[Congressional Record Volume 145, Number 118 (Monday, September 13, 1999)]
[Senate]
[Pages S10771-S10773]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 
                            2000--Continued


                             CLOTURE MOTION

  The PRESIDING OFFICER. Under the previous order, the cloture motion 
having been presented under rule XXII, the Chair directs the clerk to 
read the motion.
  The legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on amendment No. 
     1603 to Calendar No. 210, H.R. 2466, the Interior 
     appropriations bill.
         Trent Lott, Kay Bailey Hutchison, Gordon Smith of OR, 
           Thad Cochran,

[[Page S10772]]

           Larry E. Craig, Bill Frist, Michael Crapo, Don Nickles, 
           Craig Thomas, Chuck Hagel, Christopher Bond, Jon Kyl, 
           Peter Fitzgerald, Pete V. Domenici, Phil Gramm, and 
           Slade Gorton.

  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Madam President, in view of the fact that seven of 
our Members are missing, I ask unanimous consent to move the cloture 
vote to tomorrow following the votes at 10:30.
  The PRESIDING OFFICER. Is there objection?
  Mrs. BOXER. I object. I object.
  The PRESIDING OFFICER. Objection is heard. Under the previous order, 
there will now be 5 minutes of debate equally divided between the 
Senator from Texas and the Senator from California.
  Mrs. BOXER. Madam President, I ask if Senator Hutchison would like to 
go first?
  Mrs. HUTCHISON. Madam President, I prefer to reserve my time and 
close.
  Mrs. BOXER. Madam President, may we have order in the Chamber, 
please.
  The PRESIDING OFFICER. The point is well taken. Senators will take 
their conversations to the Cloakroom, please.
  The Senator from California.
  Mrs. BOXER. Madam President, I have taken the Senate's time on this 
matter. Here is why: I simply care about the Senate too much to see it 
be a party to a deliberate scheme by just 5 percent of the oil 
companies to underpay their royalty payments to our constituents. The 
Hutchison amendment allows the situation to continue by stopping the 
Interior Department from fixing it.
  How do we know taxpayers are being cheated? First, there are many 
whistleblowers, former oil executives, who say under oath they 
undervalued the oil from Federal lands in order to pay less.
  Second, settlements are occurring all over the country whereby these 
oil companies are paying billions of dollars in back royalties to keep 
their cases out of court.
  Senator Hutchison has said the Interior Department wants to raise 
taxes on the oil companies. Royalties are not taxes; they are legal 
agreements just as your mortgage or rent is. As USA Today says:

       Imagine if one day you decided to lower your rent by 10 
     percent. No individual could do that. And yet the oil 
     companies are.

  You may hear all we need is more time, but this is the fourth rider 
this Senate has passed, although we have never had a vote on it before. 
This is the first vote. We have already lost $88 million from the 
Department of the Interior because of it. These companies should do 
what 95 percent of them are already doing, base their royalty payments 
on fair market value.
  Senator Hutchison has said the oil companies are suffering now and it 
is bad timing to fix this. I voted, and most of us did, for a bill to 
help the oil companies. That is fine. But royalty payments must be 
collected and because they are based on fair market value, they do go 
down when oil prices are depressed. That is a better deal than most 
Americans get on their mortgages or their rent.
  You may hear about a court case in California that the oil companies 
won. But that had nothing to do with Federal oil royalties; it was 
about State royalties.
  Finally, the Hutchison amendment is not in the House bill because 
this is an appropriations bill, and the Hutchison amendment will strip 
another $66 million out of the Land and Water Conservation Fund. We 
need those funds very much. Senator Hutchison says it is just $10 
million. Interior and OMB say $66 million. Regardless, it is a bad 
rider. I hope you will not vote for cloture.
  The PRESIDING OFFICER. The time of the Senator has expired. The 
Senator from Texas.
  Mrs. HUTCHISON. I yield 1 minute to the Senator from Louisiana, Mr. 
Breaux.
  Mr. BREAUX. Madam President, I thank the Senator for yielding. In 
just 60 seconds, it is unfortunate we are voting with a number of 
Senators absent. I guess we will have to do that.
  The question is, How do we value oil? The law says the companies owe 
the Federal Government, taxpayers, one-sixth to one-eighth of the value 
of the oil. The problem is, how do you determine the value? It is a 
very complicated rulemaking procedure that is ongoing to try to 
determine what are the legitimate deductions and transportation costs, 
in particular, determining what the fair market value of oil is. We can 
rush this thing through. It will result in years of litigation. Or we 
can pause for a few moments, which is what we are asking to be done, to 
try to negotiate out something to which both sides can agree. I think 
it makes more sense to pause for a few moments, get the groups together 
and work it out, rather than run the risk of years and years of 
litigation. We know what is going to happen then. Nobody is going to 
win. The American public is not going to win.
  I urge we support the Hutchison amendment and get it done in a more 
realistic and fair fashion.
  Mrs. HUTCHISON. I yield 30 seconds to the Senator from New Mexico.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. I rise in support of the Hutchison-Domenici amendment 
because the MMS's procedures are flawed. Department of the Interior 
employees involved in the writing of the regulations received $300,000 
each from a group that had interests contrary to those of the oil and 
gas firms.
  It is wrong on substance. I will just give one example showing it is 
flawed. A producer from one oil well producing one kind of oil would be 
forced to value his oil ten different ways under this MMS proposal.
  Mr. MURKOWSKI. Mr. President, I strongly support Senator Hutchison's 
amendment to keep the Department of Interior from spending additional 
money for one year to implement their flawed oil valuation regulation. 
I am a cosponsor of the amendment.
  Our amendment does two things: First, it puts the Senate on record 
opposing a Value-added Tax proposed by the executive branch. Second, it 
prevents MMS from implementing a rule that is so corrupt the Interior 
Department's inspector general and the Department of Justice are 
currently investigating $700,000 in payoffs to federal employees 
involved in the rule.
  The CBO scored the impact of this amendment at $11 million. This is 
the apparent cost of standing up for Congress' constitutional 
prerogative to raise revenues.
  The domestic oil and gas industry is being driven from our shores. 
During the oil embargo in 1973, we imported 36 percent of our oil. 
Today, we import 56 percent of our oil. We will continue to burn oil--
in fact, we burn a bit more now than we did in 1973. But our own 
industry is in a death spiral, caused in part by government actions 
like this. Over 50,000 American families have lost their jobs in the 
last two years as companies leave the U.S. for foreign shores--foreign 
shores where it's cheaper to drill and governments encourage domestic 
energy production.
  Without adoption of the Hutchison amendment, we will be saying: ``Go 
ahead. Raise royalties and taxes. We, the U.S. Senate, yield our power 
to the Executive.'' This Senator cannot stand by and watch all power 
flow to the Executive.


                      ``Rent-A-Rule''--POGO, etc.

  Neither can this Senator stand aside when there are serious 
allegations of payoffs to government employees involved in the rule.
  In May of this year, the press began to report that two federal 
employees--one at the Department of Interior; the other, retired from 
the Department of energy--had taken $700,000 from a self-described 
``public interest group'' as an ``award'' for their work in the federal 
government on the rule to raise royalty rates on domestic oil 
producers. This group, the project on Government Oversight, or POGO, 
has not been very effective in its membership drive--it has only about 
200 subscribers--but it has been very successful attracting trial 
lawyers as board members. In fact, the trial lawyers on its board have 
spent years litigating the very cases on oil value that the proposed 
DOI rule would benefit if the Boxer Amendment is adopted.
  The inspector general and the U.S. Department of Justice public 
Integrity Section are investigating these payments.
  In two letters to the Secretary of Interior, Senators Domenici, 
Nickles, and I have asked the Department to withdraw the proposed rule 
pending the outcome of the investigations into

[[Page S10773]]

whether the employees can take money for ``fixing'' a rule. The 
Department has declined to do so twice.
  In answering our first letter, DOI said the two had nothing to do 
with the rule. Senators Domenici, Nickles, and I wrote back, this time 
providing public documents proving their involvement, and asking them, 
based upon the evidence, to withdraw the rule.
  The response to our second letter was to acknowledge that the two 
apparently did have some involvement in the rule, but the decision to 
change the rule was made prior to their official involvement.
  The Department's argument is misleading. The two federal employees 
worked hand-in-glove with POGO to convince the Department to craft a 
rule to POGO's liking. According to POGO's Executive Director, POGO 
even arranged for the employees to be specifically requested to testify 
before a House subcommittee to put pressure on the Department to start 
a rulemaking.
  All the facts suggest that these employees were influential, if not 
instrumental, in the decision to issue the rule and the content of the 
rule. After influencing the decision to issue the rule, the employees 
took part in the public comment phase of the rulemaking. In other 
words, they were up to their elbows in this issue from start to finish.
  A skeptic could conclude that the employees, working with POGO and 
the trial attorneys who stood to gain from out-of-court settlements, 
earned their ``rewards.'' POGO, after all, admits they paid them 
$350,000 each. The Department's position appears to be that POGO paid 
the wrong bureaucrats.
  The public integrity of the public rulemaking process is at stake, 
even if Secretary Babbitt fails to see it.
  In our nation, federal employees are not paid to push rule changes 
which benefit one party in a lawsuit. This is a dangerous precedent.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Madam President, we directed the MMS to simplify the 
oil royalty payments so that companies would know what their fair share 
is. This is what MMS has come forward with as a simplification.
  Companies still do not know what they will owe. They want to pay 
their fair share. I want them to pay their fair share. Whether they 
have in the past is not an issue. We are trying to have a fair setting 
of taxes.
  The question is: Who makes tax policy in this country? Is it Congress 
or is it unelected bureaucrats who are not accountable to the people? 
We are talking about a 1-year moratorium so that this can be worked out 
in a way that is acceptable to Congress.
  The Senator from California says this only affects 5 percent of the 
producers. I have a letter from the California Independent Petroleum 
Association, representing 450 independent oil and gas producers, which 
says:

       It is false to claim that this rulemaking only affects the 
     top 5 percent of all oil producers. It affects every 
     California producer on Federal land.

  Madam President, I urge a vote for cloture so we can have a fair up-
or-down vote on this amendment so that Congress will set the policy of 
this country.
  The PRESIDING OFFICER. All time has expired. By unanimous consent, 
the mandatory quorum call has been waived. The question is, Is it the 
sense of the Senate that debate on amendment No. 1603 to H.R. 2466, the 
Interior appropriations bill, shall be brought to a close? The yeas and 
nays are required under the rule. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Utah (Mr. Bennett), the 
Senator from Utah (Mr. Hatch), the Senator from North Carolina (Mr. 
Helms), and the Senator from Alabama (Mr. Sessions) are necessarily 
absent.
  Mr. REID. I announce that the Senator from Florida (Mr. Graham) is 
necessarily absent.
  The yeas and nays resulted--yeas 55, nays 40, as follows: 

                     [Rollcall Vote No. 271 Leg.] 

                               YEAS--55 

     Abraham
     Allard
     Ashcroft
     Bingaman
     Bond
     Breaux 
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Cochran 
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Kyl
     Landrieu
     Lincoln
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner 

                               NAYS--40 

     Akaka
     Baucus
     Bayh
     Biden
     Boxer
     Bryan
     Byrd
     Cleland
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Harkin
     Hollings
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Torricelli
     Wellstone
     Wyden 

                             NOT VOTING--5 

     Bennett
     Graham
     Hatch
     Helms
     Sessions
  The PRESIDING OFFICER. On this vote the yeas are 55, the nays 40. 
Three-fifths of the Senators duly chosen and sworn not having voted in 
the affirmative, the motion is rejected.
  Mrs. BOXER. Mr. President, I move to reconsider the vote.
  Mr. LOTT. Mr. President, I enter a motion to reconsider the vote by 
which the Senate failed to invoke cloture on the pending Hutchison 
amendment.
  The PRESIDING OFFICER. The motion is entered.

                          ____________________