I just read your article on the Pitkin County commissioners’ legal brief objecting to the paltry fine in the federal court anti-trust lawsuit brought against our local gas explorers SGI (a Texas corporation) and GEC (Bill Koch’s company).
These two companies conspired together to beat the BLM out of a great deal of money by agreeing that instead of both of them going into the competitive bidding process on a bunch of local leases, they would just agree ahead of time that SGI would bid on the leases and then sell half of them to GEC. Thus they avoided bidding against each other and thus they got the leases at less than a competitive price. Like trying to get two people into a movie theater on one ticket but with much higher stakes.
They even signed a contract ahead of time to put their agreement to defraud the government in writing. Thanks to an insider whistle blower, they got caught red-handed. And because their guilt was so obvious, both companies agreed to pay a fine of $275,000 each and keep the leases. Yes, they got to keep the spoils of their fraud and simply pay, what is to them, a small fine.
After they agreed to pay the fines and keep the leases, executives of both companies publicly stated that they did nothing wrong. That they were just paying the fines to avoid the legal fees that would be incurred to prove their innocence.
To suggest that these well funded gas companies would hesitate to pay lawyers if they thought they had done nothing wrong is fictitious at best. Bill Koch once paid $500,000 for four bottles of a wine reputedly owned by Thomas Jefferson. He then spent $5 million in legal fees in a “relentless series of lawsuits” chasing after vendors who had sold him fake wine. Bill Koch’s point in the lawsuits was that the wines were fake and that he had been defrauded. I personally applaud Mr. Koch’s sense of justice for chasing after frauds until they were held accountable.
Robert Abbey, the national director of the BLM referred indirectly to the actions of GEC and SGI as “fraudulent conduct.” Rather than compound the fraud, it would have been much more honest of GEC and SGI to simply admit to us that they had done something wrong in trying to cheat the BLM out of a fair and competitive price and that they wouldn’t do it again.
Consider this meager fine in the GEC/SGI case against the backdrop of Tim DeChristopher who recently bid on BLM leases in Utah as a protest but didn’t have the money to pay for them when the gavel went down. He is now serving two years in federal prison for his “fraud.”
Despite the obvious wrong doing and then the public denial of wrong doing by GEC and SGI, our local BLM office in the North Fork Valley recently appeared in a public forum to let us all know that we had nothing to fear about gas drilling and fracking in our valley because we were being protected by these gas companies and the state oil and gas commission (COGCC). And who do you think was sitting on the panel with the BLM and COGCC? You guessed it, an SGI corporate officer.
The upshot of this panels’ message was that many safeguards were already in place to protect us. Hearing that GEC/SGI and the COGCC were being entrusted with the safety of our air and water did not give me a warm and fuzzy feeling. Especially since a recent report found that the COGCC was failing to enforce its own rules. In 2011 there were 516 spills in Colorado and the COGCC assessed fines in only five of them.
This whole buddy-buddy arrangement is beginning to stink. The BLM, gas companies and the COGCC are just too cozy and none of them seem to be looking out for those of us living and working locally. The BLM has a “multiple use” mandate. The word “multiple” doesn’t mean just the gas companies. When will someone from the BLM, U.S. Department of the Interior or one of our elected federal officials realize this and give us equal protection from what seems to be a “single use” mandate that sounds a lot like “drill baby, drill”?
Perhaps the judge in the GEC/SGI case will recognize that a slap on the wrist is not sufficient to deter future illegal action. Kudos to the Pitkin County commissioners for taking a position and joining in the public outcry against this totally inadequate remedy for the fraud that was perpetrated.