SEPTEMBER 1996 · VOLUME 17 · NUMBER 9
N A M E S I N T H E N E W S
SEPTEMBER 1996 · VOLUME 17 · NUMBER 9
N A M E S I N T H E N E W S
WHILE THE U.S. FEDERAL GOVERNMENT is allowing big oil companies to escape royalty payments, 13 states, three Native American nations, and numerous private land owners are taking the initiative to collect unpaid royalties owed to them by oil companies that have undervalued crude oil reserves nationwide, according to a report released in August by the Washington, D.C.-based Project on Government Oversight.
"With very limited resources, the states have done a remarkable job in aggressively going after unpaid oil royalties," says Representative Carolyn Maloney, D-New York, who spearheaded Congressional hearings on the issue in June 1996. "At the same time, the federal government has been idle."
According to the report, Alaska, California, Louisiana, New Mexico and Texas have collected significant amounts of money from oil companies for the underpayment of royalties. Alaska has collected $3.7 billion to date, the most among the states.
The Department of the Interior recently announced that it would attempt to collect $440 million in unpaid royalties from oil companies operating on federal leases in California. The Project on Government Oversight estimates the federal government is owed $1.5 billion in royalties and interest since 1960 for California alone.
"Unfortunately, the Department of Interior's announced effort, though a start, does not go far enough," says Danielle Brian, the group's executive director.
But California is only the tip of the iceberg, Brian said. "The Department of the Interior collected approximately 90 percent of all its oil royalties from federal land outside of California between 1985 and 1995," Brian says.
One senior Department of the Interior official, Robert Berman, testified in June that an abundance of evidence convincingly proves that oil companies undervalued oil produced east of the Rockies by 3 to 10 percent.
Brian estimates that as a result, oil companies underpaid royalties by the same percentage, thus potentially shortchanging the U.S. public by between $400 million and $1.3 billion in unpaid royalties since 1985.
Toying with the Law
HASBRO, INC. AGREED IN AUGUST TO PAY a $280,000 civil penalty to settle Federal Trade Commission charges that the company has engaged in deceptive toy advertising in violation of a 1993 consent order.
The FTC alleged in this case that a Hasbro commercial represented that children can operate Hasbro's "Colorblaster" paint sprayer toy and complete the multi-part stencils that come with it with very little effort.
In fact, the FTC alleged, Hasbro used a motorized air compressor during filming to provide the pressure necessary to operate the toy with ease and to achieve the results shown in the commercial.
This is the third time Hasbro has been charged with misrepresenting the performance of a toy. In 1993, Hasbro paid a $175,000 civil penalty to settle charges over its "G.I. Joe Battle Copter" and "Eco-Warrior" toy advertising. In 1978, Hasbro paid a $40,000 civil penalty to settle charges over allegedly deceptive advertising for "Digger Dog" and "Bulletman" toys.
Hasbro officials did not respond to requests for comment.
Georgia-Pacific Comes Clean?
GEORGIA-PACIFIC CORPORATION will spend more than $35 million to settle a suit alleging it failed to control the amount of pollution it poured into the air from its wood product factories in eight southeastern states, under an agreement reached with the Justice Department and the Environmental Protection Agency (EPA).
Under the settlement, the company will install pollution controls at 11 of its plants where wood products are made.
The settlement affects more facilities than any other case ever brought under a provision of the Clean Air Act.
"By limiting the amount of pollution, this agreement will help protect the environment and health of people for hundreds of miles around these plants," said Attorney General Janet Reno.
"Today's settlement fulfills the commitment we made in 1993 to protect public health from excessive air pollution from wood products plants," said EPA Administrator Carol Browner.
The settlement resolves Justice Department allegations that the company failed to obtain permits before modifying 18 of its wood processing facilities, in violation of the Clean Air Act. The settlement also covers EPA charges that the company did not accurately report the amount of volatile organic compounds (VOCs) that it emitted into the air and that it neglected to install pollution control technology at 11 of its facilities.
The agreement requires Georgia-Pacific, one of the largest U.S. producers of engineered wood products, to spend $25 million installing state-of-the-art pollution control technology at 11 of its wood product facilities.
EPA estimates that the pollution controls will reduce air emissions significantly, by as much as 90 percent at many facilities. It will reduce VOCs by 10 million pounds per year.
Georgia-Pacific spokespeople did not respond to requests for comment.
-- Russell Mokhiber