Interiors

Big oil = big fun.

WASHINGTON — As Congress prepares to debate expansion of drilling in taxpayer-owned coastal waters, the Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal — including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct.

In three reports delivered to Congress on Wednesday, the department’s inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service, which collects about $10 billion in royalties annually and is one of the government’s largest sources of revenue other than taxes.

“A culture of ethical failure” besets the agency, Mr. Devaney wrote in a cover memo.

The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch.

[...]

In addition, the report alleges that eight royalty-program officials accepted gifts from energy companies whose value exceeded limits set by ethics rules — including golf, ski and paintball outings; meals and drinks; and tickets to a Toby Keith concert, a Houston Texans football game and a Colorado Rockies baseball game.

The investigation also concluded that several of the officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.”

The investigation separately found that the program’s manager mixed official and personal business, and took money from a technical services firm in exchange for urging oil companies to hire the firm. In sometimes lurid detail, the report accuses him of having intimate relations with two subordinates, one of whom regularly sold him cocaine.

The culture of the organization “appeared to be devoid of both the ethical standards and internal controls sufficient to protect the integrity of this vital revenue-producing program,” one report said.

A spokeswoman for the Interior Department secretary, Dirk Kempthorne, referred inquiries to the Minerals Management Service. The service’s director, Randall Luthi, released a preliminary statement on Wednesday morning saying he had not yet seen the reports but had scheduled a mid-afternoon conference call with reporters.

I'm sure we can expect change from the "Drill here. Drill now." crowd.