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Project on Government Oversight




Kerr-McGee Fined Nearly $23 Million in Penalties for Underpaying Royalties

September 22, 2010 


After almost seven years of fighting, former Minerals Management Service (MMS) auditor Bobby Maxwell has won his false claims suit against Kerr-McGee Oil and Gas.

As an auditor, Maxwell raised concerns about Kerr-McGee's gross underpayments of royalties owed to taxpayers—his estimate at the time was over $10 million—only to be rebuffed and retaliated against by his supervisors. He lost his job after making his allegations public and is now retired in Tennessee.

To learn more about Mr. Maxwell's courage, check out PBS NOW's excellent story, and our oil resource page for a better understanding of the cozy relationships between the Department of the Interior and industry that he had to fight in order to prevail.

Then-Congressman Rahm Emanuel's 2007 statement on behalf of Mr. Maxwell makes a compelling case for the need to protect patriotic whistleblowers:

I regret that Mr. Maxwell had to lose his job to expose the greed of this company and the failures at MMS, but his story is a positive one. Both he and the federal government will benefit from his diligence and service. Kerr-McGee will have to pay significant penalties as a result of underpayment and false statements in their royalty reports. Additionally, Mr. Maxwell is not alone-three other auditors from MMS have filed whistleblowing cases against companies that the Interior Department blocked them from investigating.

Madam Speaker, Mr. Maxwell and these other dedicated public servants deserve our recognition and gratitude. They have stood up and declared that the public's trust and money both deserve our attention, respect, and protection. I ask my colleagues to join me in thanking Mr. Maxwell and congratulating him on a job well done. Let us follow his example by continuing to put accountability ahead.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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