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Interior's problems due to 'lack of accountability,' inspector general says

WASHINGTON - Despite charges of a criminal conspiracy at the Interior Department and attacks on his own investigatory report, Interior Inspector General Earl Devaney maintained a stoic insistence Feb. 16 that the department is becoming more ethical and more accountable under Secretary Dirk Kempthorne.

He blamed Interior's long-standing problems on ''a culture replete with lack of accountability,'' on the vast sums of money that flow to Interior from its stewardship of national resources and on a handful of bad actors among Interior's more than 73,000 employees.

Devaney did not volunteer comparative percentages on the number of those unworthy employees who manage to gravitate toward Indian resources; an issue of the first concern in Indian country. (Indian tribes and individuals have relied on Interior to manage or administer their resources for more than a century.) But the example Devaney gave went straight to the heart of Indian country. Jack Abramoff, the erstwhile Republican lobbying impresario, is in prison now in part due to the criminal uses he made of astronomical fees from client tribes. Devaney implied that Interior personnel were a target of Abramoff's blandishments.

''From my office's perspective,'' Devaney said, reading from written testimony, ''I would point to the Abramoff scandal as an example of how the conduct of one or two people can cause an enormous diversion of resources, best evidenced by the commitment we have made to that investigation, with 10 agents dedicated to the case, now three years running. Since my office has had no increase in staffing levels in the seven years I have been the IG at Interior, we have little capacity to adjust for such diversions of staff.''

The big money associated with resources under Interior's control attracts bad actors, Devaney added. ''Outside of the money at the Treasury Department, everything else that someone would want is at Interior: oil, gas, mines, land and water. It's been my experience that when a lot of money is at stake, bad people will show up eventually.''

Rep. George Miller, D-Calif., raised doubts about Devaney's interpretation, pointing to the long chronicle of faults previous IG investigations and audits have uncovered at Interior. He got Devaney to agree that monetary losses identified by previous reports on Interior's activities amount to tens of billions of dollars. But he couldn't get Robin Nazzaro of the Government Accountability Office, appearing alongside Devaney at the witness table, to say that incompetent employees are a problem at Interior. The combination of missing billions and competent employees didn't add up for him.

''Department by department, the minerals management, the National Park Service, the BLM [Bureau of Land Management], where, you know, almost - it appears as if every issue has been resolved against the taxpayers of this country. Is this policy here if it's not competency?'' Miller demanded of Devaney and Nazzaro.

''I mean, the leakage that you've outlined here in both of your testimonies is just ... horrifying. And if it's not competency, it starts to look like policy or it starts to look like criminal activity. ... I really thank you both for your service and your offices' service. Apparently you're all that stands between us and a wholesale criminal conspiracy here. ... To continue to receive these reports year after year after year raises, I think, the most serious questions. ...

''I have great respect for public servants. I do not use the word 'criminal' lightly. But you cannot have this much leakage going on and this many issues resolved against the taxpayer without some intent, without doing somebody a favor. Something is very, very wrong in this department. And it's tens of billions, and it may be in excess of a hundred billion, dollars. And maybe we should add up all of your reports, because you just don't get to operate on behalf of the public in a manner that this department's been operating.''

Both Devaney and Nazzaro mentioned Indian country; Devaney to deplore the lack of staffing at Native detention facilities, Nazzaro to recommend that the BIA revise its land into trust regulations by June 30. Nazzaro also noted that GAO audits through fiscal year 2006 continued to report Interior's Indian trust funds management as ''material internal control weaknesses, and information security was reported as an internal control weakness.''

But the overall hearing was broader in its reach. Several Democratic members of the Committee on Natural Resources in the House of Representatives praised Rep. Nick Rahall, D-W.Va., the committee chairman, for holding an oversight hearing they said was long overdue. Members devoted much of the three-and-a-half-hour session to partisan repartee on how and when another Interior agency, the Minerals Management Service, managed to leave a price threshold clause out of deep-water oil and gas leases signed between MMS and private-sector oil companies. The standard clauses link oil and gas royalty payments to the rising price of oil on the theory that deep-water oil exploration is prohibitively cost-intensive. The lower up-front royalty encourages oil exploration and development; the later high royalty, paid from oil that has been found if it rises in price, in a sense recompenses the federal Treasury for value lost on national resources at the front end of the lease. But the price thresholds were left out of the leases in question, at a cost of billions of dollars in public revenue.

''Although we found massive finger-pointing and blame enough to go around, we did not find a 'smoking gun' or any evidence that the omission of price thresholds was deliberate,'' Devaney said. ''This was, however, a very costly mistake.''