Cheshire Cat Photo Blog(...said the Cat: 'we're all mad here....')

Yesterday, the Justice Department announcd that San Ramon, California-headquartered Chevron Corporation will pay $45.5 million to resolve claims that it underpaid natural gas royalties to the government and Native Americans.

The settlement stated that the underreporting occurred for OVER 20 YEARS, from March 1988 through November 2008.

Most of the money will go to federal, state, and American Indian accounts. More than $12.3 million will go the heirs of the whistleblower who filed the lawsuit in Beaumont, TX. The case is U.S. ex rel. Wright v. Chevron USA Inc. et al., 5:03-CV-264 in the Eastern District of Texas. The settlement includes Chevron companies Texaco Inc., Unocal Corp., and other affiliates.

Each month, companies must report to the Interior Department the value of natural gas produced from their leases on federal and Indian lands. A percentage of the amount is paid as royalties. The government contended that the companies underpayed the royalties and violated the False Claims Act.

A statement from Chevron said:

“The agreement states that Chevron makes no admission of any kind concerning improper or fraudulent actions or omissions on its part, and Chevron reasserts that it did not engage in such activities. Chevron has settled this case simply to bring an end to a long and expensive legal proceeding.”

Tony West, Assistant Attorney General, said that mineral royalties provide an important source of income for Native Americans, the federal government, and several state governments.

Although the individual who filed the suit, Harold Wright, is deceased, his heirs will receive payment under the whistleblower provisions of the False Claims Act, which allows private citizens to file suits on the behalf of the United States and share in any money recovered.

Wright’s suit alleged that a number of companies SYSTEMATICALLY UNDERPAID royalties. The Justice Department previously settled with Burlington Resources Inc. for $105.3 million, Shell Oil Co. for $56 million, and Dominion Exploration and Production Co. for $2 million.

-Bill at

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