DOI probe finds bad behavior in MMS RIK office

Employees in the US Minerals Management Service's royalty-in-kind office in Denver were paid for outside work, abused drugs and alcohol, and solicited sex, an investigation by the Department of the Interior solicitor general's office found.

Sep 12th, 2008

Nick Snow
Washington Editor

WASHINGTON, DC, Sept. 12 -- Employees in the US Minerals Management Service's royalty-in-kind office in Denver were paid for outside work, abused drugs and alcohol, and solicited sex, an investigation by the Department of the Interior solicitor general's office found.

"The single most serious problem our investigations revealed is a pervasive culture of exclusivity, exempt from the rules that govern all other employees of the federal government," Interior IG Earl E. Devaney said in a Sept. 9 memorandum to DOI Secretary Dirk A. Kempthorne.

Kempthorne took steps to replace key leadership and staff in the affected components of MMS while awaiting Devaney's final reports, and he promises swift action now that he has those reports and has information to proceed further.

On Sept. 11 Oversight and Investigations Committee Chairman Henry A. Waxman (D-Calif.) said the committee would hold a hearing Sept. 17 to examine Devaney's reports.

The committee's ranking minority member, Thomas M. Davis III (R-Va.), and the ranking minority member of its Domestic Policy Subcommittee, Darrell E. Issa (R-Calif.), said on Sept. 10 that Waxman had not made good on his February 2007 promise to continue investigations of MMS operations that began when the Republicans were in charge.

In his letter to Kempthorne, Devaney said that he previously had gone on record as saying that 99.9% of DOI's employees "are hard-working, ethical, and well-intentioned. Unfortunately, from the cases highlighted here, the conduct of a few has cast a shadow on an entire bureau.

"Our investigation revealed a relatively small group of individuals wholly lacking in acceptance or adherence to government ethical standards; management that through passive neglect, at best, or purposeful ignorance, at worse, was blind to easily discernible misconduct; and a program that had aggressive goals and admirable ideals, but was launched without the necessary internal controls to ensure conformity with one of its most important principles: 'Maintain the highest ethical and professional standards.' This must be corrected," he continued.

The OIG investigation reports described instances where RIK employees helped representatives from producers prepare bids, held outside paying jobs while still on MMS's payroll, and promoted private enterprises within the office.

Prodigious frequency
During 2002-06, nearly one third of the entire RIK staff "socialized with and received a wide array of gifts and gratuities from oil and gas companies with whom RIK was conducting official business," Delaney said in the letter. "While the dollar amount of gifts and gratuities was not enormous, these employees accepted gifts and gratuities with prodigious frequency."

He suggested that this began when the program decided to adopt a "business model" approach under which RIK marketers began to act more as if they were part of the private sector. "This included effectively opting out of the Ethics in Government Act, both in practice and, at one point, even explored doing so by policy or regulation," he said.

In particular, two RIK marketers received gifts and gratuities from four oil and gas producers with whom they did business on at least 135 occasions, Devaney said.

He said that IG investigators also found "a culture of substance abuse and promiscuity in the RIK program," both within it (including the case of a supervisor who used illegal drugs and sought sex from subordinates) and in contacts with the oil and gas industry (including two RIK marketers who had brief sexual relationships with company representatives).

Devaney said that some individuals' conduct might warrant their removal and possibly their being banned from the RIK program. He also recommended that DOI and MMS develop an enhanced ethics program specifically designed for the RIK program and a clear, strict code of conduct for it. Finally, he said that MMS should consider moving RIK oversight from DOI headquarters in Washington to Denver as it tries to rebuild the program.

Contact Nick Snow at nicks@pennwell.com.

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