Wyden, a member of the Energy and Natural Resources Committee, pointed to a news report Thursday that alleged non-political Interior auditors were overruled when they raised concerns with their superiors about schemes that involved oil companies avoiding paying royalties on oil drilled on federal land, among other allegations. Several of the auditors have since filed False Claims Act lawsuits against oil companies for defrauding the U.S. government.

Wyden earlier this week called in Interior officials, who were not able to answer his questions about the whistleblowers' allegations. Specifically, Wyden asked in how many instances the auditors were overruled in their recommendations to pursue underpayment of royalties and how many auditors' letters raising underpayment issues have been blocked by Interior officials.

Last week, the Interior Department's own Inspector General Earl Devaney released a report that said, "Simply stated, short of a crime, anything goes at the highest levels of the Department of the Interior." Devaney pointed to efforts by officials overseeing the Department's royalty audits to cover up their failure to identify millions of dollars of royalty underpayments by forging documents as an example of the Department's culture of "defending the indefensible."

The department also has been under fire from Congress, including Wyden, for its failure to address sweetheart leases signed during the Clinton Administration that could cost taxpayers up to $10 billion in lost revenue. The leases were signed at a time of lower oil prices. However, if oil prices went above a threshold price - which they have - royalty payments are supposed to be collected. The sweetheart leases omitted that provision.

Wyden advocates renegotiating all the leases and, if the companies refuse, would urge the federal government to award them no new leases. He also has introduced amendments requiring renegotiation of the leases.

In May, Wyden questioned Kempthorne about how the Secretary was going to change ethical practices at the Department. Kempthorne assured Wyden that "if confirmed, the first day that I am Secretary of the Interior I will also be sitting down with the Office of Ethics and will also discuss the topic of ethics with the employees of the Department of Interior."

The text of Wyden's letter requesting a hearing is below:

September 21, 2006

The Honorable Pete V. Domenici
Chairman
United States Senate Energy and Natural Resources Committee
364 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Jeff Bingaman
Ranking Member
United States Senate Energy and Natural Resources Committee
464 Dirksen Senate Office Building
Washington, D.C. 20510

Chairman Domenici and Senator Bingaman:

In light of the serious ethics concerns recently raised by Department of Interior Inspector General Earl Devaney, I am writing to request that the Energy and Natural Resources Committee have Interior Secretary Dirk Kempthorne testify before the Committee about what changes have been made on his watch to end the kinds of ethics failures identified by Mr. Devaney.

Last week, Inspector General Devaney testified before the House Committee on Government Reform Subcommittee on Energy and Resources that top officials at the Interior Department tolerate widespread ethics failures. Mr. Devaney testified that "[s]imply stated, short of a crime, anything goes at the highest levels of the Department of Interior. I have observed one instance after another when the good work of my office has been disregarded by the department". Mr. Devaney went on to describe a broader organization culture of denial and "defending the indefensible" at the Interior Department.

During the confirmation hearing of then-Governor Dirk Kempthorne by the Senate Energy and Natural Resources Committee, I specifically raised my concerns about the ethics violations that had occurred when his predecessor Gail Norton served as Secretary and asked Mr. Kempthorne what he would do to address this problem. I specifically asked Mr. Kempthorne whether he supported tightening the conflict of interest rules at the Interior Department. In response, Mr. Kempthorne testified "if confirmed, the first day that I am Secretary of the Interior I will also be sitting down with the Office of Ethics and will also discuss the topic of ethics with the employees of the Department of Interior."

In light of the Inspector General's findings of persistent and continuing ethics problems and Secretary Kempthorne's promise to look into these problems, I request that the Senate Energy and Natural Resources Committee hold a hearing on the Department of Interior's compliance and have Secretary Kempthorne testify about what he has done to improve the Department's compliance with government ethics standards. I further request that this hearing be held before the end of the session.

Thank you in advance for your consideration of this request.

Sincerely,

Ron Wyden
U.S. Senate