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The Justice Department has begun two criminal investigations into the Interior Department�s Minerals Management Service, which is already the focus of several inquiries into its collection of royalties for oil and gas produced on federal property.
The new investigations are still in the early stages, said Congressional officials who were briefed this week by Earl E. Devaney, the Interior Department�s chief independent investigator.
The investigations are an unexpected development in what has already become a broad examination of the Interior Department�s oversight of companies that pump more than $60 billion worth of oil and gas each year from publicly owned land and coastal waters.
One Justice inquiry involves Interior Department officials in Denver who manage the government�s fast-growing program to collect �royalties in kind,� which are royalties in the form of oil and gas rather than in financial payments, people briefed on the investigation said.
That investigation is being run by the Justice Department�s Public Integrity Section, which examines suspected criminal violations by federal employees. The focus of the second investigation is unclear, but it is being conducted by the inspector general with help from the Federal Bureau of Investigation.
Mr. Devaney, the department�s inspector general, is already conducting two other investigations into suspected mismanagement of the minerals agency. And just last week, he issued a scathing criticism of the agency�s system for auditing oil and gas royalty payments.
Mr. Devaney is also finishing up an investigation into how the Interior Department signed 1,100 oil and gas leases in the late 1990s that inadvertently permitted companies to avoid up to $10 billion in royalties over the next five years. The errors were made during the Clinton administration, but people briefed on Mr. Devaney�s investigation said he had concluded that high-ranking agency officials either knew or should have known about the problem at least two years ago.
In 2005, the Interior Department collected about $3 billion worth of royalties in oil and gas � about a third of the total. The government funnels much of the oil it receives to the Strategic Petroleum Reserve, but it sells virtually all its natural gas and sends the cash to the Treasury.
Congressional officials briefed this week by Mr. Devaney said he had cautioned that both of the criminal investigations would last several more months. Mr. Devaney said it was possible the investigations would not lead to criminal charges, though he suggested that they should at least lead to disciplinary actions.
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