[THS] Interior Probe Finds Fraternizing, Porn and Drugs at MMS Office in La.

Wed May 26 13:42:48 CEST 2010

http://www.informationclearinghouse.info/article25540.htm

Interior Probe Finds Fraternizing, Porn and Drugs at MMS Office in La.

By NOELLE STRAUB of Greenwire

May 25, 2010 "NY Times" - - Federal officials who oversaw drilling in the Gulf of
Mexico accepted gifts from oil companies, viewed pornography at work and even
considered themselves part of industry, the Interior Department inspector general
says in a new report (pdf).

Those revelations, sure to intensify criticism of federal oversight of offshore drilling as
the massive Gulf leak continues, will take a starring role at a congressional hearing
tomorrow.

The investigation uncovered violations of federal regulations and ethics rules by
employees of the Lake Charles, La., office of the Minerals Management Service, the
federal agency that oversees offshore drilling.

Interior Acting Inspector General Mary Kendall said her greatest concern is "the
environment in which these inspectors operate -- particularly the ease with which
they move between industry and government."

She added: "We discovered that the individuals involved in the fraternizing and gift
exchange -- both government and industry -- have often known one another since
childhood."

MMS Lake Charles District Manager Larry Williamson told IG investigators that many
of the MMS inspectors had worked for the oil and gas industry and continued to be
friends with industry representatives.

"Obviously, we're all oil industry," he said. "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."

A source told IG investigators that oil and gas officials on the platform had filled out
inspection forms, which would then be completed or signed by an MMS inspector.

The IG also "found a culture where the acceptance of gifts from oil and gas
companies were widespread throughout that office," although that has improved in
recent years, the report says.

Two employees at the Lake Charles office also admitted to using illegal drugs during
their employment at MMS. The IG found that many of the inspectors had e-mails that
contained inappropriate humor and pornography on their government computers.
And between June and July 2008, one MMS inspector conducted four inspections of
offshore platforms while in the process of negotiating and later accepting
employment with that company.

While the report was not due to be released yet, Kendall said in light of the Gulf
disaster, she felt compelled to release it now. The investigation was sparked by an
anonymous letter in October 2008 to the U.S. attorney's office in New Orleans
alleging that a number of MMS employees had accepted gifts from companies.

The IG presented the findings to the U.S. Attorney's Office for the Western District of
Louisiana, which declined prosecution, the report says.

The report is a follow-up to a blockbuster IG report released in 2008 that detailed a
sex, drugs and illegal gifts scandal at MMS (E&ENews PM, Sept. 10, 2008).

Details

A former MMS inspector sent an e-mail with pictures of the company plane on which
he, an oil company official and others flew to Atlanta for the 2005 Peach Bowl game.

"E-mails for MMS inspectors from the Lake Charles office revealed that in 2005, 2006,
and 2007, various offshore companies invited MMS personnel to events such as
skeet-shooting contests, hunting and fishing trips, golf tournaments, crawfish boils,
and Christmas parties," the report says.

One former MMS official wrote an e-mail saying he had "good friends" in the industry
that he "wouldn't write up."

The gift culture declined after Don Howard, the former regional supervisor at the
MMS office in New Orleans, was fired in 2007 for accepting a gift, the report says.

"Prior to our investigation of Howard, receiving gifts such as hunting trips, fishing
trips, and meals from oil companies appears to have been a generally accepted
practice by MMS inspectors and supervisors in the Gulf of Mexico region," it says.

The IG found numerous instances of pornography and other inappropriate material
on the e-mail accounts of 13 employees, six of whom have resigned. There were 314
instances in which the seven remaining employees received or forwarded
pornographic images and links from their government e-mail.

An MMS clerical employee told investigators that she began using cocaine and
methamphetamine with an inspector when she started working at the agency about
two years ago. The MMS inspector admitted that while he did not use the drug at
work, he might have been under the influence of crystal methamphetamine at work
after using it the night before.

A source told IG inspectors that company personnel completed inspection forms
using pencils, and MMS inspectors would write on top of the pencil in ink and turn in
the completed form. While IG inspectors reviewed a total of 556 files to look for any
alteration of pencil and ink markings, notations or signatures and found a small
number with pencil and ink variations, they could not discern if any fraudulent
alterations were present on these forms.

Interior response

Kendall will testify tomorrow before the House Natural Resources Committee at an
oversight hearing on the oil spill, the panel announced today. Interior Secretary Ken
Salazar had already been scheduled to appear before the committee.

"The Inspector General report describes reprehensible activities of employees of MMS
between 2000 and 2008," Salazar said in a statement. "This deeply disturbing report
is further evidence of the cozy relationship between some elements of MMS and the
oil and gas industry."

"I appreciate and fully support the Inspector General's strong work to root out the
bad apples in MMS, and we will follow through on her recommendations, including
taking any and all appropriate personnel actions," he added. "In addition, I have
asked the Inspector General to expand her investigation to determine whether any of
this reprehensible behavior persisted after the new ethics rules I implemented in
2009."

Salazar noted that within 10 days of becoming Interior secretary, he asked the
Justice Department to reopen criminal investigations of employees involved in the
2008 report and promised to update departmental ethics policies and overhaul MMS's
royalty collection system (E&ENews PM, Jan. 29, 2009).

Several of the employees mentioned in the new report have resigned, been fired or
been referred for prosecution, Interior said. Those who are still working at MMS will
be placed on administrative leave pending the outcome of a personnel review, the
department added.

Salazar also has asked the inspector general to investigate whether there was a
failure of MMS personnel to adequately enforce standards or inspect the Deepwater
Horizon offshore facility and whether there are deficiencies in MMS policies or
practices that need to be addressed to ensure offshore operations are conducted in a
safe and environmentally sensitive manner, Interior said.

Salazar has signed a secretarial order splitting MMS into three agencies to separate
its energy development, enforcement and revenue collecting functions. The three
jobs currently performed by MMS, which collects $13 billion in revenue every year,
"are conflicting missions and must be separated," he said last week (E&ENews PM,
May 19).

Reaction

The report drew swift rebukes from lawmakers.

"As if catching MMS employees literally in bed with industry officials wasn't enough,
MMS safety inspectors were flying high in private jets taking bribes while allowing oil
and gas companies to fill out their own safety inspection forms," said House Natural
Resources Committee Chairman Nick Rahall (D-W.Va.). "It's past time for MMS to
stop acting as a farm team for the industry -- the Deepwater Horizon oil rig explosion
is proof that this isn't just a game."

Senate Interior Appropriations Subcommittee Chairwoman Dianne Feinstein said her
panel will hold a hearing on the administration's proposed restructuring of MMS on
June 16.

"This new Inspector General report is yet another black eye for the Minerals
Management Service," Feinstein said. "Once again, MMS employees have been found
culpable of performing shoddy oversight of offshore drilling. The report reveals an
overly cozy culture between MMS regulators and the oil industry. ... The agency
clearly falls short of providing effective oversight of the safety of deepwater drilling or
the ethical collection of drilling royalties."

Darrell Issa (R-Calif.), ranking member of the House Oversight and Government
Reform Committee, said there have been 10 IG reports and nine Government
Accountability Office reports on MMS, but it took a "massive catastrophe to get
anyone to read these reports and agree on the need for a massive bureaucratic
overhaul."

"In typical Washington fashion, it takes something going horribly wrong, yet entirely
avoidable before anyone pays attention to the long-standing need for reform," Issa
added in a statement. "The report released today echoes the same problems that
have been exhaustively reported on for years. From Toyota to Tylenol to BP, we are
seeing the consequences of what can happen when the Congress and the
Administration abdicate their obligations to scrutinize the bureaucracy and conduct
ongoing and vigilant oversight."

Click here (pdf) to read the IG report.