Literally In Bed With Big Oil

By Bristol Herald Courier Editorial Board

Published: September 15, 2008

For all the jokes about the federal government and the Republican administration being in bed with Big Oil, it appears that’s exactly what has been happening.

They also were drinking alcohol, using drugs and accepting gifts and trips, investigators found.

An Interior Department Inspector General’s report describes a “culture of substance abuse and promiscuity” by workers at the agency responsible for collecting royalties and issuing offshore drilling leases.

An investigation that lasted two years and cost more than $5 million showed that workers at the Denver-based Minerals Management Service’s royalty collection office were drinking alcohol, having sex, using drugs and accepting trips and money from energy company representatives with whom they did government business. In his report, Inspector General Earl E. Devaney said the investigation uncovered “a culture of ethical failure” and an agency full of conflicts of interest.

Investigators found that 19 oil marketers, or nearly one-third of the Denver staff, received gifts from oil and gas companies between 2002 and 2006. Those companies include Chevron Corp., Shell, Hess Corp. and Denver-based Gary-Williams Energy Corp., according to the report.

“Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representatives” who called some of the government workers “MMS Chicks.”

Employees didn’t display much remorse, according to investigators.

“Our investigation revealed that many RIK [Royalty in Kind] employees simply felt that federal government ethics standards and DOI [Department of Interior] policies were not applicable to them because of their ‘unique’ role,” the report stated.

U.S. Rep. Nick J. Rahall, D-W.Va., House Natural Resources committee chairman, said: “The activities at the RIK office are so outlandish that this whole IG report reads like a script from a television miniseries.”

Interior Secretary Dirk Kempthorne said he was “outraged by the immoral behavior, illegal activities and appalling misconduct of several former and long-serving career employees.” He also implied people would be fired over their actions: “We must and we will eliminate any remaining negative elements in the Minerals Management Service.”

In most jobs, it’s a given that you would be fired for using drugs, having sex with clients or accepting expensive gifts from customers.

But lawmakers are expected to vote this week on expanding offshore drilling. How can they weigh those plans in light of this disturbing news?

Sen. Bill Nelson, D-Fla., a strong opponent of expanding offshore drilling, especially closer to Florida, said the report “shows the oil industry holds shocking sway over the administration and even key federal employees.”

He’s right. Any assurances otherwise are difficult to believe in the shadow of this damning report.

But don’t expect any slowdown in plans to drill offshore for oil or natural gas, even though it’s not clear that current royalties are being accounted for properly.

Republicans and Democrats promised further scrutiny of the Interior Department agency, which last year handled $4.3 billion in royalty-in-kind payments from energy companies drilling on federal lands. Under the program, oil companies give the government oil in lieu of cash; the MMS office sells the oil on the open market.

What’s the likelihood that all those figures don’t add up?

Rep. Henry Waxman, D-Calif., plans a hearing on the IG findings next week. Two of the committee’s key Republicans – Reps. Tom Davis of Virginia and Darrell Issa of California – criticized Waxman for not pursuing an investigation sooner.

But Republicans rejected suggestions that the scandal makes the need for more resources any less urgent.

House Democrats, at least, offered a broader drilling proposal that lifts moratoria 100 miles from shore and allows energy development beyond 50 miles from shore, if a state agrees. Waters closer than 50 miles would still be protected.

So lawmakers will scold first, then keep pushing to drill offshore from Virginia to Georgia.

We say get the oil if you can get it responsibly – without damaging the environment or the coastal tourism economy. But the government had better be able to account for the money and assure the public that yet another scandal has been cleaned up.