Obama appoints Bromwich to oversee MMS reorganization, reforms

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 16 -- US President Barack Obama announced that he has chosen a former Department of Justice inspector general to lead reforms at the US Minerals Management Service as part of his administration’s effort to reform federal oversight of offshore oil and gas activity.

He said that Michael R. Bromwich, who currently leads the internal investigations, compliance, and monitoring practice at the Fried Frank law firm in Washington and New York, will oversee MMS’s reorganization to eliminate conflicts among the agency’s different missions and ensure there is no conflict of interest, real or perceived, in its oil and gas industry oversight.

“For a decade or more, the cozy relationship between the oil companies and the federal agency overseeing them was allowed to go unchecked,” the president said on June 15 as he announced the appointment hours before delivering his first televised address from the Oval Office. “That allowed drilling permits to be issued in exchange not for safety plans, but assurances of safety from oil companies. That cannot and will not happen any more.”

In a separate announcement, US Interior Sec. Ken Salazar said, “…Bromwich has vast experience improving the way organizations work, both within the government and in the private sector. He is an ideal choice to change how the agency does business, to lead the reforms that will raise the bar for offshore oil and gas operations, and to help our nation transition to a clean energy future.”

Bromwich was DOJ’s inspector general from 1994 to 1999 and oversaw numerous high-profile investigations, including misconduct in the Federal Bureau of Investigation laboratory and the FBI’s involvement in the Aldrich Ames espionage case. In 2002, DOJ and the District of Columbia selected him to be an independent monitor for the District’s Metropolitan Police Department, focusing on use of force, civil rights integrity, internal misconduct, and training issues, where he served until 2008. The City of Houston chose him in 2007 to direct a comprehensive investigation of its police department crime laboratory, where serious problems in its operation were found.

Bromwich’s mission
Obama said that Bromwich’s primary task at MMS will be to restore integrity and rigor to the relationship between federal regulatory officials and oil companies. He will be asked to develop plans for a new oversight structure, replacing long-standing, inadequate practices with a gold-standard approach for environmental and safety regulation, the president indicated. Bromwich has a mandate to implement far-reaching change and will have the resources to accomplish that change, he added.

In his 20-min address about the Gulf of Mexico spill and efforts to ensure that a similar environmental and economic climate doesn’t happen again, Obama said MMS had become an emblem over the last 10 years of a failed philosophy that views all regulations with hostility, and which said that corporations should play by their own rules and police themselves. “At this agency, industry insiders were put in charge of industry oversight,” he said. “Oil companies showered regulators with gifts and favors, and were essentially allowed to conduct their own safety inspections and write their own regulations.”

He noted that when Salazar first became secretary, one of his first efforts was to clean up the worst parts of MMS’s corruption. It has since become apparent that the pace of reform there has been too slow, that MMS needed to be reformed and reorganized, and that a tough regulator such as Bromwich would be need “to build an organization that acts as the oil industry’s watchdog, not its partner,” Obama said.

“So one of the lessons we've learned from this spill is that we need better regulations, better safety standards, and better enforcement when it comes to offshore drilling,” he continued. “But a larger lesson is that no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk.” He called for an accelerated national transition to clean fuels, starting with passage of comprehensive climate and energy legislation. “Now is the moment for this generation to embark on a national mission to unleash America's innovation and seize control of our own destiny,” he maintained.

Obama also said he would meet on June 16 with BP PLC Chairman Carl-Henric Svanberg and demand that he set aside whatever resources are necessary to compensate workers and business owners who have been harmed as a result of what the president said was the multinational oil company’s recklessness. “This fund will not be controlled by BP,” he added. “In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent, third party.”

Initial responses
Immediate congressional reaction to his address was mixed. US Sen. Mary L. Landrieu (D-La.) said that she agreed with Obama that the claims process to compensate victims of the spill needs to work more efficiently and that BP, as the well’s owner and operator, needs to be held fully accountable.

“I firmly believe that BP should establish an escrow account to compensate all individuals, businesses and communities in the Gulf Coast who have suffered damages because of this spill,” she said. “But it must be done in a way that ensures BP remains viable enough to pay every penny of what they owe to those who have been affected by this horrific spill and tragedy.”

US Sen. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member, noted, “Tonight the president called for many things we can all agree on: the need to stop the oil, the need for a full cleanup, prompt and full compensation for victims of the oil spill, and measures to minimize the risk of an incident like this ever happening again.”

Murkowski added, “What I wanted to hear, though, and the people of the gulf expected to hear, was specifics about how we are going to do those things. Instead the president undermined our common goals by echoing those in Congress who want to use this incident to pass ‘comprehensive energy and climate legislation,’ the new code for cap-and-trade.”

US House Minority Leader John A. Boehner (Ohio), meanwhile, said, “President Obama should not use this crisis as an excuse to impose a job-killing national energy tax on struggling families and small businesses. Americans want the president focused on stopping the leak and finding out what went wrong, not on twisting lawmakers’ arms on Capitol Hill to pass more costly, job-killing legislation.”

Contact Nick Snow at nicks@pennwell.com.

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