A federal jury has ruled that the Kerr-McGee oil company cheated the United States out of millions in royalty payments for pumping oil from public lands, the New York Times reports.

The suit against Kerr-McGee was brought by a former Interior Department auditor who sued on behalf of the U.S. government. The agency blocked his efforts to rectify the misdeed while he was employed there; he was later fired as part of a "reorganization." Even after he filed the suit as a private citizen, the department sided with Kerr-McGee, insisting the case had no merit.

The company was bought by Anadarko Petroleum last year. Kerr-McGee has given over $260,000 to political organizations during the Bush administration, nearly all of it to Republicans; Anadarko has given over $200,000, all to GOP groups, according to opensecrets.org.

The Justice Department, the FBI, the Interior Department's own Inspector General and Congress have launched a barrage of investigations into how the agency has mismanaged the nation's oil and gas resources in ways that appear to have benefited the energy industry to the tune of several billion dollars.

Thanks to the Project on Government Oversight (POGO) for following this closely; visit their blog for more information.

Uh-oh. The Interior Department's internal watchdog says top officials at the agency knew about problems costing taxpayers as much as $10 billion in revenue, but tried to hide the problem from the public, according to Congressional Quarterly's Jeff Tollefson.

One official may even have lied to Congress about when she knew things were screwy with her agency's energy contracts, which have allowed companies like ExxonMobil and Shell to pay billions less than they should have to extract oil and gas from federal lands, CQ reports:

A much-anticipated report to Congress will allege that Interior Department officials covered up a problem with oil and gas leases after it was discovered in 2000, according to congressional aides.

The Interior Department inspector general (IG) also has been investigating whether Johnnie Burton, head of the agency that collects royalties, might have been told about the problem earlier than she said in congressional testimony last fall.

Justin wrote last week about the Interior Department's Minerals Management Service, where a melange of incompetence and corruption will have investigators sorting things out for a long time.

Two investigative reports are apparently coming which will provide more details on how the department managed to give billions away to Big Oil via a gaping loophole:

Meanwhile, the Government Accountability Office is preparing a report that, some lawmakers say, will blame the service's "culture" for widespread laxity in conducting royalty audits and collecting underpayments from industry. And by mid-month, the Interior Department's Inspector General will release a report showing that different units at the service working on leases didn't talk to each other and that some officials apparently signed leases without reading them.

More to come, I'm sure.

Well, not exactly. But something's rotten in the Interior Department's Minerals Management Service (MMS), and if you bury your nose in it, you can detect at least a whiff of a sex scandal.

We've kept an eye on the debacles at MMS, which sells off the country's oil and gas resources to energy companies like Shell Oil and ExxonMobil. With revenues around the tune of some $60 billion annually, it generates the nation's largest source of income, behind taxes.

In recent months, reports have exposed fraudulent contracts, lax audits, and loopholes big enough to drive a tanker ship through, which are collectively thought to cost the United States billions annually.

At last count there are six active inquiries into the program being conducted by the Justice Department, the FBI, the Interior Inspector General, the Government Accountability Office, or some combination of the four. Two other investigations have already been completed which have blasted the operation for losing the government billions in dollars and being about as dysfunctional as one can imagine.

We watched all this from a distance, not sure what it all added up to. But then, buried in the 16th paragraph of a Dec. 30 New York Times article, was this:

One person familiar with the [Justice Department] investigation [into MMS] said it originally had focused on potentially improper social ties between some of Mr. Smith's subordinates and executives at companies vying for contracts.

And we thought to ourselves, we gotta get in on this.

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