WaPo: Report Says Oil Agency Ran Amok
Interior Dept. Inquiry Finds Sex, Corruption
Government officials in charge of collecting billions of dollars worth of royalties from oil and gas companies accepted gifts, steered contracts to favored clients and engaged in drug use and illicit sex with employees of the energy firms, federal investigators reported yesterday.
Investigators from the Interior Department's inspector general's office said more than a dozen employees, including the former director of the oil royalty program, took meals, ski trips, sports tickets and golf outings from industry representatives. The report alleges that the former director, Gregory W. Smith, also netted more than $30,000 from improper outside work.
The report from Inspector General Earl E. Devaney contains fresh allegations about the practices at the beleaguered royalty-in-kind program of Interior's Minerals Management Service, which last year collected more than $4 billion worth of oil and natural gas from companies given contracts to tap energy on federal and Indian lands and offshore. The revelations come as Congress is set to consider opening the Arctic National Wildlife Refuge and areas off the coast of Florida for drilling.
The royalty-in-kind program, based near Denver, allows energy companies to pay the government in oil and gas, rather than cash, for the privilege of drilling on government land. It has been the subject of multiple investigations since 2006 by the Interior Department's secretary, its inspector general, the Justice Department and Congress for alleged mismanagement and conflicts of interest.
In the report released yesterday, investigators said they "discovered a culture of substance abuse and promiscuity" in which employees accepted gratuities "with prodigious frequency." The report cited one e-mail from a Shell Pipeline representative asking a woman in the royalty office to attend "tailgating festivities" at a Houston Texans football game: "You're invited . . . have you and the girls meet at my place at 6am for bubble baths and final prep. Just kidding."
Besides Shell, the energy company employees mentioned in the report worked for Chevron, Hess and Gary-Williams Energy. The social outings detailed in the report included alcohol-, cocaine- and marijuana-filled parties where certain employees of the Minerals Management Service were nicknamed the "MMS Chicks" by the energy employees. The companies paid for federal workers to attend football and baseball games, PGA Tour events, Colorado ski trips, paintball outings and "treasure hunts," investigators found.
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The inspector general's release comprised three separate reports, including one devoted to the program's former director, Smith, 56, who resigned last year. It alleges that Smith improperly worked part time for Geomatrix Consultants, an Oakland, Calif.-based environmental and engineering firm, and marketed the company to government clients.
Additionally, the report said, Smith had an inappropriate sexual relationship with a subordinate whom he paid to buy cocaine, allegedly promising her a $250 bonus in return. The report stated that Smith admitted to the sexual encounter.
NYTimes: Sex, Drug Use and Graft Cited in Interior Department
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