The Interior Department's Oil Lease Scandal — and Its Lessons for the Commons

In this time of scandal fatigue, it is hard to keep track of the many egregious government giveaways of our common assets. Still, it’s hard to ignore the most recent, nasty betrayal of the commons. The case, whose lurid details are about to break open into public view, involves gross mismanagement of oil and gas leases on federal land and in coastal waters.

Thanks to the Interior Department, we taxpayers have lost as much as $10 billion in royalties due to us. The giveaway, mind you, has occurred at a time when oil companies were reaping record profits and the Bush Administration, in the name of energy independence, was shoveling more and more subsidies to the industry.

The Inspector General at the Interior Department spent eight months last year investigating the Minerals Management Service (MMS), which oversees the collection of oil royalties from public land. In a blistering report released in December 2006, the Inspector General found that:

It appears, moreover, that this is not a case of simple incompetence, but rather a case of wink-and-nudge collusion. According to an article by Jeff Tollefson of Congressional Quarterly, the Inspector General, in a congressional hearing on January 18, is likely to accuse the head of the MMS, Johnnie Burton, of a cover-up. The MMS is said to have known exactly what they were doing.

This scandal is depressingly similar to so many others, in which business-friendly politicians install industry stooges at government agencies in order to neutralize or override the law and its regulatory intent. If the public is fed up with politics and skeptical of government, it’s because they have come to realize that government regulation is a shell game. A government agency is set up to address a public need (health and safety, emergency management, corporate use of public lands, etc.), and then backdoor subterfuges are quietly, inexorably introduced to subvert the nominal goals of the agency. When decisions pivot on highly technical cost-benefit analysis, numbing legal complexities, complicated science and bad-faith appointees, ordinary citizens can only irregularly vindicate their interests in the face of the well-financed corporate enclosers.

Perhaps it is time to start asking, Can the neoliberal state be salvaged or reformed? With so many corrupting influences affecting government performance at all levels — campaign contributions, the corporate-dominated political parties, the permanent Washington legal/lobbying establishment, the mismatch of scientific and expert resources — we should not be surprised that citizen interests are routinely traduced. The corruption of public purpose is not an aberration. It is a systemic feature. It merely varies in intensity from Democratic to Republican administrations.

Clearly, we need to continue to fight to reclaim our own government. But I say it’s time to develop new sorts of institutions and legal tools to protect citizen interests more effectively. Not only is the regulatory apparatus eminently corruptible, its centralized bureaucratic tools are often not capable of dealing sensitively with local variations and dynamic, decentralized problems. The solution is not to junk the regulatory state, but to develop new muscles and organs to enhance its performance (technically and politically).

Peter Barnes calls for a whole new “commons sector” of commons institutions, which would be less corruptible and leverage citizen energies in a decentralized way. One such commons institution is the stakeholder trust, which would be charged with a specific mission, fiduciary obligations, and enforceable legal obligations to commoners and future generations.

I believe, in addition, that we need to strengthen legal mechanisms that can give citizens more effective redress — things like the public trust doctrine; citizen standing to sue for government non-performance; mandatory and timely transparency of information and decision-making; and offices to represent commoners within government and the courts.

The interests of the commoners are too easily corrupted when they are vested with Members of Congress and the President. The latest scandal at the MMS is, in a sense, an entirely predictable and inevitable result of the current system. It’s no accident that the Mining Act of 1872 (yes, 1872!) is still the prevailing law governing mineral extraction on American public lands.

It’s time to escape our own regulatory “Groundhog Day” nightmare. Here we are again, surprise, surprise. It’s time that we changed some basic rules of the game. It’s time to develop a new intermediary layer of commons institutions.