The Department of the Interior's Office of Natural Resources Revenue recently announced that Shell Oil and related companies have agreed to pay the goverment $2.2 million to resolve claims that the companies underpaid royalties from natural gas wells on federal and Indian tribal lands. Barely mentioned, though, is how this case -- and other related lawsuits resulting in the recovery of hundreds of millions of dollars of public revenue from big energy companies in recent years -- came to exist at all.
The settlement stems from a lawsuit filed in Texas many years ago by a man named Harrold Wright under the Federal False Claims Act, which allows private citizens to file actions on behalf of the United States against alleged defrauders -- and share in any recovery that results from the case.
And who is Harrold Wright? A spokesman at ONRR, the agency that replaced the scandal-plagued Minerals Management Service , confirms that he wasn't a government employee but a whistleblower who may have had some involvement in the energy industry. One court document describes him as a fellow who "owned royalty interests in a tract of land in eastern Texas" and began to get suspicious about underpayments for gas on his land and neighboring Indian lands.
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Things steamrolled from there. The government declined to join Wright in some of his lawsuits. But he pressed forward, and the taxpayers have been the beneficiary of some whopping settlements as a result. Mobil settled one complaint for $32 million. Chevron settled its interest for $45 million. Burlington Resources, $105 million. Shell (in a previous action), $56 million.
According to public records, Wright died in 2008, a few days shy of his 84th birthday, before many of the settlements were reached. His heirs will share in the millions, even if few people outside of east Texas have ever heard his name. But his name's worth remembering, in part because his persistence seems to illustrate a certain lack of same from the regulators who were supposed to be collecting the appropriate royalties for decades -- and failed.
"We will continue to pursue any case where companies do not follow the rules," Chris Henderson, acting assistant secretary for the DOI's Office of Policy, Management and Budget, proclaimed in a press release. But sometimes that pursuit requires a little prodding.