November 2, 2006 - MARKEY QUESTIONS INTERIOR ON OVERSIGHT OF $250 MILLION/YEAR COASTAL RESTORATION FUND

WASHINGTON, DC -- Today, Rep. Edward J. Markey, a senior member of the House Resources and Energy and Commerce Committees, sent a letter to Minerals Management Service (MMS) Director Johnnie Burton questioning the agency’s oversight of the multi-million dollar Coastal Impact Assistance Program (CIAP). The CIAP was created as part of the Energy Policy Act of 2005 (EPACT) and directs $250 million per year to fund coastal restoration projects in states that have offshore oil and gas drilling activities. Rep. Markey asks for the specific oversight procedures that MMS will put in place to ensure that funds allocated under this program are spent properly. Rep Markey’s letter comes in light of MMS and Interior’s failure to properly oversee the royalty programs, which have resulted in the loss of millions or billions of taxpayer dollars.

Rep. Markey said, “The Bush Administration’s Interior Department has a track record of completely failing to provide proper oversight for the programs it implements.  The Coastal Impact Assistance Program is supposed to fund efforts to restore coastal areas after oil companies have drilled, but it appears that the Bush Administration is not doing anything to ensure that the funds earmarked for this program aren’t wasted or diverted for improper purposes.  In fact, the Department’s Inspector General recently declared that ‘short of a crime, anything goes at the highest levels of the Department of Interior.’  Before handing out $250 million dollars per year of taxpayer money, the Interior Department must have the proper controls in place to ensure that those funds are actually spent for uses properly authorized under the law.”

Moreover today, Director Burton wrote an op-ed in the Atlanta Journal-Constitution defending the decision not to recoup millions in royalties owed to taxpayers from Chevron.  (http://www.ajc.com/opinion/content/opinion/stories/2006/11/01/1102edequa...)

Rep. Markey responded to Burton’s op-ed, saying, “Director Burton is in denial and her op-ed today raises serious concerns about her independence, thoroughness, and ability to advocate for taxpayers and carry out oversight to its logical ends.”

Markey’s letter to Burton states, “In light of these reported revelations about shortcomings in the oversight responsibilities at Interior and MMS, during the October 3, 2006 Hill briefing… I am concerned that adequate oversight of the program may not be in place to ensure that the funds are used for the purposes specified under the law, and not wasted…”

The letter to MMS Director Burton is below (and a PDF version can be found here:Rep. Markey Letter to Director Burton on CIAP.pdf)

November 2, 2006

The Honorable Johnnie Burton
Director, Minerals Management Service
Department of Interior
1849 C Street, NW
Washington, DC 20240

Dear Director Burton,

I am writing to follow-up on questions posed by my staff during a briefing held by the Minerals Management Service (MMS) for Congressional staff on the Coastal Impact Assistance Program (CIAP). The CIAP was created under the Energy Policy Act (EPACT) of 2005 and would allow for the distribution of $250 million per year for fiscal years FY2007 through FY2010 to wetland and coastal refurbishment projects in states that have oil and gas drilling activities off their coasts. As you know, the Interior Department has since delegated control and responsibility over this program to MMS.

Recent reports have highlighted the Interior Department’s massive failures to properly oversee and audit the collection of royalty payments by oil and gas companies to the federal government. These failures have allegedly resulted in the loss of millions of dollars to the American taxpayers. Moreover, Interior Inspector General Earl Devaney testified recently before the House Committee on Government Reform about the attitude in which “short of a crime, anything goes at the highest levels of the Department of Interior.”

In light of these reported revelations about shortcomings in the oversight responsibilities at Interior and MMS, during the October 3, 2006 Hill briefing, my staff asked MMS briefers a series of questions regarding what specific policies and procedures have been put in place to ensure appropriate federal oversight over the funds distributed under the CIAP. Based on the MMS staff’s responses, I am concerned that adequate oversight of the program may not be in place to ensure that the funds are used for the purposes specified under the law, and not wasted. I am therefore writing to further inquire what controls MMS and Interior have put in place to ensure that money allocated for specific projects as part of CIAP is actually spent on those authorized projects. Specifically I am asking for the following information:

§                     What specific controls or procedures, if any, have been put in place by either MMS or the Interior Department to ensure that the $250 million per year that MMS can distribute under CIAP is actually spent by states or coastal political subdivisions (CPS) on the coastal restoration projects for which CIAP funds have been designated?
§                     What office, if any, at MMS or Interior has been given the specific responsibility of overseeing the spending of CIAP funds by states or coastal political subdivisions?
§                     How many auditors at Interior or MMS, if any, have been charged with reviewing the spending by states or coastal political subdivisions under the CIAP?
§                     How frequently, if at all, has MMS or Interior required that audits of the spending by states or coastal political subdivisions under the CIAP be conducted?
§                     During the staff briefing, MMS officials stated that MMS will develop a risk list of coastal restoration projects being conducted under the CIAP and that not every project will be monitored. What criteria will MMS use to determine which projects are deemed to be at risk? What oversight, if any, will be given to projects that are not initially deemed to be at risk?

Thank you for your attention to this matter and I hope that you will consider this request with the utmost urgency.

Sincerely,

Edward J. Markey

For more information on Rep. Markey’s oversight of the Interior Department, please go to: http://markey.house.gov. 

FOR IMMEDIATE RELEASE
November 2, 2006

CONTACT: Israel Klein
202.225.2836