2 charges WALL with negligently discharging oil and other hazardous substances into the Gulf of Mexico, in violation of Title 33, United States Code, Section 1321(b)(3) and 1319(c)(1)(A). If convicted for Counts 1 and 2, WALL faces imprisonment from one to ten years, mandatory special assessment fees ranging from $25 to $100, supervised release ranging from one to three years and fines ranging from not more than $100,000 per violation (Count 1) and $2,500 to $25,000 per day of violation (Count 2) .
United States Attorney Strasser stated that an Indictment is merely an accusation and that the guilt of the defendant must be proven beyond a reasonable doubt.
United States Attorney Strasser praised the work of the United States Environmental Protection Agency and the Department of the Interior Office of Inspector General, Energy Investigations Unit, in investigating this matter. Assistant United States Attorneys Spiro G. Latsis and J. Ryan McLaren are in charge of the prosecution.
Oregon Woman Sentenced for Embezzling Approximately $300,000 from a Tribal Organization in Alaska
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U.S. Attorney Bryan Schroder announced today that an Oregon woman has been sentenced for embezzling approximately $300,000 from the Skagway Traditional Council, which is a federally recognized tribal organization.
Delia Commander, 64, of Oregon, was sentenced today by U.S. District Judge Sharon L. Gleason to serve 18 months in prison, followed by three years of supervised release. Commander was also ordered to pay restitution in the amount of $297,731. Commander pleaded guilty to one count of embezzlement from an Indian tribal organization.
According to court documents, from at least 2010 to 2014, Commander embezzled approximately $300,000 from the Skagway Traditional Council’s funds for her personal use. During that time, Commander was employed as the Tribal Administrator for the Village of Skagway, dba Skagway Traditional Council (“STC”), where she received $45,000 annually, plus benefits and free housing, as compensation. Commander was responsible for day-to-day operations of the tribe, including managing tribal housing, environmental and waste management, and managing finances for the STC tribal government, among other things. During each year of Commander’s tenure as Tribal Administrator for STC, the tribe received approximately $150,000 from Bureau of Indian Affairs (BIA) for operating funds.
Commander embezzled the money by using the tribal credit card to make unauthorized cash advances at casinos and other locations, and by making unauthorized personal purchases with tribal funds. The unauthorized expenditures included paying for personal travel including a trip to Hawaii for herself and a family member, online university courses, personal credit card bills, personal vehicle maintenance, and personal shopping, among other things. Over time, the Tribal Council became suspicious of Commander because of her frequent travel and lack of financial documents provided to Council members. Commander resigned from STC in 2014 without prior notice, which is when her embezzlement was discovered.
At sentencing, Judge Gleason noted that such a large amount to be embezzled from such a small organization was an aggravating factor. The Judge also noted that the system of federal funding for tribal organizations relies heavily on trust, which Commander had violated.
The Department of Interior Office of Inspector General, assisted by the FBI, conducted the investigation leading to the successful prosecution of the case.
United States Recovers $600,000 in Federal Natural Gas Royalty False Claims Act Settlement
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The United States Attorney for the District of Colorado, Bob Troyer, today announces the recovery of $600,000 as settlement of allegations that Great Western Drilling Corporation ("GWD") violated the federal False Claims Act by failing to pay money owed on natural gas produced from federal leases located in New Mexico.
Congress has authorized federal lands to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced from those leases. Each month, companies are required to report to the Department of the Interior's Office of Natural Resources Revenue ("ONRR") the amount of royalty that is due. While the lessee is permitted to deduct certain post-production costs from its federal royalty payment, the lessee is required to place the gas in marketable condition at no cost to the United States.
The Settlement Agreement resolves contentions by the United States that GWD underreported and underpaid federal royalties due from July 2010 through June 2016. During this time, GWD received a lower sales price from its third-party purchasers because those purchasers paid the natural gas processer, Enterprise Processing, for the transportation, compression, and processing of GWD's gas. GWD did not credit the United States for the portion of the price reduction that related to the Enterprise Processing costs to place the gas in marketable condition. Instead, GWD paid royalties only on the decreased purchase price. In this way, the United States contends, GWD knowingly underreported and underpaid royalties owed to ONRR.
"We don't tolerate these games, and will continue to purse, and get every dollar due from, companies that underpay royalties," said United States Attorney Bob Troyer.
Ron Gonzales, Special Agent in Charge of the Office of Inspector General's Energy Investigations Unit stated, "This settlement is the result of Federal agencies working collaboratively and diligently to ensure that revenues generated from public resources are accounted for on behalf of the American taxpayers. The OIG is committed to work with DOJ, ONRR, and our Office of the Solicitor to support the Department's revenue collection programs."
Geary Keeton, Program Manager for Enforcement with ONRR stated, "ONRR works closely with the OIG and DOJ to help ensure that we collect every dollar due the American people."
The United States Attorney's Office acknowledges the cooperation and teamwork demonstrated by governmental entities involved in today's recovery, including the Office of Natural Resources Revenue, the Department of the Interior's Office of the Solicitor, and the Energy Investigations Unit of the Department of the Interior's Office of Inspector General. The United States Attorney's Office in Denver, Colorado works closely with these offices in the pursuit of unpaid or underpaid oil and natural gas revenue, claims for which are processed at the Office of Natural Resources Revenue at the Federal Center in Lakewood.
The United States was represented in this matter by Assistant United States Attorney Andrea Wang of United States Attorney's Office in Denver, Colorado.