Inspector general looking into natural gas royalties lawsuits

A political brouhaha erupted Tuesday over news that Virginia’s top fraud investigator is scrutinizing how the attorney general’s office has handled a series of federal lawsuits over natural gas royalties.

The day began with a flurry of emails by state Democrats highlighting revelations reported by the Bristol Herald Courier that the Office of Inspector General is looking into whether a senior staffer for Attorney General Ken Cuccinelli, the GOP gubernatorial candidate, improperly advised lawyers for energy companies embroiled in a legal battle with Southwest Virginia landowners.

It peaked with Cuccinelli sidestepping reporters’ questions about the state inquiry just moments after he unrolled his campaign’s educational platform during a lengthy event at a Richmond school.

A reporter barely had time to utter the title inspector general before the attorney general cut him off, a video by Richmond news station NBC 12 shows.

“If you have other topics today, you’ve got to ask those of people like [a campaign spokesman],” Cuccinelli interrupted. “Call tomorrow and we’ll talk about something other than education.”

The investigation focuses on the relationship between Assistant Attorney General Sharon Pigeon and lawyers for Pittsburgh-based Consol Energy and EQT Production, the main defendants in a series of lawsuits in which regional landowners are seeking at least $28 million in royalties held in a state-mandated escrow fund.

Consol is also a top contributor to Cuccinelli’s bid for governor, with $111,044 funneled into his campaign’s coffers since 2012, according to campaign watchdog Virginia Public Access Project.

Pigeon sent the lawyers five emails that seem to offer legal advice on how they should fight the plaintiffs’ pursuit of class-action status for the case.

She is also the state’s legal adviser to the Virginia Gas and Oil Board, the state agency that allows energy companies to siphon the natural gas below multiple tracts of land before anyone has decided who owns the gas. The board also makes sure the royalties belonging to the undetermined owners are placed in the escrow accounts for future legal dispute.

Tuesday’s developments were the latest in a governor’s race that has produced plenty of drama.

For example, Democratic gubernatorial candidate Terry McAuliffe has come under fire as co-founder of an electric car company now being investigated by the Securities and Exchange Commission for its conduct in soliciting foreign investors.

And Cuccinelli has grabbed headlines over revelations that he received $18,000 in gifts from a company chief executive now at the center of an investigation of Gov. Bob McDonnell. Cuccinelli has held on to the gifts despite admonitions to return them after McDonnell’s decision to return the thousands of dollars worth of gifts he received.

Tuesday’s drama continued to unfold when Democrats posted to YouTube a video of Cuccinelli ducking reporters’ questions. McAuliffe soon released a statement calling for the attorney general to recuse his office from the lawsuit and as legal adviser to the Gas and Oil Board.

“It is completely inappropriate that Cuccinelli continues his role in the case despite being under investigation for his conduct,” McAuliffe said.

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