Dept. of Interior Oil Scandal


Yesterday, the Inspector General of the Department of the Interior released multiple reports revealing widespread corruption in the Mineral Management Services agency, which handles mineral extraction, leases, and royalties for the Department of the Interior. The allegations show employees receiving illegal gifts, graft, filing false statements on ethics forms, using illegal drugs, and having sex with both subordinates in the agency and with agents of oil and gas companies with business before the agency.

Here are some of the allegations:

Lucy Denett, former associate director of minerals revenue management: accused of steering a contract to one of her aides after he retired.

Gregory Smith, former director of the royalty-in-kind program: accused of doing outside consulting work that included using his position to help the company paying him gain access to clients doing work with the royalty-in-kind program; billing Mineral Management Services for trips made in conjunction with his outside consulting work; accepting over $1,000 in gifts from oil and gas companies; using cocaine with a subordinate; having sex with two subordinates, where one episode is clearly a sexual assault.

Eight other employees: Socialized with and received gifts from companies with business before the royalty-in-kind program. Two of these employees are also alleged to have used drugs and had sexual relations with various agents of oil and gas companies with business before the program.

Here’s CNN reporting on the report:

The IG reports are available at ProPublica where Paul Kiel is providing running coverage.

Since 2001, when President Bush took office, the Department of the Interior was beset by problems arising from the appointment of officials who previously worked in or with the industries that the Department is intended to oversee.

Both the Secretary of the Interior, Gale Norton, and the Deputy Secretary of the Interior, Steven J. Griles, came from the extraction industries. Norton worked for a law firm that lobbied for a variety of companies, including oil, gas, and metal companies. Griles previously worked for a natural resources company and later provided public relations advice to a variety of extraction companies doing business with the government. Both Norton and Griles wound up caught in the Jack Abramoff lobbying scandal. Norton resigned her post as the scandal encroached into the Department of the Interior, while Griles wound up pleading guilty.

Ethical standards trickle from the top on down. Some of the officials involved in this current scandal expressed the opinion that they “didn’t think ethics rules applied to them because of their ‘unique’ role in the agency and that they needed to socialize with industry representatives for ‘market intelligence.'” The Mineral Management Services scandal has been brewing for a long time and highlights a lack of oversight that occurs when a Department is staffed with individuals who are used to making money from the business they are charged with regulating.