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The unmistakable smell of corruption at Shell

Subpoenas issued in probe of ex-Interior secretary

A grand jury investigates whether Gale Norton broke federal laws in overseeing a process that awarded lucrative leases to Shell, which later hired her. Prosecutors will review company records.

By Jim Tankersley and Josh Meyer

Saturday October 10, 2009

Reporting from Washington –

A federal grand jury has subpoenaed records from Royal Dutch Shell PLC as part of a Justice Department investigation into corruption allegations against former Interior Secretary Gale A. Norton, according to sources close to the investigation.

The subpoenas and the inclusion of a grand jury are signs of escalation in the investigation, which focuses on whether Norton violated a federal law barring government officials from overseeing any process that could financially benefit a company that the official is negotiating with for future employment.

Investigators are also examining whether Norton broke a broader federal law that bars government officials from denying “honest services” — violating the public trust by, for example, steering government business to favored firms or friends.

The subpoenas ask Shell to hand over expense reports from high-ranking company officials, executive travel records, interoffice e-mail messages and other records. In an e-mail late Friday, a Shell spokeswoman said “we are aware of an investigation, and we will cooperate and comply with any lawful process.”

Prosecutors are investigating whether Norton was discussing future employment with Shell before she stepped down as Interior secretary in March 2006, when she was in charge of a process that resulted in Shell winning three lucrative leases to research and develop oil shale projects on federal land in Colorado.

Nine months after resigning, Norton accepted a job in a Shell division that includes its oil shale efforts.

Sources close to the investigation confirmed that subpoenas were issued to Shell. Investigators from the Interior Department, who began the investigation in 2008 before referring it to the Justice Department this summer, already have access to Norton’s phone and travel records, e-mail messages and other information.

One federal law enforcement official said that grand jury subpoenas are common in the early stages of an investigation because they give authorities access to information that Interior investigators cannot get, including financial records and communications of Shell officials.

The law enforcement official, who like others spoke on the condition of anonymity because it is illegal to discuss grand jury matters, said that it normally takes prosecutors months to get and analyze such records, and that investigators usually send out several waves of subpoenas.

Norton has not responded to repeated phone calls seeking comment on the investigation. Herbert L. Fenster, a lawyer who has represented Norton in the past, declined to discuss the investigation Friday.

A Shell spokeswoman did not immediately respond to a call and e-mail requesting comment on the grand jury subpoenas Friday.

When the Tribune Washington bureau first reported the Justice Department investigation last month, Shell spokeswoman Kelly C. op de Weegh declined to comment, saying the company had not been formally notified.

Shell received three of the six leases the Interior Department issued as part of a Bush administration effort to unlock the Mountain West’s vast resources of oil shale — rocks that release liquid petroleum when heated to extreme temperatures — for commercial development.

Combined, those leases could bring Shell hundreds of billions of dollars’ profit at today’s oil prices, according to analyses by Shell and a Rand Corp. expert.

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Copyright � 2009, The Los Angeles Times

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