The Interior Department has hired three Washington area consulting firms to help the government collect royalties from the 18,000 companies and individuals who hold oil, gas or other mineral leases on federal and Indian lands. The move is part of a drive by Secretary James G. Watt to prevent fraud in the much-criticized royalty program.
According to an investigative panel appointed by Watt in July, the government was cheated out of $650 million in royalties in 1981 by leaseholders who under-reported their earnings to the U.S. Geological Survey, which collects the royalties for the government.
Watt's panel, the Commission on Fiscal Accountability of the Nation's Energy Resources, will formally present its findings on Thursday. Its report contains 60 recommendations, including creating a separate royalty management office outside USGS and increasing the government's share of lease production from 12.5 percent to 16.67 percent. The panel's biggest barb is reserved for USGS, which panel members said simply acted as a bookkeeper for the oil and gas industry and rarely reviewed leaseholders' earnings.
The local consulting firms--American Management Systems Inc. in Arlington, the Mitre Corp. in McLean and International Business Services Inc. in the District--are being hired to computerize the names of leaseholders and design an accounting system to double-check information from leaseholders.