Probe of ex-Interior Secretary Norton’s handling of Shell winds down, sources say

Introduction

A Justice Department probe into whether former Interior Secretary Gale Norton illegally gave preferential treatment to Royal Dutch Shell Group, which later hired her for an executive job, is expected to end soon without any charges, say sources familiar with the inquiry.

The probe was looking in part at Interior’s decision to grant three lucrative oil shale leases on federal lands in Colorado to a Shell subsidiary in January 2006. Norton left the top job at the department in March 2006, and said she had not lined up a new position. About nine months later, Shell hired Norton as general counsel for its U.S. unconventional resources unit.

Shell’s Colorado-based unconventional resources unit focuses on exploration and production including shale technology.

The Justice probe mainly focused on whether Norton broke a conflict of interest law that bars government officials from negotiating future employment with a company that stands to benefit from official actions. The inquiry was looking at whether Shell – the only company to receive three of the lucrative leases in Colorado – benefitted from special treatment.

Craig Truman, a Denver attorney for Norton, declined to comment, saying “we never talk about our cases outside of court.”

A Justice spokeswoman, Laura Sweeney, also declined to comment.

But the sources, who asked to be anonymous, have told the Center that the inquiry is winding down because government lawyers don’t believe they have enough evidence to bring a prosecution.

The oil leases were granted to Shell at the recommendation of a group of states and an interagency panel which included Interior officials. One analysis by Shell and the Rand Corp. indicated the leases could be worth hundreds of billions of dollars to the company over their production lifetime.

“We’re unable to comment on pending investigations,” said Shell spokesman Theodore Rolfvondenbaumen.

The Justice investigation grew out of an earlier inquiry into Norton at the end of the Bush administration by the office of then-Interior Inspector General Earl Devaney. The internal watchdog’s office concluded that there was enough evidence of possible illegal action by Norton to warrant a criminal referral to the Justice Department’s Public Integrity Section. The inspector general’s inquiry included interviews with many Interior employees.

A federal grand jury in Washington that was probing whether Norton violated any conflicts of interest laws related to Interior dealings with Shell subpoenaed documents from the oil giant in the fall of 2009.

Historically, public integrity probes are complex undertakings and can be difficult to prove, while often proceeding at a tortoise-like pace. For instance, the lengthy Justice-led inquiry into the influence peddling operations of one-time super lobbyist Jack Abramoff that led to 19 convictions – including jail sentences for J. Steven Griles, the former number two at Interior under Norton, ex-Rep. Bob Ney of Ohio, and Abramoff — began in early 2004 and is still underway.