The Office of Natural Resources Revenue, a division of the U.S. Department of Interior, this week announced it has assessed a civil penalty of $46,772 against Jack J. Grynberg.
The penalty follows a noncompliance notice the agency issued to Grynberg in 2011 alleging he failed to report production on federal leases in Wyoming, Colorado and New Mexico.
“It is mandatory that companies report production on federal leases, so we can ensure that proper royalties are paid on those taxpayer assets,” ONRR Director Greg Gould said in a prepared statement.
In a telephone interview, Grynberg said Thursday that he would investigate the penalty and respond to it.
“The answer to it is we have reported production,” Grynberg said. “Certain wells were shut in which we may not have reported, but we have corrected everything that was delinquent.”
Grynberg said a longtime employee of his company who handles such matters has been ill.
A federal judge in Wyoming dismissed 73 lawsuits Grynberg had filed claiming that natural gas and pipeline companies around the West had underreported their production on federal lands. A federal judge in Washington, D.C., earlier had dismissed a similar lawsuit Grynberg had filed against a number of energy companies.
In bringing the lawsuits, Grynberg had sought payment as a whistleblower under the federal False Claims Act. But U.S. District Judge William Downes of Casper in 2006 rejected Grynberg’s claims that the companies inaccurately measured gas production.
Downes concluded that most of Grynberg’s knowledge of the companies’ gas-measurement techniques was secondhand or speculative. Federal law requires that to collect a bounty, a person must show the government new information about the fraud they allege.
“Grynberg deliberately chose to make sweeping allegations of fraud against nearly the entire industry, based in large part on rank speculation,” wrote Downes, who retired a few years ago. “By employing such odious tactics he now becomes the instrument of his own undoing.”
The 10th Circuit Court of Appeals in Denver upheld Downes’ dismissal of Grynberg’s cases and the U.S. Supreme Court refused to hear the matter.
Downes in 2011 took the unusual step of ruling that Grynberg’s whistleblower lawsuits were frivolous, and that accordingly he was responsible for the legal fees and costs incurred by the companies he had sued.
The litigation over the fee question continues in federal court in Wyoming before U.S. District Judge Alan B. Johnson of Cheyenne. A special master recently reported to Johnson that legal expenses for a few dozen energy companies still pressing the matter could top $17 million.
Johnson hasn’t ruled yet on the fee issue. Until that matter is settled, Grynberg can’t appeal Downes’ underlying ruling that he’s on the hook for the companies’ legal expenses.
Asked if he had any comment about the federal government concluding that he had failed to report production on federal leases after accusing so many others of failing to report accurately, Grynberg said, “No, I’m not going to make any comments until I see what it is, and find out about it. The point is this, I don’t know about Wyoming, but I know Colorado’s all correct, and so is New Mexico. And we will respond.”
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