In January 2006, Norton's Interior Department awarded three oil shale leases on federal land in Colorado -- potentially worth hundreds of billions -- to a subsidiary of Royal Dutch Shell. Two months later, Norton resigned, saying she had no job lined up. But later that year, she was hired by Shell as in-house counsel.
The Feds are said to be looking at whether Norton broke either of two laws: One which prohibits federal employees from discussing employment with a company while that company is involved in dealings with the government that could benefit it; and a second, the "denial of honest services" law, which makes it a crime for a government official to "violate the public trust" by, for instance, giving contracts to friends or associates.
"If [Norton] had feelers out, or was in discussions with Shell in any way, she is absolutely forbidden from participating in any way from doing anything with Shell," a law enforcement official told the LA Times.
Conservatives may call this a political prosecution. But the probe was actually begun during the final months of the Bush administration, by the department's own inspector general. That was Earl Devaney, a respected veteran of government service who is now the watchdog for the stimulus funds. More recently, a criminal referral was made to the Justice Department, after the Interior investigators concluded that there was sufficient evidence of potential illegal activity.
A closer look at the decision to award Shell the leases helps explain why that conclusion might have been reached.
The story starts with Dick Cheney's energy task force, which recommended aggressive efforts to encourage private industry to develop ways to extract oil from shale rock. The Bureau of Land Management then issued six oil shale "research, development and demonstration" leases, which each granted access to up to 160 acres of federal land in the west, in order to develop shale programs.
Shell seems to have been hooked into the process almost from the start. It filed its first application for a lease just one day after the department issued its call for proposals in June 2005.
Then in August, Congress changed the law to allow companies to own more than one oil shale lease, which they had previously been prevented from doing. Although Interior Department officials said they did not notify potential bidders about the law change, Shell quickly filed two more applications. No other company applied for more than one lease. In early 2006 -- after recommendations by an interdisciplinary team involving officials form other government departments -- the interior department announced that it would award the three leases to Shell.
Critics had also charged that giving three leases to Shell defeated part of the purpose of the initiative, which was to allow companies to test different methods for the extraction process. Shell's three leases were for a variation of the same process.
Then, that December, Shell announced that it had hired Norton as in-house counsel to its unconventional fuels division, which includes oil shale. She remains in the job today.
This isn't the first time that Norton's interior department -- and potentially the secretary herself -- has been implicated in muck. Jack Abramoff funnelled $500,000 to a pro-industry group Norton founded, the Council of Republicans for Environmental Advocacy, calling it "our access to Norton." The group's director, Italia Federici, a former Norton aide, then used her access to Norton and Interior number 2, Steven Griles -- who she was dating -- to make sure that Abramoff was taken care of. Federici pleaded guilty in 2007 to tax evasion and obstruction of Congress. Griles did jail time after pleading guilty the same year to lying to investigators.
Norton had long been considered a potential subject of inquiry in connection to the same events, but has never been charged.