Investigators told a special Senate committee Tuesday that a Wichita, Kan., company has been stealing oil from Indian lands for at least the past three years.
Documents subpoenaed from Koch Industries show that the company consistently ended the year with hundreds of thousands more barrels of oil than it pays for, investigators told a special panel of the Senate Select Committee on Indian Affairs.An employee at Koch's public relations office in Wichita said nobody was available immediately to comment on the testimony.
Although measurement difficulties make it normal for oil companies to pay for less oil than they actually take - even up to 12,000 barrels a year - Koch documents showed the firm ended 1986 with 803,874 excess barrels, 1987 with 671,144 excess barrels and 1988 with 474,281 more barrels than it paid for, witnesses said.
Chris Tucker, an independent oil and gas expert, said normal procedure is for oil companies to compensate for "overages" by shorting themselves in future purchases.
The volumes for the three years shown in the Koch documents were worth about $12.1 million, $11.9 million and $7.1 million, respectively.
Many of the Koch oil purchases were made on Indian lands with royalties from the oil due to Indian tribes or individual Indians.
Chuck Norman, an accountant for the special committee, said it is easy to steal from the Indians because nobody watches the purchasers, like Koch, take oil from the tanks at the well.
Furthermore, witnesses said, substantial confusion exists among federal agencies about who is supposed to police the taking of oil from Indian lands.
Tucker said Koch used various means to mismeasure oil. He showed a videotape he secretly made of a Koch employee taking oil at a Northern Ute Indian oil field in Utah. He said it showed that the employee did not follow all the procedures necessary to accurately measure the oil.
Under questioning, Norman said evidence was being gathered on other companies as well and would be turned over to authorities.
"We are not a grand jury," said Sen. Dennis DeConcini, D-Ariz., the panel's chairman. "We are attempting to zero in on the problem and how it happens."
In an interview before the hearings began, DeConcini and Sen. John McCain, R-Ariz., said the committee's findings will be turned over to the Justice Department which could seek indictments.