Oil brokers’ sex scandal ahead of key drilling vote
It’s a strange mix, and it couldn’t have come at a worse time for those in Congress, pressing to expand oil and gas development off America’s beaches while trying to stave off an election-year rush by Democrats to impose new taxes and royalties on the oil industry.
An Interior Department investigation, describing a “culture of substance abuse and promiscuity” by workers at the agency that issues offshore drilling leases and collects royalties, has hit lawmakers just as they prepared for votes next week on expanding offshore drilling.
“On the eve of Congress starting this big debate you’ve got a horror story of mismanagement and misconduct in programmes that are going to be a key part of the discussion,” Democrat Senator Ron Wyden of Oregon said, adding it can’t help but affect the debate.
The two-year, $5.3 million (€3.8m) investigation by Interior’s inspector general found workers at the Minerals Management Service’s (MMS) royalty collection office in Denver partying, having sex, using drugs and accepting gifts and ski trips and golf outings from energy company representatives, with whom they did government business.
The investigations exposed “a culture of ethical failure” and an agency rife with conflicts of interest, inspector general Earl E Devaney said.
Between 2002 and 2006, 19 oil marketers — nearly a third of the Denver office staff — received gifts and gratuities from oil and gas companies.
“Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representatives.”
The director of the royalty programme had a consulting job on the side for a company that paid him $30,000 (€22,000) for marketing its services to various oil and gas companies, the report said.
MMS director, Randall Luthi, said the agency was taking the report “extremely seriously” and would weigh taking appropriate action in coming months.
But the impact in Congress, where lawmakers are debating an expansion of the offshore oil and gas leasing programme by allowing drilling in areas long off limits, was immediate.
“This is why we must not allow Big Oil’s agenda to be jammed through Congress,” said Democrat Sen Bill Nelson of Florida., who strongly opposes any expansion of offshore drilling.
He said the report “shows the oil industry holds shocking sway over the administration and even key federal employees.”
Both Republicans and Democrats promised further scrutiny of the Interior Department agency, which last year handled $4.3bn in royalty-in-kind payments from energy companies drilling on federal lands. Under the programme, oil companies give the government oil in lieu of cash and the MMS office in turn sells the oil on the open market.
But Republicans rejected suggestions that the scandal makes the need for more offshore oil and gas any less urgent.
