Oil industry got 11th-hour favors Bush White House aided ranchers, too

February 11, 1993|By Los Angeles Times

WASHINGTON -- In its final weeks before leaving office, the Bush administration took a series of little-noticed steps to allow the petroleum industry to avoid hundreds of millions of dollars in additional royalty and interest payments to the government.

At the same time, Bush administration officials lowered the government fees for some ranchers who graze livestock on federal lands.

Yesterday, President Clinton's interior secretary, Bruce E. Babbitt, issued an order rescinding one of the oil and gas decisions, which had forestalled government efforts to collect certain royalty payments.

The Bush administration's actions dealt with issues that in some cases had been under review for years. Several involved large sums for the parties involved.

Officials who served in the Bush administration say that all of the cases had been thoroughly considered at the appropriate levels and were ready for resolution.

Nevertheless, some say they were conscious of their expiring authority and wanted to make sure that the final decisions carried their stamp rather than their successors'.

Two key decisions benefiting oil and gas producers came on Dec. 22 and Jan. 15. The action on behalf of the ranchers came from the Agriculture Department Jan. 13. President Clinton was inaugurated Jan. 20.

Oil companies gave more than $1.3 million to the Republican National Committee and other GOP groups in the past two years. They donated about $733,000 to Democrats. Ranchers are a well organized and powerful lobby in traditionally GOP states.

Among the actions that have prompted the most concern in federal agencies, on Capitol Hill and in affected states are the following:

* A decision by the Interior Department on Dec. 22 on whether the government deserves royalties when private gas companies make "buy-down" agreements among themselves that cut gas production on federal leases. James R. Richards, the department's inspector general, concluded that the government could demand such compensation, since the contracts reduce the regular royalties it would receive otherwise. John E. Schrote, a former assistant secretary of the interior, disagreed, saying a policy change would be necessary. Mr. Babbitt rescinded that decision.

* A decision announced Jan. 13 by Secretary of Agriculture Edward R. Madigan to change the way that grazing fees on 3.7 million acres in the Plains states are calculated. The change decreased rates that were already below market levels. Mr. Madigan said the action corrected an unjustified disparity between regions; critics said it increased a windfall for a favored business interest.

* A decision in late October by the Department of Interior's assistant secretary for water and science to delay large Arizona farmers' repayments to the federal government on the Central Arizona Project, which provides valuable water for farms in the region.

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