There’s that old expression that defines the “Golden Rule” as “he who has the gold makes the rules.”
Normally, it’s meant to be funny, ironic or even critical.
But the phrase is just sad when it becomes the literal truth.
That’s the case for Wyoming as it fights for about $53 million in mineral royalty payments owed to it from the federal government. Late last month, Wyoming received a letter from the Department of the Interior that said that due to sequestration, money Wyoming is rightfully owed as its share of mineral royalty payments from land insides its borders was being taken because the federal government was a little short on cash.
The background is essential. This is not an entitlement. This is not a program the federal government just established because of benevolence. Something tangible that has market value — namely minerals like coal and gas — were taken from Wyoming.
This isn’t also a matter of the federal government charitably giving what isn’t owed. Both the federal and state government require energy and extraction companies to pay royalties on minerals extracted within Wyoming’s borders. However, to make matters easier for everyone, the companies pay royalties to the federal government which then splits the money and sends it back to Wyoming. It’s done as a convenience — companies can cut one check to satisfy both the state and federal government because supposedly we’re all on the same team.
There is no disagreement about how the royalty payments are structured. There is no philosophical difference about who should collect what. There’s not even a valuation question; that is, there’s no question about how much was extracted and how much should be paid.
Instead, the government collected the rightfully owed mineral royalties and decided to pocket money that should have gone into the state’s coffers.
Unfortunately, the federal government through the Department of the Interior has both the gold and can make the rules. After all, how do you fight the United States of America?
That’s not a rhetorical question.
Instead, it was a question that Wyoming Gov. Matt Mead asked the attorney general’s office to study quickly. Mead asked the state to do everything it could to fight the seizure of the money owed to Wyoming.
The answer he received is there’s not a lot a state can do when the government takes money and won’t give it back.
The federal government and the Department of the Interior can call it whatever they want—“sequestration” or a one-time impounding of the royalties—but the truth of the matter is that the federal government has reneged on a deal. It has taken money that it isn’t entitled to. In other words, it has stolen the funds.
We applaud the state for doing everything it can to stop this injustice. This isn’t analogous to the federal government trimming funds to states for various programs. This has nothing to do with programs. The federal government was simply acting as a fiscal agent for Wyoming and should have been a pass-through. If this were any other organization doing something this outlandish, it’d be accused of embezzlement.
It’s sad when a state has no recourse to sue the government to do the right thing. Moreover, this doesn’t seem like a gray area. It seems like an agreement was hashed out years ago.
The federal government seems to do this because it believes it can. But doing that is akin to saying might makes right. Even if the state could litigate such a case, tax dollars would have to be spent on both sides. In a legal battle to clear this mess, taxpayer dollars would have been spent to fund lawyers on both sides as the state fights the federal government.
The federal government has created a budget mess and now it seems desperate to beg, borrow and, as it turns out, steal in order to solve the problem. But, Washington D.C.’s financial incompetence and leadership deficit shouldn’t mean it’s all right to take what it has no right to.
Beyond seeming both legally and ethically suspect — taking something that doesn’t belong to you would appear to be hard to argue — maybe the most disheartening aspect is that this most recent action by the federal government seems to only reinforce what most people think about Washington, D.C. In other words, this gives people just one more reason to distrust and believe federal government is broken.
That may not be the case, but it’s darn hard to argue that it’s running well when it resorts to these sorts of shenanigans.