- On May 24, Mary L. Kendall, Acting Interior Department
Inspector General's memo to her boss, Secretary Ken Salazar, discussed
an "Investigative Report," titled "Island Operating Company,
et al," addressing allegations that Lake Charles, Louisiana District
Office Minerals Management Service (MMS) employees (in charge of inspections
and oversight) "accepted gifts from oil and gas production companies."
- Occurring prior to 2007, it provides evidence that "a
much-needed (MMS ethics) change is required." Ordinarily, public release
would have followed a formal MMS response, 90 days after getting it. But
today's events forced Kendall "to release it now," saying her
greatest concern is the "environment in which these inspectors operate
- particularly the ease with which they move between industry and government."
- She found evidence that MMS and industry personnel fraternized
and exchanged gifts, and have known each other since childhood. MMS staff
used illegal drugs, viewed pornography on their government computers, and
sent emails with racist comments, citing one manager 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." They've been friends all their lives. "They've hunted
together. They fish together. They skeet shoot together....They do this
all the time."
- John E. Dupuy, Assistant Inspector General for Investigations,
prepared the report for S. Elizabeth Birnbaum, MMS's Director.
- It says industry gifts included hunting and fishing trips,
lunches, and other favors from the Island Operating Company (IOC), working
on Gulf oil and gas rigs. In addition, one inspector was in the process
of "negotiating and later accepting employment with that company."
- The investigation followed an anonymous October 28, 2008
letter, addressed to the New Orleans US Attorney's office, citing improprieties
and recommending an investigation. Dupuy found "a number of MMS employees....admitted
to attending sporting events prior to 2007 in which which oil and gas production
companies sponsored teams, as well as receiving lunches" and other
- His investigation showed a pervasive gift-acceptance
culture in the Lake Charles, LA District Office, suggesting similar improprieties
- MMS leased Gulf drilling sites to about 130 oil and gas
companies, including BP, Exxon Mobil, Shell, Chevron, and many others.
About 4,000 rigs are located throughout four Louisiana districts - Lake
Charles, Lafayette, New Orleans, and Houma - as well as one in Lake Jackson,
- The Outer Continental Shelf Act requires that MMS inspect
these platforms to assure they comply with federal regulations with regard
to safety and environmental considerations, issuing "incidents of
non-compliance" for known deficiencies. From 2004 - 2009, IOC's experience
was instructive. It was fined a mere $572,500, pocket change too little
- The current investigation followed an earlier one into
former New Orleans regional supervisor Don Howard's activities - fired
in January 2007 for accepting drilling contractor gifts, failing to report
them, then making false statements for cover.
- His impropriety "appears to have been a generally
accepted practice by MMS inspectors and supervisors in the Gulf of Mexico
- Gifts included sports tickets, skeet-shooting contests,
hunting and fishing trips, golf tournaments, crawfish boils, Christmas
parties, among others, at times including travel and other expenses. If
they exceed $335 dollars from any one source during the reporting period,
they're required to be disclosed, and the identity of the source.
- According to one former Lake Charles inspector, "everyone
has gotten some sort of gift before at some point," showing a practice
way out of hand, suggesting the possibility that maybe cash and other favors
- According to one inspector, what oil and gas companies
got in return was a "better working relationship." Indeed so,
including letting them prepare their own audits in pencil, inked over by
inspectors to look legitimate - a practice far worse than gross mismanagement.
- It's a crime demanding prosecutions of industry and government
offenders. They're not coming. Informed about the Inspector General's report,
the US Attorney's Office for the Western District of Louisiana declined
further action, absolving serious offenses.
- One or more inspectors also used cocaine and methamphetamine,
may have been under the influence on the job, and not for the first time
according to an internal 2008 investigation, prepared by Inspector General
Earl E. Devaney.
- On May 11, AP noted a "culture of substance abuse
and promiscuity" by MMS inspectors and other workers. The agency has
a duel role - collecting over $10 billion in annual royalties while enforcing
drilling regulations, a clear conflict of interest.
- Devaney found MMS royalty collection personnel having
sex and using drugs with energy company employees, besides inspectors on
the take. He described a "culture of ethical failure" in an agency
rife with conflicts of interests, including the longstanding practice of
being too cozy with the oil and gas industry.
- On May 24, New York Times writer Ian Urbina headlined,
"Inspector General's Inquiry Faults Regulators," saying:
- MMS "inspectors (also) accepted meals, tickets to
sporting events and gifts from at least one oil company (from 2005 - 2007)
while they were overseeing the industry," more evidence of lax oversight
and cozy industry ties.
- "At least seven inspectors cited in the report as
having been involved in inappropriate or illegal activities were still
employed by the agency when the report was completed in March." No
surprise under Ken Salazar's watch at Interior, a man rife with conflicts
- He's a rancher, former Colorado junior senator, and one
of the "Gang of 14" against filibustering extremist Bush judicial
appointments. In addition, he supported Alberto Gonzales for Attorney General,
then introduced and sat with him at his Senate confirmation hearing.
- In 2001, he also backed Gale Norton (a former Colorado
Attorney General) for Interior Secretary, and the worst of her pro-business,
anti-environmental policies. William Myers III as well, a former ranching
industry lobbyist and Interior Department solicitor, for the federal bench
even though the American Bar Association rated him "not qualified."
- It gets worse. His overall environmental record is abysmal.
In 2005, he voted against higher fuel efficiency standards for cars and
trucks, so-called "Corporate Average Fuel Economy" (CAFE). He
also opposed an amendment to repeal tax breaks for Exxon Mobil and other
Big Oil and gas companies, and supports unregulated drilling on federal
lands, including offshore.
- He voted limiting offshore Florida Gulf coast drilling,
and backed subsidies for the livestock industry, ranchers, and other users
of public lands and national forests. He fought efforts to increase Farm
Bill protections for endangered species and the environment, and threatened
to sue the US Fish and Wildlife Service when its scientists determined
that the black-tailed prairie dog was endangered.
- In 2007, he was one of the few Democrats against a bill
requiring the Army Corps of Engineers to consider global warming when planning
water projects. According to Project Vote Smart, the US Humane Society
rated his voting record a low 25%. The Fund for Animals scored him zero
during 2005 and 2006.
- Other critics expressed dismay about a man with close
ranching and mining industry ties as well as no interest in environmental
protection or reforming drilling and other energy development practices.
Unsurprisingly, the criminal Gulf incident happened on his watch, and he's
- When the Interior Department's head is compromised, inspectors
on the take, using drugs, and engaging in other improprieties follow -
apparent longstanding practices at Interior, likely also throughout government
agencies, serving business when they're supposed to be watchdogs.
- A Final Comment
- The Center for Biological Diversity (CBD) reported that
since the April 20 Gulf incident, MMS approved 27 new regional offshore
projects and exempted 26 others from environmental review, from April 21
- May 7 - 26 got "categorical exclusion(s)" under the National
Environmental Policy Act. According to Salazar, Interior has no intention
of stopping new oil and gas operations in the Gulf, despite Obama's announced
- CBD's executive director, Kieran Suckling said:
- "Under pressure from the oil industry and an agency
he seems incapable of controlling, Secretary Salazar has watered down the
drilling moratorium to a point where it is virtually meaningless."
Like Obama, he's more interested in political damage control than protecting
the environment. His "so-called moratoriums and reforms are little
more than rhetorical dispersants designed to break up the hide the political
scandal threatening to wash up on his shore."
- On May 25, New York University Professor Paul Light called
the moratorium "so ridiculous that it defies understanding."
Instead of one with teeth, it "appears to have been basically done
through the most casual way possible under federal law," to deflect
criticism, not institute reform or environmental protection.
- Lewis and Clark Law School Professor Daniel J. Rohlf
said "The moratorium does not even cover the dangerous drilling that
caused the problem in the first place." He and others doubt that the
Interior Department can institute reforms, given its longstanding coziness
with the industry.
- On May 25, the Center for Biological Diversity responded
to the Inspector General's Report, citing an agency "riddled with
illegal drug use, and worst of all, falsification of inspection reports
crucial to ensuring the safe operation of drill rigs in our waters....The
extent of the culture of corruption in the MMS is mind boggling. Steps
(Salazar) proposed to fix this dysfunctional organization do not come close
to what is needed to root out the systematic corruption of the agency."
- Shades of Paddy Bauler, former Chicago alderman who once
famously said: "Chicago ain't ready for reform," nor is it today
under Mayor Richard M. Daley or his predecessors, in Illinois under successive
governors, or in Washington where the criminal class is bipartisan, Obama
no different from the rest, and in many respects much worse.
- Stephen Lendman lives in Chicago and can be reached at
email@example.com. Also visit his blog site at sjlendman.blogspot.com
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