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Criminal proceedings against Shell General Counsel Gale Norton?

Friday, October 9, 2009 2:21 PM

Grand Jury Probing Former Secretary Norton

By Peter H. Stone

A federal grand jury in Washington that is probing possible criminal conflicts of interest involving former Interior Secretary Gale Norton’s official and private dealings in 2006 with Royal Dutch Shell has recently issued subpoenas to both Norton and Shell, according to two sources familiar with the investigation.

The grand jury subpoenas are part of a criminal investigation launched earlier this year by the Public Integrity Section at Justice into whether Norton may have broken a federal law in 2006 when the Interior Department granted three lucrative oil shale leases on federal lands in Colorado to Shell which later in the year hired her as general counsel for its unconventional fuels unit in the United States. The Colorado based unit focuses on exploration and production, including shale projects.

The Justice probe is focused primarily on whether Norton broke a law that bars government officials from negotiating future jobs with a company that stands to benefit from official actions.

Asked to comment on the grand jury subpoenas, a Shell spokesman said that the company is “aware of an investigation by the Department of Justice and we will cooperate with any lawful processes. We are unable to provide further comment on the investigation.”

Norton did not return calls seeking comment. Herbert Fenster, an attorney with McKenna Long & Aldridge who has represented Norton in the past, also declined to comment.

The Justice probe, which was first reported last month by the Los Angeles Times, was launched after Justice received a criminal referral from the Interior Department’s Inspector General which had conducted a lengthy investigation during the latter part of the Bush administration into Norton’s dealings with Shell and decided that there was enough evidence of possible illegalities to warrant further inquiry. The IG’s investigation entailed interviews with many Interior employees, according to the paper.

Shell was granted the leases by Interior in early 2006 based on an assessment by an interagency federal team and a few states. About two months later Norton resigned from Interior and stated that she had not yet arranged a job. In December 2006, Shell issued a release that Norton had been hired to be the general counsel for the U.S. at its unconventional fuels unit which handles shale oil projects. Norton joined the unit in January 2007.

The New York Times has also reported that investigators working on the federal inquiry have recently found new information that suggests Norton had talks with Shell about future job prospects while she was at Interior.

The DOJ inquiry is also examining whether Norton may have broken another federal statute involving “denial of honest services” which can be used by prosecutors if a government official’s actions violate the public trust by, among other things, giving federal business to companies or individuals based on their personal ties to the official. The inquiry is looking at whether Shell, the only company to receive three of the lucrative leases in Colorado, received preferential treatment.

An analysis by Shell and the Rand Corp. has indicated that over the years needed to extract the oil, the leases could be worth hundreds of billions of dollars.

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