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US oil officials in sex scandal

BBC News

US oil officials in sex scandal

Oil derrick in Texas (file)

The improprieties involved employees of the Minerals Management Service

US government officials responsible for collecting revenue from oil companies have been accused of being involved in a culture of “ethical failure”.

An investigation by the Department of the Interior said some of its employees had accepted gifts from and had sex with workers whom they were overseeing.

Others are accused of rigging contracts and working as private consultants.

The department is responsible for collecting billions of dollars a year from firms drilling on US federal land.

Some of the most senior officials who have been accused of misconduct have already retired or resigned.

The oil companies named in the report were Chevron Corp, Shell Oil, Hess Corp and Gary Williams Energy Corp.


The two-year investigation by the interior department’s inspector general, Earl E Devaney, uncovered a “culture of substance abuse and promiscuity” by a small group of individuals “wholly lacking in acceptance of or adherence to government ethical standards”.


 Employees said they felt that in order to effectively perform their official duties, they needed to interact in social settings with industry representatives to obtain ‘market intelligence’ 
Earl E Devaney, Inspector-General, US Department of the Interior

“Sexual relationships with prohibited sources cannot, by definition, be arms-length,” Mr Devaney said in his report.

The alleged improprieties occurred between 2002 and 2006, and involved 19 former and current employees at the offices in Denver and Washington of the department’s Minerals Management Service (MMS).

The officials were involved in the “royalty-in-kind” programme that collects and sells oil and gas handed over by energy companies in return for permission to drill on federal land. About $4bn was collected last year.

Mr Devaney said a third of the 55 staff in the Denver MMS office were found to have socialised with and had received a wide array of gifts from companies with whom they were conducting business. Two oil marketers received gifts and gratuities on at least 135 occasions.

He cited one example of MMS staff accepting accommodation “after industry events because they were too intoxicated to drive home or to their hotel”.


 Taxpayers deserve to have confidence that their interests are being protected 
Sen Jeff Bingaman

Several members of staff in one office admitted to illegal drug use as well as being “engaged in brief sexual relationships with industry contacts”, he added.

The inspector general said that many of those questioned did not believe federal government ethics standards and department policies had applied to them because of their “unique” role.

“Employees said they felt that in order to effectively perform their official duties, they needed to interact in social settings with industry representatives to obtain ‘market intelligence’,” Mr Devaney said.

A senior Democrat said it appeared that officials who were supposed to be looking out for taxpayers had instead been corrupted by gifts and a culture of ethical failure.

“American taxpayers deserve to have confidence that their interests are being protected when it comes to collecting royalties from the production of public oil and gas resources, especially given the potential for expanded domestic drilling,” said Sen Jeff Bingaman, chairman of the Senate Energy Committee.

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