The vast majority of government contracting for the rights to develop energy and minerals occurs on public lands. The federal government contracts with private companies to develop, manage and transport the country’s energy resources. Typically, private companies enter into leases with the federal government for the right to mine or drill on these public lands in exchange for royalties to be paid to the federal government. As part of these leases, the federal government earns billions of dollars in royalties from granting private companies the right to explore for oil and gas reserves on public land and waters. The federal government, and to a lesser extent state governments, spend billions of dollars each year to purchase, develop, manage and transport energy resources in the United States. For example, the Department of Energy’s (DOE) 2014 budget is close to $30 billion, much of that budget is to be spent on contracts with companies that manage its energy resources. The Federal government also spends billions of dollars each year in research grants and other incentives for the development of new and renewable energy resources. For example, Congress’ budget for 2014, spends $12 billion to fund DOE’s participation in a multiagency research initiative aimed at advancing technology and methods to safely and responsibly develop America’s natural gas resources.
With billions of dollars at stake, one can imagine the many ways that private companies defraud the state and federal governments out of money they are owed under their contracts for royalties, service and research grants. They include:
Oil, Gas and Coal Lease Royalty Fraud
In fiscal year 2012, mineral leasing (which includes only oil and natural gas) the federal government was paid $12 billion. Of course with such large sums of money at state, it is not surprising that a commone type of fraud on the government has been major oil and gas firms misrepresenting or falsifying how much they owe the government in royalties. These entities engage in conduct to manipulate the way they calculate the amounts the federal government is owed in royalty payments.
Energy Management/Service Contracting Fraud
The Department of Energy (DOE) is charged with advancing the national, economic, and energy security of the United States; promoting scientific and technological innovation in support of that mission; and ensuring the environmental cleanup of the national nuclear weapons complex. In order to carry out its mission, the DOE contracts with private companies to secure, maintain and develop the country’s energy resources, including the safe guarding of nuclear stock piles. For example, in 2012, the budget to ensure our Nation’s legacy of nuclear wastes from the production of weapons during the Cold War are processed, secured, and safely disposed of in a timely manner was $5.6 billion. As with every government contract, the contractor is required to certify compliance with numerous regulations and laws, contract terms and provide honest cost reporting to the government. With so much money at state, government contractors engage in schemes to over-charge the government or knowingly fail to comply with the terms of the contract.
The Federal Government spends cost to $5 billion in DOE sponsored research grants each year in support of the development of new and renewable energy resources. Common forms of research grant fraud typically include misrepresenting facts in the application in order to secure the grant, misrepresenting research results and data; over-charging for costs and other expenses, including wages and time reported, using grant money for work outside the grant terms and misrepresenting conflicts of interest by the investigators.
If you believe someone has knowingly committed fraud against the government and you would like to learn more about or would like to bring a whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you. These whistleblower lawyers understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.