Duke of Oil

He took on big energy companies and won. So why did the feds fire him?

He says he offered to transfer to Houston at his own expense as part of an office restructuring, but was refused: "They made an example out of me."

The MMS has denied retaliating against Maxwell. Spokesman Pat Etchart says that while the agency may have fewer auditors than it did a decade ago, the change is due to a number of factors, including overall staffing cutbacks and more monitoring duties being assumed by individual states and Indian tribes. "We can always use more resources, but we're focusing on getting more funding to the states," he says. "It's a matter of being more efficient."

These days, the agency is also taking more of its payments in RIK, or royalties in kind -- actual crude oil or natural gas shipments, which are added to strategic reserves or sold to other companies. The RIK program has been sharply criticized by environmental groups because of various exemptions involved for oil companies drilling offshore, and the General Accounting Office found that some pilot programs were money-losers. But Etchart says the program allows for prompter royalty collections and less overall wrangling. "There's no debate about the proper price," he notes.

Crude rebuke: Bobby Maxwell helped collect $500 
million in oil royalties for the government but says 
more is owed.
John Johnston
Crude rebuke: Bobby Maxwell helped collect $500 million in oil royalties for the government but says more is owed.

Maxwell says that royalties in kind are a good idea -- in theory. "If we have the expertise to market it and get a fair price, that's probably a better way to go," he says. "You don't have to worry about issues like the Kerr-McGee case."

Thanks to his settlement with the government, Maxwell can now devote his attention to Kerr-McGee. It's not often that one man is in the position of taking on Big Oil, but a qui tam action filed by a former oil-and-gas employee in the 1990s resulted in a $400 million settlement. That, too, was a case that MMS auditors had been specifically instructed to let go.

Maxwell no longer has the agency to tell him what not to do. "We're moving forward," he says. "We're getting ready to start depositions. They've given us 30,000 documents so far. Fortunately, I have time to work on it now."

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