Louis Dreyfus Energy Services has paid the United States $4,084,000 to settle allegations that it violated the False Claims Act by failing to pay money owed on natural gas acquired from the Department of the Interior, which is to say U.S. taxpayers.
The Justice Department in a release today claims that Louis Dreyfus, a privately held firm based in Connecticut, made “false claims or misleading statements” to the Department of the Interior involving contracts to buy natural gas produced from federal oil and gas leases in the Gulf of Mexico.
Under a plea bargain, there has been no determination of liability, though, and critics of Interior say it is a bloated bureaucracy whose complex regulations stand in the way of energy development. In spite of this, the U.S. oil and natural gas industry is responsible for 9 million jobs and roughly 8% of the gross domestic product.
Starting in 2004, Louis Dreyfus agreed to pay the Interior Department for natural gas based on a price associated with the delivery of the gas at a fixed point along a natural gas pipeline. After its contracts with the Interior Department were executed, the company requested and received a discount in the price it would pay the Interior Department for the natural gas obtained under the contracts.
The United States contends that this price discount applied only when there was a constraint in the natural gas pipeline such that Louis Dreyfus was unable to transport natural gas along the pipeline.
However, the energy services company claimed the price discounts even on days when it was able to ship natural gas along the pipeline. Therefore, the United States contends that Louis Dreyfus was not entitled to the price discounts that it sought and received from the Department of the Interior.
“The American taxpayers will not tolerate those that claim price discounts from the United States to which they are not entitled,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.
Louis Dreyfus did not immediately respond to a request for comment and elaboration by AutoInformed.