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Shell starts corruption scandal inquiry

Shell starts scandal inquiry

Federal report on fraternizing with regulators prompts move

By DAVID IVANOVICH Copyright 2008 Houston Chronicle Washington Bureau

Sept. 12, 2008, 9:23PM

WASHINGTON — Houston’s Shell Oil Co. has launched an internal probe to examine the explosive findings of the Interior Department’s Inspector General regarding fraternizing between oil company workers and the U.S. Minerals Management Service.

Calling the inspector general’s report “very concerning,” Shell President Marvin Odum said he has started an investigation to make sure there wasn’t “inappropriate behavior within my company.”

Inspector General Earl Devaney earlier this week issued a series of blistering reports accusing federal employees of accepting gifts from industry representatives, engaging in sexual encounters with oil and gas company employees and rigging bids to throw work to a former colleague.

Company officials said they expect Shell employees to “comply with all laws and regulations and hold themselves to the highest standards. Employees who do not comply with Shell’s strict code of ethical standards are subject to disciplinary action.”

Shell was one of four oil companies Devaney identified whose representatives had questionable relationships with agency employees.

One oil marketing specialist for the Minerals Management Service, for instance, received more than $1,000 worth of gifts, including meals, lodging and snowboarding equipment, from Shell between 2002 and 2006, Devaney found.

That marketing specialist, one of two women Shell employees had dubbed the “MMS chicks,” revealed she had had a romantic relationship with a Shell Pipeline Co. employee. The agency employee, however, did not believe she should recuse herself from doing business with Shell, Devaney reported.

A Shell Pipeline representative — the report does not make clear whether this is the same individual involved in the romantic relationship — sent an e-mail inviting the Minerals Management Service employee to a tailgating party at a Houston Texans football game: “Have you and the girls meet at my place at 6 a.m. for bubble baths and final prep. Just kidding … ”

That same Shell employee had sent out another e-mail to invitees that Devaney’s report described as “laden with sexual innuendo.”

The Shell Pipeline employee declined to be interviewed by Devaney’s office.

Besides Shell, Devaney’s report also pointed to Chevron Corp., Hess Corp. and Gary Williams Energy Corp. All three have said they have cooperated with the investigation.

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