Clone Alone

Hillary Race Is Textbook Case

The fire occurred as Galster was consulting with Canadian hemophiliacs on a lawsuit they are preparing to file in the U.S. While Galster said he had given most of his key documents to the Canadians before the fire, others were destroyed in the blaze.

The break-in at the Hemophilia Society in Montreal occurred the same night. The Society has been at the forefront of a fight to expose the scandal in Canada. Mike McCarthy, a hemophiliac who has led efforts to expose the case, told the Ottawa Citizen he was convinced the Montreal break-in and the Arkansas fire were connected. "It's too much of a coincidence," he said, adding: "Someone is worried Mr. Galster and the victims are probing too close to the truth."

In the 1980s, Arkansas prisoners were paid $7 a unit for blood, some of which was sold to a Canadian firm and entered the Canadian blood supply. Representatives of hemophilia groups claim that several hundred hemophiliacs who received transfusions were stricken with AIDS and hepatitis C.

Quality of strife: Rudy waits for the race in 2000.
Fred W. Mcdarrah
Quality of strife: Rudy waits for the race in 2000.

Suits Swamp Big Oil
POGO Settlement Opens Door

After a long love affair with Congress and one administration after another, Big Oil finds itself for the first time under serious attack in the capital. A tiny public-interest group has won a court settlement that may open the door to more citizen suits. Already, more than a dozen suits are on file, and they could end up hitting the industry the way the states attorneys general brought the tobacco giants to heel.

The Project on Government Oversight (POGO) filed suit in June 1997 against Mobil and other oil companies, charging that they had underpaid royalties owed to the federal government for drilling oil in public-domain territories. The suit, brought under the False Claims Act— signed by President Lincoln, when it was aimed at Civil War arms profiteers— allows private parties to sue on behalf of the government and receive a portion of the amount recovered. If successful, a whistleblower can get from 15 to 30 percent of what the government ultimately recovers.

The complaint, originally filed in Texas, alleged that Mobil, BP, Chevron, Exxon, and others underpaid royalties by calculating them based on "fraudulently deflated wellhead prices." Two other groups sued on the same grounds, and the filings were combined. The Justice Department, after investigating, intervened in the case.

Eventually, Mobil decided to settle for $45 million, with most of it going to the government. However, 18 percent of the total was divided among a group of complainants, including two former crude oil marketers, a wildcatter, a former director of properties for the City of Long Beach, California, and Danielle Brian, executive director of POGO. POGO got $1.2 million, and the group, in what turned out to be a controversial step, then awarded $720,000 to two government workers who had discovered the royalty underpayment.

Mobil's settlement signals trouble for Big Oil, as the long-smoldering controversy over the major companies' rip-off of government-owned oil is finally gaining political momentum. A May 1999 study by New York representative Carolyn Maloney alleges that major companies owe as much as $2 billion in underpaid royalties from oil produced on federal lands. After reviewing the evidence, a House subcommittee found that "publicly, the companies posted the price of oil they wanted the public to believe was market value, yet internally, they based the oil's value on the much higher Alaskan North Slope spot price."

To rectify the situation, the Interior Department has been trying to clarify the rate structure so that the companies will be be paying what they should be paying. But so far the industry has persuaded Congress to block the rules, most recently in language inserted in emergency appropriations for the Balkans war. Last week, three of Big Oil's friends in the Senate — Alaska's Frank Murkowski (who heads the Energy Committee), New Mexico's Pete Domenici, and Oklahoma's Don Nickels— sought to portray POGO's awarding of part of its settlement money as a conflict-of-interest scandal, and asked the Justice Department to investigate. According to POGO, Justice gave the group verbal approval for the payment.

Highland Fling

The Bank of Scotland is vowing to cut its links with the U.S. evangelist/businessman Pat Robertson after Robertson said recently that Scotland is "a dark land" overrun by homosexuals.

"In Scotland, you can't believe how strong the homosexuals are," Robertson said on his 700 Club TV show. He added that he believes Scotland is violating its Christian heritage by its acceptance of gay and lesbian lifestyles. A spokesman for Robertson said the comments were taken out of context.

Additional reporting: Ioana Veleanu

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