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Blog: Some in Congress Want Bookkeepers and Secretaries to Be Personally Liable for Oil Companies' Royalty Payments

September 2, 2021

By David Bernhardt

Congressman Raul Grijalva, the Chairman of the House Natural Resources Committee, claims to be someone who always fights for underrepresented voices. Apparently, that fight does not extend to any bookkeeper, clerk, or secretary working in the oil and gas sector. Rep. Grijalva wants to make these individuals personally liable for the payment obligations of companies that hold oil and gas leases. In other words, Rep. Grijalva is trying to make the employee or contractor personally responsible for their boss’s bill. Anyone who does such work for the leaseholder, such as processing payments or submitting reports related to royalties, whether an employee or an outside contractor, would be personally liable for the payment obligation of the oil or gas company if the oil or gas company’s payment was inaccurate or unpaid. So much for standing up for the little guy, this legislation will stick it to them.

Of course, this radical effort to impose personal liability on secretaries and bookkeepers was not highlighted in any press release. Instead, it is buried on page 89 of a 119-page proposal that the Democrats of the House Committee on Natural Resources included as part of their massive budget reconciliation effort.

We can expect the DC lobbying establishment to be spun up dealing with this massive reconciliation bill. Many will fight the tax proposals included in the radical green new deal provisions. Others within the DC establishment are salivating at the prospect of getting massive potential funding for their corporate welfare clients. These “big ticket” items will capture the focus of the media and the lobbying community, but who is standing up for the secretaries? It’s unlikely that any bookkeeper or employee of a fossil fuel company who makes payments or submits reports with respect to payments of federal oil and gas leases will even realize that Mr. Grijalva is out to get them before the idea becomes law.

Chairman Grijalva and his colleagues on the Natural Resources Committee have decided that simply by fulfilling the paperwork their jobs require, these bookkeepers, not to mention their entire families, could find themselves bankrupt due to a dispute over the payment of a royalty on someone else’s federal lease. For those unfamiliar with federal oil and gas royalties, rest assured that the determination of what is owed can lead to massive disputes that take years to resolve with the Department of the Interior.

Unlike a big energy company, the typical clerk, bookkeeper, or secretary does not have folks waiting in the wings to duke it out in court with the United States. Worse yet, if a proposal like this becomes law, you can be certain that the bureaucracy within the Department of the Interior will utilize it to go after the little guys. With this proposal, Congress is essentially tasking the bureaucrats at Interior to bankrupt a family for the failure of an oil company to pay its bill.

This kind of legislation is nonsense. If Mr. Grijalva is going to try to make clerks personally liable for the financial obligations of leaseholder, Mr. Grijalva must quit claiming to be the champion of the underrepresented. The House Natural Resources Committee is just one of dozens of committees in Congress that will be developing language to achieve the Biden Administration’s new vision for America. Watch out for more.

David Bernhardt serves as Chairman, Center for American Freedom for the America First Policy Institute (AFPI).