Alaska News

Paperwork for settlement between Alaska gas producer and federal agency was lost

An approval packet for a long-awaited settlement between a Cook Inlet gas company and the U.S. Department of Homeland Security over a $15 million fine has apparently been lost, the red-faced Justice Department says.

The missing paperwork is contributing to "embarrassing delays" and a new effort to finish the deal despite the "turmoil" in the department, according to an attorney in the Justice Department.

Natural gas producer Furie Operating Alaska has challenged the fine that stemmed from its decision to haul the Spartan 151 jack-up rig to Alaska in 2011 to conduct exploration drilling in Cook Inlet.

U.S. Customs and Border Protection, an agency with Homeland Security, charged the company with violating the Jones Act, a post-World War I law that requires U.S.-flagged ships be used when cargo is hauled between American ports. Furie had used a foreign ship to carry the jack-up rig on part of the journey between Texas and Cook Inlet.

A preliminary settlement in the Jones Act case was reached last year, but the details have never been publicly released. The settlement has been awaiting final approval from the Justice Department for months.

Richard Pomeroy, assistant U.S. attorney in Alaska and representing Homeland Security in the case, said in a court filing on Tuesday that the delay in receiving final approval occurred because "the approval packet seems to have been lost."

Pomeroy wrote that he understood from Justice Department employees that the deal had been approved, but he could find no record of it and now key employees have left the department. The papers seem to have gotten lost as they were transferred between Justice Department divisions, but Pomeroy indicated it should soon be approved despite "turmoil" in the department.

In his status report, filed with the U.S. District Court in Alaska, Pomeroy did not say what has caused the turmoil. He did not immediately respond to requests for comment Thursday afternoon.

His filing came a day after newly inaugurated President Donald Trump on Monday fired the head of the Justice Department, Acting Attorney General Sally Yates, for refusing to enforce his immigration order barring entry for citizens of seven Muslim-majority countries into the United States.

In his filing, Pomeroy said the final request for settlement was submitted to the Federal Programs Branch in the Justice Department's civil division. But the case was transferred to the department's Admiralty Section, since it involved the Jones Act.

"The packet for approval of the settlement was thought to have 'gone up' in November through the assistant attorney general for the civil division's office to the associate attorney general for approval," Pomeroy wrote.

But those people have left the department. Pomeroy wrote that "no one who is still around can find where the matter was approved."

The Justice Department employees told him they thought the settlement had been approved, but no one can find record of that decision, he said in the filing. There is no record it was assigned the tracking number normally associated with such cases, he said.

Pomeroy said he has revised the approval paperwork for current officials.

"Because of these embarrassing delays, the case is being expedited for approval," he said. "Despite the current turmoil in the department, I was told that it would be approved in no less than a week. Every effort will be made to obtain the approval sooner."

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