Wyoming Gov. Dave Freudenthal is considering an audit of the state’s share of a controversial federal gas Royalty in Kind program that paid the state $290-million in fiscal year 2007-08, WyoFile has learned.
According to State Lands and Investments director Lynne Boomgaarden, the governor asked her and Wyoming Department of Audit director Mike Geesey to brief him on options that include both full and partial audits of the federal program to see if the state received market value for its share of natural gas from the Royalty in Kind program begun in 2005.
“Within a week or ten days we expect to go to the governor ,” Boomgarden said in an Aug. 21 telephone interview with WyoFile. Among the issues, she said, are the “political and monetary risks of conducting an audit” and “the nature and scope of the audit if it were conducted.”
In 2005, the Wyoming Board of Land Commissioners met with then-Minerals Management Service Director Johnnie Burton and agreed to commit its 50 percent share of natural gas royalties to the federal Royalty-i n-Kind program. The vote was 4-1, with Freudenthal the lone dissenter.
Burton resigned from office in 2007, shortly before the Department of Interior Inspector General reported widespread corruption and unethical behavior in the Colorado-based Royalty-in-Kind office under her supervision. The scandal sparked a furor in Congress where several draft bills have called for the suspension of Royalty-in-Kind.
Acting on the recommendations of an Minerals Management Service advisory Subcommittee on Royalty Management—which included Wyoming state treasurer Cynthia Lummis, now Wyoming’s U.S. representative— the Department of Interior in 2008 discontinued all onshore Royalty-in-Kind oil programs while continuing RIK for offshore federal leases and for natural gas in Wyoming.