Gulf oil spill drilling inspectors took gifts, sex and drugs from oil, gas companies

  Posted by - May 26, 2010 at 2:08 am - Permalink - Source via Alexander Higgins Blog
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WASHINGTON — The federal government’s much-maligned watchdog agency for oil and gas drilling took another hit Tuesday, when auditors said offshore drilling inspectors took gifts from companies they were supposed to regulate and may have falsified safety reports.

In a scathing report on federal regulators in Louisiana, the Interior Department’s inspector general said inspectors from the Minerals Management Service admitted frequently accepting skeet-shooting outings, meals, trips and college football tickets from the companies they were responsible for overseeing.

One inspector completed four safety reviews of an offshore platform operator even as he was negotiating with that operator for a job, the report said. Two federal employees admitted using cocaine and crystal methamphetamine, and investigators found several others had used their government e-mail accounts to spread pornography and racist comments.

The report investigated alleged improprieties at the Minerals Management Service’s Lake Charles, La., district office from 2000 to 2008, under the Clinton and Bush administrations.

Interior Secretary Ken Salazar announced earlier this month that he would break up MMS into three parts – one responsible for safety, another for leasing drilling rights, and a third for collecting royalties owed the government. His decision followed criticism on Capitol Hill over a string of sex, drug and financial scandals – culminating in the MMS’ failure to aggressively police deepwater drilling and force companies to plan for a potential oil spill, until the Deepwater Horizon rig exploded and sank in the Gulf of Mexico in April, killing 11 workers.

The scandals share a common theme: a tight-knit and potentially corrupt relationship between MMS regulators and the oil and gas industry.

Acting Inspector General Mary Kendall reported that she was particularly concerned with “the ease” with which federal inspectors “move between industry and government.”

Her report quotes one manager as saying: “Obviously, we’re all oil industry. We’re all from the same part of the country. Almost all of our inspectors have worked for oil companies out on these same platforms. They grew up in the same towns. Some of these people they’ve been friends with all their life. They’ve been with these people since they were kids. They’ve hunted together. They fish together. They skeet-shoot together. … They do this all the time.”

Another MMS official said companies tried to bribe him “all the time” and that he accepted gifts from “good friends that I wouldn’t write up anyway.”

Previous IG reports have detailed sex, drug use and other improprieties among MMS employees in Colorado and representatives of industries they regulated. One investigation led to the criminal conviction of a former MMS official for accepting unreported gifts.

The latest report says the culture of gift acceptance appears to have declined at MMS since that official, Don Howard, was investigated and fired in January 2007.

Salazar installed strict ethics guidelines at MMS when he took office in 2009. On Tuesday, he called the report “deeply disturbing” and said he had asked Kendall to broaden her investigation to include the time since he took office.

According to investigators, MMS inspectors accepted from industry representatives meals, entrance fees to skeet-shooting competitions and a trip to see Louisiana State University beat Miami in the 2005 Peach Bowl.

Sources within MMS told investigators that inspectors allowed industry officials to fill out their own inspection forms in pencil. Investigators examined more than 500 forms but could not determine whether fraud had been committed.

Members of Congress cited the latest report and previous reports as evidence that MMS is too close to the industry it regulates.

“It’s past time for MMS to stop acting as a farm team for the industry,” said Rep. Nick Rahall II, D-W.Va., chairman of the House Natural Resources Committee. “The Deepwater Horizon oil rig explosion is proof that this isn’t just a game.”

The top Republican on the House Committee on Oversight and Reform, Rep. Darrell Issa of California, said the report “echoes the same problems that have been exhaustively reported on for years. In the course of a decade, we’ve had 10 IG reports, 9 GAO reports and a report released just last year by Oversight Committee Republicans highlighting the failures within MMS. And yet it still took a massive catastrophe to get anyone to read these reports and agree on the need for a massive bureaucratic overhaul.”


 

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