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Report slams oil regulators

Inspectors took gifts from oil companies

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.

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.


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