REP. MALONEY APPLAUDS ALABAMA VERDICT, URGES BUSH ADMINISTRATION TO CORRECT FEDERAL UNDERPAYMENTS

Dec 20, 2000
Press Release

WASHINGTON, DC - Rep. Carolyn Maloney(D-NY) today applauded the resolution of a lawsuit brought by Alabama against the Exxon-Mobil corporation. The jury in the case found Exxon-Mobil guilty of deliberately underpaying royalties owed for natural gas taken from Alabama waters. It ordered Exxon-Mobil to pay $3.5 Billion in punitive damages.

"I am extremely pleased that a jury decided to stop this horrible practice in its tracks. Alabama clearly showed that State auditors were being deliberately mislead - that Alabama taxpayers were being cheated. This is completely unacceptable in Alabama and across the nation. Even as oil industry profits soar, they continue to cheat the American people out of their fair share of oil and natural gas royalties. It is time for these scams to stop. I call on President-Elect Bush to continue the current administration's strong support for ongoing Federal litigation to stop the underpayment of natural gas royalties to the states and the Federal government. Before President-Elect Bush aggressively tries to open our nation's resources to more drilling, he should ensure that the Federal government and taxpayers aren't being cheated." Maloney remarked.

Rep. Maloney has led the fight to ensure that taxpayers are fairly compensated for our natural resources. In 1996, after learning that numerous major oil companies were paying royalties much below market value to the federal government for oil taken from federal property, Maloney held a hearing before a Government Reform subcommittee to look into this issue. These hearings and subsequent investigations by the General Accounting Office (GAO) led Maloney and others to conclude that numerous major oil companies were unfairly cheating taxpayers out of nearly $100 million a year in oil royalties. Many companies were sued by the federal government for deliberate underpayment of royalties. Most elected to settle and, to date, over $438 million has been collected. States and private royalty owners have collected almost $3 billion more including $17.5 million for the state of Texas and $350 million for California. The Interior Department's new oil-valuation rule - which was announced earlier this year - will save taxpayers at least $67 million each year.

Five False Claims Act lawsuits have currently been filed which allege that major oil and gas companies have systematically underpaid natural gas royalties. Believing that the Federal government may be the victim of cheating, the Justice Department has joined these lawsuits.