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Federal rules don't align with private sector's courtesies

Bob Tippee

The inspector general's report that's knocking over desks at the US Minerals Management Service recalls for this writer an encounter years ago with a petroleum engineer employed by the Department of Energy.

In a hotel grill between the end of a conference and flights home, an Oil & Gas Journal colleague and I saw the engineer, whom we both knew, and invited him to join us for lunch. He did.

When I reached for the check, the engineer insisted on paying for his hamburger and coffee. Rules, he explained.

The lesson: Federal rules don't always align with the private sector's standard courtesies.

Oil company employees need to remember that.

The report of Department of the Interior Inspector General Earl E. Devaney is devastating on many fronts (OGJ Online, Sept. 12 and Sept. 18, 2008). One former MMS employee already has pled guilty to a criminal charge. Other employees named in Devaney's report must be having night sweats.

The oil industry, meanwhile, looks complicit in corruption.

"The whole sordid affair shows how much sway Big Oil holds over the government," said Bill Nelson (D-Fla.) while introducing legislation specifying how government officials should behave with the oil and gas business.

In fact, Devaney's report reads differently from Nelson's interpretation. It details many instances in which four companies—Chevron, Shell, Hess, and Gary Williams Energy Co.—treated officials of the MMS Royalty-in-Kind (RIK) Program as they would private business associates.

The IG report says company representatives bought the RIK officials occasional meals and drinks and included them in appreciation dinners and golf, ski, and paintball outings.

As business behavior, none of that sounds illicit. But the RIK officials don't work for business.

The government says federal employees shouldn't accept gifts worth more than $20 apiece or totaling $50 in any given year.

Apparently, the company and RIK officials targeted in Devaney's report thought those rules didn't apply or chose to ignore them.

And the oil industry has a political problem likely to cost much more than the few thousand dollars four companies spent showing MMS marketers that they appreciated their business.

This feature will appear next on Oct. 3.

(Online Sept. 19, 2008; author's e-mail:

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