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Third Oil Royalty Office Official Indicted

POSTED: 06:09 PM ET, 10/29/2008 by Derek Kravitz

A former top administrator with the beleaguered agency that collects oil and natural gas royalties for the U.S. government was indicted yesterday on charges he accepted improper gifts from a contractor and lied about it to his supervisors.

Donald C. Howard, 58, of Destrahan, La., was a former regional supervisor of the Gulf of Mexico region for the Minerals Management Service. Howard, who oversaw federal leases for the government, was charged yesterday (statement) in the federal court in Louisiana with making false statements, a felony that carries a penalty of up to five years in prison and a $250,000 fine.

Prosecutors allege that Howard failed to disclose more than $2,000 in gifts and out-of-state travel expenses billed to the contractor, which were far more than the $285-per-year legal limit. The court documents did not identify the contractor.

Howard received the undisclosed gifts in 2004 and filed the false statement in October 2005, prosecutors allege. Howard's attorneys, Richard T. Simmons Jr. and Glenn W. Burns of Metairie, La., did not immediately return calls seeking comment.

Howard is the third former Minerals Management Service employee to be charged this year since investigators uncovered a pattern of corruption at a tiny agency office near Denver. The August 2008 inspector general's report (PDF) found that employees accepted gifts, steered contracts to favored clients and engaged in drug use and illicit sex with employees of the energy firms whose drilling contracts they controlled in a multi-billion-dollar program.

The U.S. Interior Department program collects oil and gas royalties from private companies drilling on federal land or offshore.

Two retired royalty office supervisors -- Milton K. Dial, 60, of Las Vegas and Jimmy W. Mayberry, 65, of Strawn, Texas -- have pleaded guilty to similar conflict-of-interest charges.

Mayberry pleaded guilty in July to a felony conflict-of-interest charge in a scheme that awarded roughly $1.4 million to his own firm for technical advice from his old employer. According to court documents, Mayberry created the requirements for the contract immediately before he retired, knowing he would bid on it.

Dial pleaded guilty in September to arranging the contract for Mayberry, who had hired Dial within six months of Dial's 2004 retirement, court records show. Dial's role violated restrictions on former employees of the executive branch.

Mayberry is scheduled to be sentenced in November and Dial in December, each facing maximums of five years in prison and a $250,000 fine.

Howard's conviction comes on the heels of a Government Accountability Office report (PDF) released today that found the government's oversight of its natural gas production under the royalty-in-kind program to be "less robust" than its oversight of oil production.

"As a result, MMS does not have the same level of assurance that it is collecting the gas royalties it is owed," the report said, also noting that the agency has self-reported some figures and that its annual reports to Congress "in some instances, may overstate the benefits of the program."

A copy of the federal indictment filed yesterday against Donald C. Howard, former regional supervisor of the Gulf of Mexico region for the Minerals Management Service charged with lying about improper gifts he received:

You can find more Post Investigations coverage of the MMS scandal here.

By Derek Kravitz |  October 29, 2008; 6:09 PM ET Hot Documents
Previous: Report Criticizes Spending at Smithsonian | Next: Election Coverage, Radiation Detectors Questioned, 41 People Charged in Drug Bust

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