Oil Royalties Anadarko Oklahoma

The situation affects more than 250,000 Indians or tribal governments that rely on the Interior Department to collect and distribute about $146 million each year in mineral royalties from Indian lands.
State and federal audits suggest that thousands of those Indians, many of whom live below the poverty level, are not receiving royalties to which they are entitled or getting them only after unexplained delays of as long as two years.
"If it's not a scandal, it's one of the worst cases of mismanagement I've ever come across," Rep. Mike Synar (D-Okla.) said. "These people are getting their trucks repossessed, being evicted from their apartments, because they can't get the money due them from the government. And it's been going on forever."

The Interior Department agrees that it has a "serious problem." At a congressional hearing in Oklahoma last month, a Bureau of Indian Affairs official said complaints about royalty payments are so common that one BIA office is closed two days a week so the staff can turn off the telephone and do other work.
But Interior officials could not tell Synar how much money was being delayed, to whom it belongs or where it is, and the department says it does not have the staff or the equipment to find out.
Part of the problem, according to Interior, stems from a cumbersome collection process. Royalty payments change hands as many as six times among oil companies, Interior's Minerals Management Service and various BIA offices before finally going to an Indian recipient.
The difficulty is compounded by the number of Indians involved. Most leased land is shared by at least a half-dozen family members; some lots have as many as 200 owners. While ownership is being resolved, the money usually sits in a "special account," collecting interest.
While the payments are made sporadically, interest sometimes is not distributed. A recent Interior investigation of seven BIA offices in Oklahoma found that four were holding more than $1 million in interest dating to April 1981.
BIA official John Fritz told Synar that a new computer system would help smooth the payment process and that the department hopes to have one functioning by next summer.But the department upgraded its computer system two years ago, in response to a 1982 law that ordered Interior to speed royalty payments, and some say the royalty mixup has worsened.
"It's just not being resolved," Rep. Glenn English (D-Okla.) said. "I'm beginning to wonder in the back of my mind whether this is not some way to generate additional revenue.""There are substantial amounts of money involved here," he said, "and, if it's not being paid to the Indians, it can only be accruing to the agency. It may have gone to the point that it may need a grand jury."
What concerns officials in Oklahoma, where more than 48 percent of Indian-owned oil and gas lands are located, is a nagging suspicion that the longstanding royalties problem may be rooted in other than inadequate computers and short staffs.Interior seldom audits Indian leases, preferring to concentrate on "high-value" mineral leases. Indian-held lands produce only about 2 percent of the oil and gas managed by the federal government.
A recent inspector general's inquiry found numerous administrative problems in the program, but investigators did not attempt to determine whether royalties were being properly paid to Interior.
A series of audits conducted by the Oklahoma Corporation Commission, however, persuaded commission Chairman James B. Townsend that the Indians "have legitimate grounds to complain."
In one case, he said, his investigators found that the BIA had told six Indians that they earned no royalties from their gas well in 1984 because the well was not producing. Production reports filed with the state showed that the well had produced gas every month that year, he said, and the Indians should have been paid more than $24,000.
Oklahoma officials have no estimate on how much money is being lost to Indians, either. "I have no idea even in the 90 cases we're working on how much money is involved, but I know it's a lot," Childers said. "I was impressed by the number of times the oil companies paid money to the Minerals Management Service on such and such a date and the money never showed up at the other end."
Childers said some of the discrepancies may be attributed to a difference in accounting procedures. Interior "has trouble finding the money in their system," she said. "They couldn't even tell us what their process was."
But the state findings have increased concern among the Indians, many of whom have been unable to obtain information on production or sales from their wells even though Interior is required by law to make those statistics available to them.

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