Chevron Corp. has agreed to pay more that $45.5 million to settle claims that it shortchanged federal, state and American Indian accounts when paying royalties owed on land leases, the Justice Department said Wednesday.
The government alleged that the company systematically deducted costs, reduced the value of gas, and reported processed gas as unprocessed in order to shrink royalty payments. The payments were made to the Interior Department, which oversees collection and distribution of roylalties on federal and Indian lands. The alleged conduct occurred from March 1988 to November 2008.
“This administration is changing the way Interior does business and settlements, such as this one, demonstrate our determination to assure the American public receives fair market value for the resources we manage in their name,” Interior Secretary Ken Salazar said in a statement.
Civil Division Chief Tony West said the Justice Department was ”committed to protecting public and Indian lands and to ensuring that companies with leases to take natural gas from those lands pay their fair share of royalties.”
The $45.5 million will be divvied among federal, state and American Indian accounts. The case, brought under the False Claims Act, was handled by the Civil Division, the U.S. Attorney’s Office for the Eastern District of Texas, and the Interior Department’s Office of Inspector General, Minerals Management Service and Office of the Solicitor.
The settlement flows from an FCA lawsuit filed by whistleblower Harrold Wright, who died in the course of the litigation. His heirs will receive $12.3 million as part of the settlement, the Justice Department said.
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.
Wednesday’s announcement comes on the two weeks after the government entered into an agreement to pay more than $1.4 billion to settle a long-running class-action brought by American Indians who accused the Interior Department of mishandling Indian funds held in trust. The plaintiffs and the government executed a settlement Dec. 7, but it requires approval from Congress and a federal district judge.