US rig inspectors received gifts from oil companies, report says

By Mark Clayton, Staff writer
posted May 25, 2010 at 11:17 am EDT

The federal agency overseeing offshore oil and natural-gas exploration in the Gulf of Mexico has been cited again for "ethical lapses" that included allowing rig inspectors and others to receive gifts from oil companies.

The lapses are outlined in new report from the Inspector General's Office of the Interior Department, focusing on the actions of employees at the Lake Charles, La., district office of the Minerals Management Service (MMS). The report is a follow-up to a 2007 one, also by the inspector general, about the same district office. Both reports cite violations of federal regulations and agency ethics rules.

The new report alleges that inspectors and others used government computers to view pornography and received sports tickets and lunches from oil companies.


“The Inspector General report describes reprehensible activities of employees of MMS between 2000 and 2008,” Interior Secretary Ken Salazar said in an e-mailed statement. “This deeply disturbing report is further evidence of the cozy relationship between some elements of MMS and the oil and gas industry."

The new report was not released to the press by the inspector general but was described in Secretary Salazar’s e-mail.

Salazar noted his orders to "clean house" at MMS shortly after he took over at the Interior Department in 2009. "I fully support the Inspector General’s strong work to root out the bad apples in MMS and we will follow through on her recommendations," he said in the e-mail.

Earlier this month, Salazar ordered the MMS split into two parts, citing the "conflicting missions" of the revenue-collections mandate of the agency and its safety and enforcement mandate.

The inspector general’s recommendations include taking action to terminate, discipline, and refer workers for criminal prosecution, Salazar said. He also wrote that he has asked the Inspector General's Office to "expand her investigation" to find out if any unethical conduct has occurred since he put in place new agency ethics rules in 2009.

The report on the Lake Charles district office is the second major indictment of the MMS. A 2008 report cited ethical lapses in the agency's Lakewood, Colo., office, where royalty-collections employees were found to be having sex with and accepting gifts from oil-industry personnel.

A key question coming out of the new report is whether MMS inspectors failed to enforce safety and other standards on the drill rigs – and whether policies or practices need to be revised to ensure oil operations in the Gulf are conducted safely, Salazar noted in his e-mail. This is of special concern since the Deepwater Horizon exploded and burned on April 20. The oil from that blowout has so far fouled a large part of the Gulf of Mexico and threatened numerous species.

One report by The New York Times, which cited a leaked copy of the report, said MMS rig inspectors had in some cases allowed industry representatives to write reports in pencil, with the inspectors then writing them over in ink.

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