STATE TO AUDIT FOR MILLIONS
Jul 6, 2000
Montgomery - Alabama landowners could be in line for millions of dollars if a plan to audit oil companies is as successful as State Treasurer Lucy Baxley hopes.
At the suggestion of Gov. Don Siegelman, Baxley has signed a contract with the Mobile law firm of Cunningham, Bounds, Yance, Crowder & Brown to audit oil companies to see if they are holding royalty payments belonging to Alabama landowners whom the companies have been unable to contact.
Baxley said that under state law, the unclaimed money is supposed to be turned over to the state treasurer’s office, which then tries to track down the owners or their heirs. If her staff can’t find the owners, then the money is the state’s to use.
“I’m told it’s really, really huge amounts,” Baxley said Wednesday.
The contract with the Mobile law firm is up for study today by the Legislature’s Contract Review Committee. Some committee members said Wednesday they consider it a novel idea and expect no objections.
Siegelman hired the Mobile law firm last year to represent the state in a legal dispute with three oil companies over royalties due the state from oil and natural gas wells drilled in state waters.
Members of the firm contributed to Siegelman’s 1998 campaign for governor. Richard Dorman of the firm served as chairman of the board of Siegelman’s Alabama Education Lottery Foundation last year.
The contract calls for the law firm to keep 14 percent of any money it recovers, plus another 3 percent for expenses. If the firm recovers nothing, the state doesn’t owe it a dime, Baxley said.
She said such contracts are normal in the search for unclaimed property.
Any money recovered by the audit will be posted on the state treasurer’s Web site. The site lists 1 million names and $102 million in unclaimed property. Often times, it is stocks or bank deposits that belonged to a deceased person, who did not notify his heirs of the holdings and did not give any names of next of kin to the corporation or bank.
Baxley said less than one-third of the unclaimed property turned over to the state is ever claimed by the owners or their heirs.
Even if the state pays 17 percent of the money recovered to the law firm, the state would still come out ahead financially if most of the owners never claim their money.