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Office of the Secretary
December 18, 2007
Contact: Chris Paolino (202) 208-6416
Frank Quimby (202) 208-7291

Independent Study Panel Reports Findings on Interior's Mineral Royalty Revenue System

Panel Co-Chairs Kerrey and Garn Issue Joint Statement

WASHINGTON, D.C. – The Department of the Interior was notified today that an independent, bipartisan panel charged by Secretary of the Interior Dirk Kempthorne with reviewing Interior’s mineral revenue collection program has forwarded a detailed report on its findings and recommendations to the Department’s Royalty Policy Committee.

“Nine months ago I urged this special panel to conduct a full and candid assessment of the Department’s mineral revenue management system,” Secretary Kempthorne said. “The panel was given a free hand to scrutinize all key processes, from production accountability and royalty collections to audits, compliance and enforcement.

“Under the able leadership of former U.S. Senators Bob Kerrey and Jake Garn, this bi-partisan panel has developed an extensive public report to meet that mandate,” Kempthorne said. “I thank the panel members for their commitment and candor, assure them that their recommendations will receive the most serious consideration, and look forward to the Royalty Policy Committee’s review and guidance for improving Interior’s mineral royalty management.”

The panel carried out its activities as a subcommittee of the Royalty Policy Committee.

Co-Chairmen Kerrey and Garn provided the following joint statement on the report:

“The Subcommittee’s report is the result of a comprehensive analysis of the federal mineral resource management program in the Department of the Interior. The program is a major source of revenue to the U. S. Treasury, providing more than $11 billion in 2007.

“Over the past few years, there has been considerable controversy surrounding the program. The Congress has raised concerns about inadequacies in the mineral leasing and revenue collection processes. Within the Department of the Interior, the Inspector General has investigated allegations of ethical lapses of personnel in the royalty in kind (RIK) program. We believe the RIK program is an extremely important component of the royalty management program and the recommendations in this report are geared toward ensuring its survival.

“The Subcommittee’s report makes over 100 recommendations for improvements in the mineral resource management program. Most of these recommendations can be implemented administratively. Many can be done quickly. Some will require long term effort and continued vigilance. A few of the recommendations depend upon legislative action.

“The Federal employees who work in the mineral leasing and royalty collection program are conscientious, hard working, and concerned about the reputation of the program and of the Department of the Interior. We believe that implementing the recommendations in this report will greatly strengthen the management of the program, will restore public confidence, and will ensure maximum value for the U.S. taxpayer.”

In addition to Co-Chairmen Kerrey and Garn, the seven-member subcommittee includes Vice Chairman David Deal, and members Cynthia Lummis, Perry Shirley, Robert Wenzel and Mario Reyes.

The report will be reviewed by the 20-member Royalty Policy Committee at its January 17, 2008 meeting before being transmitted to the Secretary. Chartered under the Federal Advisory Committee Act, the Royalty Policy Committee advises the Secretary of the Interior and other Department officials responsible for managing mineral leasing activities.

The Committee, whose meetings, decision-making processes and other activities are open to the public, also serves as a forum for states, tribes, individual Indian mineral lease holders, industry, government agencies and other stakeholders to voice their viewpoints and concerns on pertinent mineral leasing issues.

For additional information, please contact the subcommittee’s executive director, Larry Finfer, at 202-208-5978 or via email at Larry_Finfer@ios.doi.gov.

The report is online at the following URL: http://www.mrm.mms.gov/Laws_R_D/RoyPC/PdFDocs/RPCRMS1207.pdf

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