Min Mgmt MMS BOEMre

see bak

one of the few cases of straight up corruption at fed level pre trump? --? BP oil spill?

Bernhardt was DOI lawyer in charge (vs IG?)

In another example, according to “a report by the Interior Department’s inspector general,” employees in theDepartment of the Interior’s Minerals Management Service (MMS) “‘frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relations with oil and gas company representatives,'”while allowing oil companies to “avoid paying royalties for offshore-drilling rights,” at a cost to taxpayers of “as much as $10.5 billion over about 25 years.”

From 2002 to 2006, according to “a report by the Interior Department’s inspector general,” MMS employees “‘frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relations with oil and gas company representatives.'”Inspector GeneralEarl Devaney said MMS made “mistakes” allowing oil companies to “avoid paying royalties for offshore-drilling rights,” which would “cost taxpayers as much as $10.5 billion over about 25 years.”

Stephen Power, “[Federal Oil Officials Accused In Sex and Drugs Scandal,” Wall Street Journal, 09/11/08]

3/19

Trump administration is moving to permit a handful of private companies to start using seismic surveys in the Atlantic. This destructive tool in the oil exploration industry can cause marine creatures — including dolphins, whales, fish and zooplankton — catastrophic harm, including death.

"I will tell you we wouldn't work really really hard to get the [Atlantic] seismic permits out, if it was an area that wasn't going to be available," saidJoe Balash, who oversees the the Bureau of Ocean Energy Management, the agency responsible for permitting the Atlantic seismic permits and crafting the five-year drilling plan. When Balash says that area is going to be "available," he means they intend to make the Atlantic coast available to oil companies to drill.

The League of Conservation Voters has led efforts to halt drilling in the Arctic and Atlantic and other areas where drilling has been off-limits. We've organized and put pressure on members of Congress and we're currently suing the Trump administration to block its Arctic drilling plans.We can stop the Trump administration again, but we need your help.

The League of Conservation Voters is fighting on many fronts — climate action, clean water, healthier air. Your support is needed more than ever. Please donate to LCV right now — even $5 can help. Every gift will be triple matched »

There's more to this fight — the Senate also just announced that oil lobbyist David Bernhardt's confirmation hearing to be Interior Secretary has been scheduled for next Thursday. Believe me — if confirmed, Bernhardt, who currently oversees the Interior Department as the Acting Secretary, will ram through Trump's plan for drilling in the Atlantic and in other oceans off our beaches.

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politco

By Talia Buford10/11/2011

It was a rebranding of the largest order.

In the wake of a sex, drugs and oil-permitting scandal, the BP spill and long-standing controversies over revenue collection, the Interior Department had to do some major shop cleaning in how it managed offshore drilling.

The Minerals Management Service — the nearly 2,000-employee agency charged with the missions of permitting, inspecting and collecting royalties from oil and gas exploration on federal lands — was too close to the industry it was charged with regulating.

“For a decade or more, the cozy relationship between the oil companies and the federal agency was allowed to go unchecked,” President Barack Obama said last year. “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 anymore.”

MMS begat the Bureau of Ocean Energy Management, Regulation and Enforcement — a transitional agency meant to bridge the gap, and separate the conflicts of interest — while Interior undertook a more intensive restructuring. BOEMRE handled regulation and enforcement of oil and gas permits, while a new organization — the Office of Natural Resources Revenue — was created solely to handle the money collected from oil and natural gas leases.

This month, Interior completed the nearly 18-month reorganization when it officially established the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement as successor agencies to MMS. BSEE will oversee permitting, inspections, enforcement and safety of offshore oil and gas operations, while BOEM will handle energy leasing and planning in federal waters. BOEMRE’s chief, Michael Bromwich, will stay on as head of BSEE until a permanent director is found. (See a graphic about the reorganization here.)

Some environmentalists and industry officials are leery that the reorganization will fall flat and either be plagued with the same problems as MMS or choke industry development with red tape and bureaucracy.

“We’re concerned that there hasn’t been enough independence established for the regulatory and enforcement agency,” said Regan Nelson, senior oceans advocate for the Natural Resources Defense Council. “We’ve been saying all along, we feel like to ensure independence, there needs to be a separate line of reporting up through the chain of command. Right now, the way that the leasing agency and the regulators simply report to the same person within the agency doesn’t do enough to ensure the independence of the process.”

Currently, BSEE and BOEM both report to the assistant secretary of land minerals management, which, Nelson said, could make it hard for the inspectors to exercise their autonomy.

Industry officials are anxious about what the changes will mean and whether there will be a logjam in the permitting process, said Andy Radford, senior policy adviser for offshore drilling at the American Petroleum Institute, an industry group.

“We’re a bit anxious in terms of getting the work done in the Gulf and getting permits approved and plans approved to make sure the process is efficient and the agencies have the resources needed to get things done,” Radford said.

Interior has already hired 120 new people to fill slots in BSEE and BOEM, and Bromwich expects that budget requests for BSEE will call for an additional 200 people to fill inspector and engineering positions.

“They’ve worked hard on this, and they deserve the opportunity to make it work before we come out too hard without any evidence that it’s not working,” Radford said. “Let’s give it a chance.”

ONRR was established to handle the revenue collection duties of MMS, essentially taking in the money when oil and gas companies secure a lease to drill on federally owned land or offshore, as well as the royalties for the resources extracted. ONRR managed payments from oil and gas companies at a rate of about $1 billion per month, and it disbursed more than $9.1 billion during fiscal year 2010, according to the agency’s website.

Once processed, a portion of the money goes to the state in which drilling occurred with the remainder going to finance federal water reclamation projects in the Western United States and to the Treasury. The agency returns all of the money collected from leases on Native American lands to the tribes and landowners.

BOEM, led by former BOEMRE senior adviser Tommy P. Beaudreau, is responsible for managing offshore leases, environmental evaluation, review and administration of oil and gas exploration and development plans, and development of renewable energy projects. The office will also conduct environmental studies and analysis under the National Environmental Policy Act.

BSEE is tasked with ensuring offshore gas and oil development is done safely, from both the environmental and staffing aspects. BSEE will conduct inspections and permit gas exploration sites, and it is responsible for formulating and enforcing safety and environmental regulations. Oil spill response, training and environmental compliance programs also fall under BSEE’s purview.

Albert Modiano, president of the U.S. Oil and Gas Association and a former deputy at MMS, said the reorganization makes good moves toward eliminating conflicts of interest.

“In the end, the most important measure of a reorganization’s success is if it works as intended — and as the industry relies so much on the actions of the [Interior] Department for access, leasing and permit review, it is critical that a new bureaucracy make things better, not worse,” he said.

It’s hard to imagine that anything can be worse than MMS. For years, as documented in a series of inspector general reports, the agency had a tawdry relationship with the oil industry it was tasked with regulating.

One report found that 19 employees in the royalty-in-kind program routinely accepted gifts from and socialized with companies it was tasked with regulating. The IG detailed incidents of employees having sex and getting drunk with industry officials, accepting hunting trips and sporting event tickets from companies, viewing pornography at work and coming to work under the influence of drugs.

The IG also found that at least one inspector was negotiating a position at an oil company while he was responsible for inspecting its offshore platforms.

The fraternizing and potential missteps were only magnified in the wake of the BP oil spill. MMS shortcomings were too big to be ignored.

First, the royalty-in-kind program was abolished, with the existing leases phased out within months of the spill. MMS got a new name and a new director, Bromwich, a former Clinton administration inspector with a reputation for rooting out misconduct in organizations.

During its short life, BOEMRE formed an investigative team to root out malfeasance within the agency, while Bromwich became a fixture on Capitol Hill fielding questions during hearings on the BP oil spill.

Simultaneously, BOEMRE launched what it characterized as “the most aggressive and comprehensive reforms to offshore oil and gas regulation and oversight in U.S. history.” The reforms implemented stronger controls for well design, casing and cementing, inspection and certification and introduced workplace safety and environmental-safeguard programs for offshore operators.

New rules require inspectors to recuse themselves from inspecting the facilities of former employers, and the reporting of industry attempts to unduly influence inspectors. Browmich told the House Natural Resources Committee in July that the new reforms were already bearing fruit: An internal review showed more than 50 instances in which inspectors in the Gulf of Mexico recused themselves in compliance with the new policy between September 2010 and April 2011.

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https://www.alternet.org/news-amp-politics/trump-plans-unleash-fossil-fuel-industry-conduct-violent-destructive-assaults

Defenders of ocean habitats and marine life are up in arms on Friday as the Trump administration is set to approve new abilities for the fossil fuel industry to conduct widescale and "deafening" underwater seismic in federal waters off the U.S. Atlantic coast.

The decision is expected to come from the National Marine Fisheries Service, a division of the Commerce Department, but conservation groups say it is a smack in the face to ocean ecosystems and a political nonstarter they vow to fight tooth and nail.

"This action flies in the face of massive opposition to offshore drilling and exploration from over 90 percent of coastal municipalities in the proposed blast zone," said Diane Hoskins, campaign director at Oceana. "These permits were already denied because of the known harm that seismic airgun blasting causes. President Trump is essentially giving these companies permission to harass, harm and possibly even kill marine life, including the critically endangered North Atlantic right whale – all in the pursuit of dirty and dangerous offshore oil. This is the first step toward offshore drilling in the Atlantic and we're going to make sure coastal communities know what's happening and fight this."

Michael Jasny, director of the Marine Mammal Protection Project at NRDC, said the president's action is totally detached from the reality of the threats the world's ecosytems now face.

"Just one week after issuing dire warnings on the catastrophic fallout of climate change to come, the Trump Administration is opening our coastlines to for-profit companies to prospect for oil and gas—and is willing to sacrifice marine life, our coastal communities and fisheries in the process," fumed Jasny. "This is the first step towards drilling and scientists warn that seismic activity alone could drive the endangered North American right whale to extinction. We'll stand with citizens, coastal businesses, scientists, lawmakers, and commercial and recreational fishermen who oppose seismic blasting, and we will fight this illegal action."

According to theWashington Post:

In addition to harming sea life, acoustic tests — in which boats tugging rods pressurized for sound emit jet engine-like booms 10 to 12 seconds apart for days and sometimes months — can disrupt thriving commercial fisheries. Governors, state lawmakers and attorneys general along the Atlantic coast say drilling threatens beach tourism that has flourished on the coast in the absence of oil production.

Seismic testing maps the ocean floor and estimates the whereabouts of oil and gas, but only exploratory drilling can confirm their presence. The Deepwater Horizon oil spill that soiled the Gulf of Mexico resulted from an exploratory drill. Another gulf disaster that looms almost as large has spewed oil for more than 14 years. The Taylor Energy Co. spill of up to an estimated 700 barrels a day started when a hurricane ripped up production wells, and could continue for the rest of the century, according to the Interior Department.

"Seismic blasting is a violent, destructive precursor to unnecessary offshore oil drilling," said Angela Howe, Surfrider Foundation Legal Director, in a statement. "According to estimates from theBureau of Ocean Energy Management (BOEM), the seismic exploration projects could directly harm tens of thousands of whales and dolphins, in addition to thousands of manatees, seals, and sea turtles. This type of damage to our coastal resources is unacceptable. The Surfrider Foundation and our strong coalition of allies will stand up to protect our ocean, waves and beaches for the future."

While the seismic blasting is awful enough, Earthjustice warns that this is only a part of the Trump adminstration's assault on the oceans and marine life. As the group notes:

While destructive in their own right, the seismic tests are only a first step in the Trump administration’s broader plans for dramatic expansion of offshore drilling in the Atlantic and beyond. The Department of the Interior has proposed opening 90 percent of U.S. federal offshore waters to the fossil fuel industry, exposing nearly every coastline in the nation to the risk of an environmentally devastating oil spill and the degradation that comes with industrializing more of our rich ocean environments.Since the planning process for this offshore leasing expansion got underway, more than 1.45 million Americans have demonstrated intense opposition with rallies, marches and comments submitted to the Department of Interior agency responsible for crafting the plan.

"As usual, the Trump administration is pulling out all the stops to give favors to the fossil fuel industry, whatever the cost to coastal communities and wildlife," said Athan Manuel, the lands protection program director for the Sierra Club. "We will continue to fight back against their dangerous plans to subject our coasts to seismic blasting and expanded offshore drilling."

On July 18, 2011, Dr. Monnett was suspended and put on administrative leave by BOEMRE, pending results of an investigation into "integrity issues" by the DOI Office of Inspector General.^[11][12] During his paid leave, he was forbidden from speaking to colleagues or entering any Interior offices.

BOEMRE director Michael Bromwich stated that Monnett's dismissal was not politically motivated, and did not involve questions about his scientific integrity.^[13] However, there was comment from climate "sceptics" that did raise questions about the integrity of scientists. British Conservative columnist Ann Widdecombe used the case to justify her view that "climate change money should go to armed services".^[14]

The Bureau of Ocean Energy Management (BOEM) is an agency within the United States Department of the Interior, established in 2010 by Secretarial Order.^[1]

The Outer Continental Shelf Lands Act (OCSLA) states: "...the outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintainence *[sic*] of competition and other national needs."[attribution ^needed]^

BOEM and its sister agency, the Bureau of Safety and Environmental Enforcement are the agencies to which this responsibility is delegated. They exercise the oil, gas, and renewable energy-related management functions formerly under the purview of the Minerals Management Service (MMS). Specifically, BOEM activities involve resource evaluation, planning, and leasing.^[1]

[hide]

Directors

The agency's first director, serving from June 2010 to May 2014, was Tommy Beaudreau.^[2] The second director was Abigail Ross Hopper.^[3] Currently, the deputy director Walter Cruickshank serves as the acting director.^[4]

https://insideclimatenews.org/news/13072017/arctic-offshore-drilling-trump-approved-eni-boem-alaska

Making good on its promise to jump-start Arctic offshore drilling, the Trump administration gave Italian oil company Eni a quick green light on Wednesday to drill exploratory wells off the coast of Alaska.

This is the first Arctic drilling approval under President Donald Trump. It also will be the first exploration project conducted in the U.S. Arctic since Shell's failed attempt in the Chukchi Sea in 2015.

The approval comes as the administration attempts to overturn former President Barack Obama's ban of new drilling in federal Arctic waters. Eni's leases were exempt from Obama's ban because the leases are not new.

Environmental groups are calling the approval a sign that Trump is doing the bidding of the oil industry. The public had 21 days to review and comment on the exploration plan and 10 days to comment on the environmental impacts, which Kristen Monsell, an attorney with the Center for Biological Diversity, said was insufficient given the potential risks.

"An oil spill here would do incredible damage, and it'd be impossible to clean up," Monsell said. "The Trump administration clearly cares only about appeasing oil companies, no matter its legal obligations or the threats to polar bears or our planet."

Eni plans to drill four exploratory wells in December 2017, just before the leases expire at the end of the year.

The wells will be drilled from Spy Island, an existing gravel island in state waters, located three miles off the coast of Alaska. The wells would be the longest extended-reach wells in Alaska—stretching six miles horizontally into an area of shallow federal waters about six feet deep.

"We know there are vast oil and gas resources under the Beaufort Sea, and we look forward to working with Eni in their efforts to tap into this energy potential," said the Management's acting director, Walter Cruickshank, in a statement.

Monsell noted that Eni had not pursued exploratory drilling there until its leases were about to expire.

"Approving this Arctic drilling plan at the 11th hour makes a dangerous project even riskier," she said.

In June, the Center and 12 other environmental organizations, including Earthjustice, Greenpeace, WWF and the Sierra Club, sent comments to BOEM about Eni's proposed plan. In their comments, the groups said that Eni's plan failed to adequately assess the extent of environmental harm the project could pose, the likelihood of an oil spill, or how Eni would respond to a large oil spill.

"Eni simply has failed to submit a complete, adequate Exploration Plan and environmental impact analysis, and, accordingly BOEM should rescind its completeness determination and reject Eni's Exploration Plan," the groups wrote.

BOEM disagreed, finding that the project would have "no significant impact."

"Eni brought to us a solid, well-considered plan," Cruickshank said.

Eni has said it will only drill in the winter when a potential oil spill would be easier to clean up and when whales are not migrating in the area.

Before Eni can drill, it will have to secure additional permits from the state Department of Environmental Conservation and the federal Bureau of Safety and Environmental Enforcement.

PUBLISHED UNDER:

ARCTIC

OIL SPILLS/PIPELINES

DONALD TRUMP

http://www.cnn.com/2010/POLITICS/05/27/mms.salazar/

The Minerals Management Service, a division within the Interior Department, was a troubled agency long before the oil spill in the Gulf of Mexico and the recent revelations of employee misconduct.

The agency --which oversees U.S. offshore drilling, including the Gulf of Mexico -- has come under fire for mismanagement, questionable conduct and cozy relationships with industry officials.

The MMS issued permits for the Deepwater Horizon drill rig -- contracted by BP -- which exploded on April 20. The explosion killed 11 people and resulted in an oil spill that is threatening parts of the Gulf.

Interior Department Secretary Ken Salazar, during an appearance Wednesday before the House Committee on Natural Resources, said he was trying to change the agency's culture and its structure, which some critics say leads to mismanagement.

"My belief is that most of the employees of the MMS are good public servants," Salazar said. He, however, acknowledged some of the past conduct was "scandalous" and "reprehensible."

Salazar said some people have been fired and others referred for prosecution.Two sources told CNN on Thursday thatMMS Director Elizabeth Birnbaum has been fired.

At a House subcommittee hearing Thursday, Salazar insisted Birnbaum had resigned "on her own terms and own volition." President Obama later said he didn't know whether Birnbaum was fired or resigned on her own.

The Obama administration has said in recent weeks that many of the problems within the MMS were inherited from the Bush administration. Salazar, during his testimony and in his answers to members of Congress on Wednesday, also made that point.

During the hearing, Rep. Doug Lamborn, R-Colorado, asked Salazar why he and other officials were "harping on what MMS did or didn't do in the previous administration."

"Why aren't we talking about the here and now?" Lamborn asked.

Salazar was blunt in his response. "We've done a lot to clean the house at MMS, unlike the previous administration," he said. "This is not the candy store of the oil and gas kingdom which you and others were a part of."

Conflict of interest?

The MMS, which has about 1,700 employees, has two responsibilities when it comes to industries such as oil or natural gas. It must act as a regulator while also collecting royalties from the companies.

Some critics say those are opposite pulls and make the agency ripe for mismanagement.

The U.S. government technically owns resources such as the oil in the Gulf. Companies pay the federal government for the rights to drill in certain areas. The MMS collects and distributes about $13 billion a year, Salazar said.

William Galston of the Brookings Institution said there is a built-in conflict of interest, resulting in lax regulation of involved companies.

"The MMS has a lot of incentive to collect as much, in the way of royalty income, as it can. That means pressure to authorize a lot of drilling and then to do everything possible [to make sure] that the flow of production is robust and unimpeded," said Galston, who recently wrote a piece critical of the MMS for The New Republic magazine.

"MMS, as it is currently structured, has to simultaneously put one foot down hard on the gas pedal and the other on the brake," he said. "And the imperatives to go fast are a lot stronger than to slow down."

Salazar said organizational change within the MMS and a restructuring of the agency was necessary to deal with such conflicts.

Salazar advocated plans to "remove revenue collectors away from the leasing and policing functions of the MMS."

He then wants to create two bureaus within the MMS. One would be responsible for creating energy resources -- including oil and gas -- in the outer continental shelf. It would issue leases and collect royalties.

The other would act as the policing arm of the agency, carrying out inspections and enforcing regulations.

'Misconduct, management and spills'

"MMS used to stand for Minerals Management Service. It now stands for misconduct, management and spills," said Rep. Edward Markey, D-Massachusetts, during the House hearing Wednesday.

A report released this week from the inspector general's office at the Interior Department revealed federal inspectors overseeing oil drilling in the Gulf of Mexico accepted meals and tickets to sporting events from companies they monitored.

The report said all the events detailed in it occurred before 2007.

In one case, an inspector in the MMS office in Lake Charles, Louisiana, conducted inspections of four offshore platforms while negotiating a job with the company, the report said.

Others let oil and gas company workers fill out their inspection forms in pencil, with the inspectors writing over those entries in ink before turning them in.

The report also alleged employees at the same office received tickets to 2005 Chick-fil-A Peach Bowl football game from an offshore production company. The report also includes a confidential source informing investigators that a MMS inspector abused drugs, including crystal meth.

In 2008, during the waning months of the Bush administration, Earl Devaney, then the Interior Department's inspector general, issued a report condemning the behavior of some of the agency's employees.

"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," the report said.

The report said, between 2002 and 2006, some of the staff received gifts from oil and gas companies with whom they were conducting business.

Some of the more salacious charges in the report included substance abuse and sexual relationships with industry contacts.

'The revolving door'

Meanwhile, Sen. Bill Nelson, D-Florida, focused on the "revolving door" between industry and government.

The "revolving door" refers to people who work in areas such as the oil industry, move to a government agency such as the MMS and then return to the private sector.

Nelson proposed legislation that would have federal oil industry regulators wait at least two years after leaving government service before going to work for companies they helped regulate.

Among other things, the bill would bar regulators from accepting gifts from oil companies. It also would require regulators to divest themselves of any stock they may currently hold in oil companies, and prohibit them from part-time employment in the industry.

It is time, Nelson said Wednesday on the Senate floor, to "stop this cozy, incestuous relationship between the oil industry and the regulators."

Reactions are growing after a recent joint :{study:(style="box-sizing:border-box;margin:0px;padding:0px"):}: by the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement.

It found hydraulic fracking off the coast of California poses no “significant” environmental impact. The decision lifts a moratorium triggered earlier this year by a lawsuit from the Center for Biological Diversity. The group said it is considering other legal options to challenge the decision.

The Center for Biological Diversity said in a statement:

Offshore fracking was halted in January after a Center lawsuit challenged the federal government’s rubber-stamping of fracking permits without any analysis of threats to wildlife and ocean ecosystems. The case resulted in a settlement agreement that required the Obama administration to stop authorizing offshore fracking and acidizing until federal officials completed a review of the environmental impacts of the practices.

But today’s finding that offshore fracking has no significant environmental impact glosses over the serious hazards of fracking and fails to answer key questions about the risks of this controversial oil-extraction technique.

http://ecowatch.com/2016/06/02/offshore-fracking-pacific/

BOEM, according to those who interact with it, is a more responsible operation than its predecessor, the Minerals Management Service, where former staff scientists say their work was suppressed and where, in 2010, Alaska employees enjoyed a cake decorated with the words “Drill, Baby, Drill.” Environmental protection is, in fact, written into the agency’s mandate. Still, “science-based” energy management — leasing fossil fuel reserves and approving drilling plans — are at that mandate’s core.

“Even though some of the names shifted around, a lot of the culture of the agency remains the same,”

http://grist.org/climate-energy/the-inside-story-of-shells-push-to-drill-in-the-arctic/

yeoman

Last May, four months before the oil giant Royal Dutch Shell suspended exploration in offshore Alaska, Christopher Putnam needed to get something off his chest.

Putnam is 44, originally from Texas, a trained wildlife biologist who also served as an Army infantry sergeant during the Iraq War. For almost six years, he has worked in Alaska for the U.S.Fish and WildlifeService,protecting marine mammals. It has been his job to ensure that Shell’s plans to drill more than 60 miles offshore in the Chukchi Sea — the wild Arctic water between Alaska and Siberia — wouldn’t harmPacific walruses,particularly the juveniles, calves, and nursing mothers that dominate the Chukchi during the drilling season.

Putnam’s relationship with Shell had always been amicable — until the company began insisting that walrus protection should take a backseat to economics and efficiency, and making it clear that it would fight any regulatory speed bumps placed in its way. That kind of determination madeShell a regular caller at the White House: Company president Marvin Odum was a guest there at least six times in the administration’s first two and a half years, and lobbyist Sara Glenn visited even more frequently,according to a 2012 *New York Times*article. In light of his “all of the above” strategy to foster energy independence, President Obama obliged by creating a task force to help clear Shell’s path through the bureaucracy, the Timesreported.

Odum met in 2014 with then-presidential counselor John Podestato discuss Chukchi drilling, though the exact details are unknown. The following year, Putnam began noticing leaders within the USFWS’s parent agency, the Department of the Interior, discussing in conference calls how to accommodate Shell’s demands. “Some people were working on various options — how we could interpret our regulations in such a way that were favorable that would allow Shell to do what they wanted to do,” he says. “When there’s discussion about changing the meaning of the regulations specifically to accommodate a company like Shell, then that started to become concerning for me.” By law, rule-making is a public process. “These discussions that were taking place behind the scenes, with no input or public accountability, were getting to the point that I simply wanted to put on the record that I had concerns.”

In a May 26 email, Putnam unloaded. “Shell has clearly stated that they think minimizing disturbance to walruses is irrelevant,” he wrote to his then-boss, Mary Colligan, who is now the USFWS’s Alaska assistant regional director.“Shell insists it is not they who must comply with federal regulations, but we who should change the regulations to accommodate Shell.”

Putnam then addressed the “voices” within theInterior Departmentthat he says wanted to reinterpret the rules without involving the public. “I think it would be disingenuous, mendacious, and unethical,” he wrote. “Such a course of action may even be illegal.” If Shell were successful at skirting walrus-protection measures, what would come next? Would oil companies quietly try to lift industrial noise limits in the Arctic? Or weaken measures protecting denning polar bears? “Where,” he wrote, “would it end?”

After Shell received its approvals and started drilling in July, its first well came up dry, leading the company to withdraw from offshore Alaska “for the foreseeable future.” In its September pullout announcement, Shell laid some of the blame on the “challenging and unpredictable federal regulatory environment.”

But an Audubon investigation based on government documents — some filed in court and others obtained by Earthjustice, a nonprofit environmental law organization, through the Freedom of Information Act — points to a regulatory system that, while tougher than before the 2010 Deepwater Horizon explosion and BP oil spill in the Gulf of Mexico, still cut corners and stretched its own capacity in order to accommodate Shell’s drilling timeline. While USFWS scientists fought to protect marine mammals, they did so under crushing time constraints and at the expense of other conservation efforts. Meanwhile, at the Interior agency tasked with approving Shell’s oil leases and exploration plan, the Bureau of Ocean Energy Management (BOEM), decision makers authorized overtime, weekend, and holiday work to deliver Shell a speedy decision, while failing to keep pace with climate and ecosystem science.

These findings mirror, in part, a new investigative report, released Dec. 7 by Interior’s Inspector General’s office. It detailed how some BOEM employees considered the agency’s timeline so aggressive that, in the words of one professional, a keyenvironmental analysis was “absolutely compromised” and “full of errors.”

These efforts to accommodate a multinational energy company happened under the watch of President Barack Obama, who is reviled, ironically, by drilling advocates and eager to cement his legacy as a climate warrior.

Shell declined several requests for interviews for this article. “This story is not relevant anymore,” wrote spokesperson Curtis Smith.

In fact, though, the story is just as relevant as ever. In October’s third-quarter earnings call, Shell CEO Ben van Beurden emphasized that while the first foray proved unpromising, “there are of course other potential prospects in our Chukchi leasehold, as well as other areas offshore of Alaska.” And after the current leases expire in four years, there could be more to come. A BOEM draft plan calls for new Arctic lease sales starting in 2020. Legislation pending in Congress at press time would requireregular sales starting in 2023, even as new science cautions against Arctic drilling. Things might be quiet off the Alaskan coast right now, but that tranquility could very well prove temporary.

When Shell won the vast majority of the drilling rights in the 2008 Chukchi lease sale — aka Lease Sale 193 — it called its $2.1 billion acquisition a victory for energy independence. “This is an opportunity to develop a proven and prolific basin to supply energy security for North America,” company vice president Annell Bay told reporters.

Conservationists couldn’t imagine a worse place to drill, a place more fertile, more unspoiled, more vulnerable to climate change. Along with walruses, the Chukchi teems with polar bears, ringed seals, and bowhead and beluga whales. “Coming from the Lower 48, you don’t see areas like this, that are untouched by development,” says Leah Donahey, senior campaign director for the Alaska Wilderness League. Donahey recalls flying over the Chukchi in 2011 and watching thousands of belugas swimming below her. Inland she saw bears running on the tundra, and massive herds of caribou. There were no roads, no infrastructure — “just these small communities and then vast ocean.”

Those communities rely on the ocean’s bounty: Subsistence hunting of marine mammals feeds many native Alaskans. “If we don’t have the animals to provide for our nutritional needs, we won’t survive,” says Faith Gemmill, executive director of Resisting Environmental Destruction on Indigenous Lands (REDOIL), a grassroots organization. “It’s not just about food security. We’re talking about our entire way of life.” In Iñupiat villages, during traditional whale hunts, she says, “the stories are taught. The values are taught. Knowledge is passed down from the elders to the younger people.”

Even before Shell bought its leases, REDOIL and the Alaska Wilderness League joined other groups, including the National Audubon Society, in suing the Bush administration to stop the sale. The 2008 lawsuit, filed by Earthjustice, noted that rising temperatures are already stressing polar bears and walruses. (The Arctic is warming twice as fast as the planet as a whole.) The Interior Department, said the plaintiffs, was selling leases without fully gauging the impacts on climate change, the likelihood of a spill, or the damage to wildlife caused by the deafening air guns used during seismic surveys. Nor, they added, did the government adequatelyconsider harm to Steller’s and Spectacled Eiders, both threatened ducks.

It was the first of several hard-fought legal cases over drilling in the Chukchi — cases that continue today, outlasting Shell’s pullout announcement.

As the litigation meandered through the courts, two disasters gave ammunition to critics of Arctic drilling. First, the BP oil spillexposed lethal flaws in the regulatory system. It prompted new safety regulations and President Obama’s dissolution of BOEM’s predecessor, the Minerals Management Service, where staffers infamouslyaccepted gifts from, and indulged in sex and cocaine with, their energy-industry contacts. Second, Shell itself threw the perils of Arctic drilling into focus when it suffered a series of setbacks during its first season of exploration in 2012, culminating in the grounding of the drill ship Kulluk on Sitkalidak Island as it was towed through the Gulf of Alaska during a storm.

In January 2014, the Ninth Circuit issued a key decision in Earthjustice’s lease-sale challenge — and highlighted the government’s efforts to help clear Shell’s path. The judges noted that BOEM based its environmental analysis on the “lowest possible amount of oil that was economical to produce.” By estimating just 1 billion barrels, the agency lowballed the possible impacts on habitat, climate, and bird populations. “BOEM considered only the best case scenario for environmental harm,” the court wrote. The decision led BOEM to revise its studies. For the environmental impact statement (EIS) finalized in February 2015, it chose a new and more reasonable estimate of 4.3 billion barrels — and, based on that, calculated a 75 percent chance of “one or more large spills” during the 77-year Chukchi production cycle.

BOEM maintains that such an accident would probably not be “catastrophic” in scale; its “likely” projected large spill from a production platform, based on the median size of similar spills, is 214,200 gallons, or less than 1/600th the volume of the BP disaster. But experts note that cleaning any discharge in the Chukchi would be a formidable, even impossible, task. Unlike the Gulf Coast, the region lacks basic infrastructure: There are no roads connecting villages or even rooms to house cleanup workers. The nearest Coast Guard station is a thousand miles away. There’s little research about how to keep marine mammals away from a spill — and only enough equipment to clean five oiled polar bears at a time. And, perhaps most alarming, there’s no comprehensive method for ridding icy water of oil; most cleanup studies have focused on temperate climates.

“We’re talking about killing the environment,” says Robert Bea, a professor emeritus of civil and environmental engineering at the University of California-Berkeley, who spent decades working for Shell and other energy companies. “Just think about an ice slushie with oil, with beluga and bowhead whales swimming around. If you do harm, it’s going to be extensive and it’s going to be long-term.”

With delays piling up, Shell was nonetheless resolute about resuming exploratory drilling in 2015. Two months after the Ninth Circuit ruling, in April 2014, company presidentOdum sent a letter to Interior Secretary Sally Jewell, whose department oversees BOEM. He asked her to “devote the resources necessary to removing, expeditiously, any current regulatory obstacles”that might slow down his company’s plans. Odum encouraged Jewell to “obtain any necessary additional resources to complete the work” on Shell’s schedule, which the company outlined in a one-pager called “Getting to Yes 2015 — Must Have Timeline.”

Numerous internal agency emails and memos suggest that BOEM — while not promising Shell a specific outcome — did its Chukchi drilling evaluation at a breakneck pace. “We are keeping to this schedule to allow Shell the opportunity to make a decision about next year’s open water drilling season,” Assistant Interior Secretary Janice Schneider said in August 2014, according to an email by:{BOEM’s Alaska regional director, James Kendall.}:

The agency drew up its own timetables, filled with various notations. “This schedule includes working overtime and weekends and holidays,” said one footnote. Requests for annual leave, training, and even office visitors would face “critical review.” Environmental analyses would receive “compressed review time.” And the hastened process, noted an agency document, might interfere with other major tasks like developing new air-quality regulations.

In August, Kendall sent an after-hours email to BOEM deputy directorWalter Cruickshank.B2] “Yes, its [sic] Saturday night and I’m in the office. … But I’m not alone, others are here as well,” he wrote. Kendall reported on a conversation with Assistant Secretary Schneider, aboard a government airplane, about the plan for completing the environmental impact study on time. “She … expressed her view (repeatedly) to me of just how absolutely difficult this was, almost bordering on impossible … and that it was obvious that there is absolutely NO WIGGLE room.

“Folks are exhausted, blurry eyed, working long hours,” Kendall continued. “There are a number of folks on the floor with me as I type this. Emotions are running high. … Given the fact that folks will now have to run a marathon at a sprinters [sic] pace for some months now, we are working out a strategy for crossing the finish line on time.”

Not everyone crossed the finish line. According to the recent Inspector General’s report, Interior knew of at least six BOEM employees who quit or retired early because of the EIS race. One fish biologist said the process was so “crushed” that she didn’t have time to review her own work for consistency or to peer-review others. She retired early, in October 2014, to preserve her own “personal and scientific integrity.” Another biologist said his collaboration with colleagues was limited to 15 to 45 minutes for a 700-page document. A sociocultural specialist said her section on public health was “gutted.”

The Inspector General concluded that BOEM officials did not alter scientific findings. But the attorneys at Earthjustice, in a brief filed in U.S. District Court in August 2015, nonetheless identified two fundamental flaws in the EIS that was released in 2015 after the Ninth Circuit decision.

First, BOEM decided, because of its fast-tracked schedule, not to place certain sectors of the Chukchi, which scientists had recently identified as ecologically important, off-limits to drilling. Interior had begun its first environmental review a decade ago, when “information about the Chukchi Sea environment, habitat, and marine life was starkly limited,” wrote the lawyers. Since then the research has evolved, particularly about Hanna Shoal, a large, shallow area where the ice persists late into summer. Bowhead whales feed there, and great herds of walruses forage for clams.BOEM itself calls the shoal a “biological oasis,” and last year President Obama protected some of it from future, but not current, lease sales. Yet in its court-ordered update to the EIS, BOEM decided not to consider a new drilling footprint that would exclude Hanna Shoal. The agency said “sufficient protections” exist to safeguard marine mammals. Earthjustice points out in its brief that there’s a big difference between reducing harm and barring drilling from an area altogether.

Second, Earthjustice charged that BOEM all but ignored what advances in climate science have revealed about the impact of drilling. It insisted there was “no reliable methodology” to determine how Lease Sale 193 would affect global energy consumption. The EIS didn’t mention, even in its 69-page bibliography, a January 2015 paper from the journal Natureconcluding that “all Arctic resources” must stay in the ground to keep the planet within 2 degrees C of pre-industrial temperatures. “The impact of a single discrete project’s contribution to climate change cannot be covered in more detail due to scientific uncertainty,” the EIS said, adding that recent papers calling for undiscovered hydrocarbons to remain undeveloped “are noted.”

Contacted for an interview, BOEM referred questions to the Interior Department, which declined the request without offering a reason. In a short emailed statement, BOEM spokesperson Connie Gillette said her agency conducted a “robust and rigorous” environmental review “consistent with a court-ordered timeline.” In fact, the court did not impose a timeline but rather directed BOEM to develop its own. In the Inspector General’s report, Interior officials acknowledged the rush. They said it wasn’t designed to help Shell but rather to shield the department from “blame” if Shell missed out on drilling in 2015.

Former and current Interior staffers say BOEM’s efforts to accommodate Shell are not unusual. “Once you’ve granted a lease, there is internal pressure to propagate the regulatory process,” says Paul Bledsoe, who was an aide to Interior Secretary Bruce Babbitt during the 1990s and more recently advised President Obama’s national commission on the BP oil spill. “There’s certainly pressure from the industry.” Others say the agencies regulating offshore production tend to draw employees sympathetic to drilling — environmentalists rarely study petroleum engineering. Add to that President Obama’s support for Arctic oil, and his desire not to be seen as stifling production, and the scale ends up being tipped.

“Even though some of the names shifted around, a lot of the culture of the agency remains the same,” says attorney Miyoko Sakashita, oceans director at the Center for Biological Diversity, a plaintiff in the Earthjustice case. “The deep reforms that a lot of us were hoping to see after the Deepwater Horizon oil spill were in name but not actually in practice.”

One of Shell’s hardest-fought battles in the Chukchiwas over the rules protecting Alaska’s estimated 129,000 Pacific walruses. According to the USFWS’s Mary Colligan, concentrated industrial activity can cause grave harm to marine mammals, including walruses. “At the extreme, if they avoid an area because the disturbance is so high, and have to feed somewhere else, maybe the prey base isn’t as calorie-rich,” she says. That, in turn, can jeopardize survival or reproduction. Industrial noise can damage hearing and impede vocal communication.

In 2013, the USFWS developed regulations governing exploratory drilling in the Chukchi. One rule mandated a minimum 15-mile separation between active rigs. That buffer would help reduce the risk of hearing loss among walruses and give them safe passage if they needed to escape. Christopher Putnam, the wildlife biologist and Iraq vet — and Colligan’s colleague — helped craft that rule.

Shell fought the 15-mile rule. The Chukchi well sites were tightly clustered within a 300-square-mile prospect, and the company wanted to position its rigs at the two most promising sites — just nine miles apart. It would already be spending the resources for a second rig because, in its exploration plan filed with BOEM, Shell had agreed to have a backup vessel in the vicinity to drill a relief well in the event of a blowout. According to Robert Dillon, a senior adviser to Alaska’s senior senator, Republican Lisa Murkowski, Shell didn’t want that rig sitting idle when it could be drilling for oil.

However, if the activity would affect certain marine mammals, Shell couldn’t drill until the USFWS issued a letter of authorization. Like their colleagues at BOEM, Fish and Wildlife staffers felt compelled to make their decisions in time for the 2015 drilling season. “We understood how important it was for Shell,” says Colligan. “They certainly communicated that to us very clearly.” Colligan calls this a courtesy the USFWS extends to all drillers because of the complex timing of their operations. “They’ve got ships staging here and there,” she says. “They’ve got decisions they have to make. That’s the environment that we were in.”

The company conceded that drilling two wells located within nine miles of each other would flood more of the sea with noise, but pushed to prioritize other considerations. “Various distances may be required between rigs to effectively, efficiently, and economically explore the geological positioning of the oil and gas resources,” said an analysis Shell filed with the USFWS in April 2015. “Spacing of the rigs needs to be determined by these characteristics rather than an attempt to further minimize potential behavioral disturbance of walruses.”

With that the oil company put its foot down. “Shell, as part of their 2015 proposed drilling operations, indicates it is not willing to comply with all required mitigation measures,” said a USFWS document. The company’s absolute stance struck Putnam as odd. “It’s not their decision,” he says. “Not to put too fine a point on it, but we’re the federal government.”

Shell claimed, in an April 2015 letter to Fish and Wildlife, that a nine-mile separation would have “negligible impact” on the animals. USFWS biologists remained unconvinced. They said Shell had undercounted the walrus population and failed to factor in such disturbances as the Sikorsky S-92 helicopters flying by 40 times a week. “The S-92,” Putnam wrote in an email to an Interior Department lawyer, “is one of the loudest helicopters on earth.”

With that much air traffic, Putnam says, a helicopter could startle thousands of animals resting on the ice. “They stampede into water, and you’ve got how many dead or injured walruses.” Chronic stress from loud noise could potentially trigger hormonal changes that threaten population size, he adds.

Dealing with Shell’s insistence became a full-time job for Putnam. “I lost half a year,” he says. “Our entire department was almost exclusively focused on that one company, that one issue, for the entire period of time.”

Putnam says he was supported by his Alaska colleagues in holding firm to the regulations. “We were reaching up the chain to make sure everyone was aware,” he says. “As you go higher and higher up, people become less and less aware of the details and nuances of the issue.” Hence the conference calls where Interior officials were groping for new interpretations of the rules, he says.

He found one call particularly upsetting. An Interior staffer he had never met suggested that the Alaska office was misinterpreting the intent of the mammal-protection rules — rules that Putnam himself had helped author. “It was a little bit offensive,” he says, “for someone who’s never been involved to tell me what I was thinking at the time when I wrote them.”

Shell would not be deterred by the USFWS’s scientists. It enlisted Sen. Murkowski, a drilling advocate, whose staff contacted the Interior Department to press the case. “That’s our job: to be the advocates for Alaska,” says Murkowski spokesperson Dillon.

Then, in May, Allyson Anderson, associate director of Interior’s Bureau of Safety and Environmental Enforcement, emailed her boss about a phone call with an Alaska colleague.“Shell intends to take the wildlife issue all the way up through the White House via murkowski [sic],” she wrote.

Dillon says that, to his knowledge, Murkowski did not take the walrus issue that far. “I believe they [Shell] may have raised it with the White House,” he says — a plausible notion given the company’s past access — adding that that’s how Washington works: “Environmental groups clearly take their case directly to the White House on a regular basis. The right to seek the assistance of one’s government without fear of punishment or reprisals is enshrined in our Constitution.”

What eventually preserved the 15-mile mandate in Shell’s drilling authorization, Colligan says, was “procedural”: There was no system for waiving the rule. Fish and Wildlife did promise to “consider making appropriate changes” to the rule through a public process, though that wouldn’t come in time for the 2015 season.

In the end, notes Putnam, Interior officials narrowly defined “active” rigs as those actually drilling. As a result, Shell was allowed to locate its rigs nine miles apart as long as they didn’t drill simultaneously. The problem, according to Putnam, is that a non-drilling rig is still staffed and “active”: It requires helicopter support, noisy anchoring operations, icebreakers, and generators. In other words, there were still two industrial operations within nine miles of each other.

In a bigger sense, though, the 15-mile rule might have been a deciding factor in Shell’s decision to pull out of offshore Alaska — because the Arctic’s short drilling season ended up limiting the company’s activity to a single well in 2015, and that one was a dud. After seven years of political and legal wrangling, countless raucous grassroots protests, and $7 billion in Arctic investments, Shell’s foray into Lease Sale 193 halted rather suddenly.Drilling supporters like Lisa Murkowski placed the blame for Shell’s pullout partly on the Obama administration’s “destructive pattern of hostility” toward energy production. “We’re seeing decisions out of the Interior that are really destroying our hope to be independent as a state,” Murkowski said at an October meeting of theSenate Energy and Natural Resources Committee, which she chairs.She was displeased with Interior’s cancellation of two upcoming Alaska lease sales because of low industry interest, and with its refusal to extend Shell’s current leases.

The federal government plans oil and gas lease sales in five-year increments. The next plan, set to be finalized this year, will cover 2017–22. The current draft calls for sales in the Beaufort in 2020 and the Chukchi in 2022. Beyond that,Murkowski’s proposed Offshore Production and Energizing National Security Act of 2015 (Senate Bill 2011) would require Interior to sell three Chukchi and three Beaufort leases during every five-year program, starting in fiscal year 2023.

But drilling opponents see Shell’s withdrawal as a chance to take a breath and rethink the country’s approach to the Arctic’s energy reserves. They consider it a window of time available to overhaul the regulatory system further to reflect a post-BP world, and to examine whether the industry’s Arctic drilling ambitions should be scaled back or abandoned altogether. “The United States has been myopic for far too long in making decisions about the Arctic,” says Peter Van Tuyn, an Alaska attorney who has represented environmental and native Alaskan groups in challenging drilling. “Why not take the opportunity for the Obama administration to do a big-picture planning effort in the next year?

“We have a fresh opportunity,” Van Tuyn continues. “For the first time in the Obama administration’s seven years in office, they do not have to make a decision about the future of the Arctic with some existing weight on the development side of the scale.” The $7 billion that Shell invested to drill a single well made for quite a heavy weight. “Now,” Van Tuyn says, “that scale can be leveled.”

Since 1905,Audubon,America’s leading advocate for conservation — and for birds — has used explanatory and advocacy journalism, as well as stunning original photography,

January 23, 2004: Subsidies Announced for Gas Drilling in Gulf of Mexico:

Secretary of the Interior Gale Norton announces that the Interior’sMinerals Management Service (MMS) will provide an estimated $1 billion in subsidies to promote deep drilling for natural gas in the shallow waters of the Gulf of Mexico.

rev door; MMS sept 2008 int dept report charlie savage nyt 9/11/08 "sex, drug use and graft..."

both b2 and bc appt'd insiders to run

WASHINGTON — As Congress prepares to debate expansion of drilling in taxpayer-owned coastal waters, the Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal — including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct.

In three reports delivered to Congress on Wednesday, the department’s inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service, which collects about $10 billion in royalties annually and is one of the government’s largest sources of revenue other than taxes.

“A culture of ethical failure” pervades the agency, Mr. Devaney wrote in a cover memo.

The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch.

The highest-ranking official criticized in the reports is Lucy Q. Denett, the former associate director of minerals revenue management, who retired earlier this year as the inquiry was progressing.

The investigations are the latest installment in a series of scathing inquiries into the program’s management and competence in recent years. While previous reports have focused on problems the agency had in collecting millions of dollars owed to the Treasury, and hinted at personal misconduct, the new reports go far beyond any previous study in revealing serious concerns with the integrity and behavior of the agency’s officials.

In one of the new reports,investigators concluded that Ms. Denett worked with two aides to steer a lucrative consulting contract to one of the aides after he retired, violating competitive procurement rules.

Two other reports focus on “a culture of substance abuse and promiscuity” in the service’s royalty-in-kind program. That part of the agency collects about $4 billion a year in oil and gas rather than cash royalties.

Based in suburban Denver and modeled to operate like a private sector energy company, the decade-old royalty-in-kind program sells oil and gas on the open market. Its employees are subject to government ethics rules, such as restrictions on taking gifts from people and companies with whom they conduct official business.

One of the reports says that the officials viewed themselves as exempt from those limits, indulging themselves in the expense-account-fueled world of oil and gas executives.

The reports provoked immediate outrage in Congress. Senator:{Ron Wyden:(style="background-color:#fff200"):}:, an Oregon Democratwho is chairman of the Public Lands and Forests Subcommittee, accused the Minerals Management Service on the Senate floor Wednesday of “a pattern of abuses and mismanagement” that is costing taxpayers billions.

And Senator Bill Nelson, Democrat of Florida, suggested that Congress should not lift its ban on:{offshore drilling:(style="background-color:#fff200"):}:— a hot-button issue in his state — because of the problems identified.

The report says that eight officials in the royalty program accepted gifts from energy companies whose value exceeded limits set by ethics rules — including golf, ski and paintball outings; meals and drinks; and tickets to a Toby Keith concert, a Houston Texans football game and a Colorado Rockies baseball game.

The investigation also concluded that several of the officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.”

The investigation separately found that theprogram’s manager mixed official and personal business. In sometimes lurid detail, the report also accuses him of having intimate relations with two subordinates, one of whom regularly sold him cocaine.

The culture of the organization “appeared to be devoid of both the ethical standards and internal controls sufficient to protect the integrity of this vital revenue-producing program,” one report said.

The director of the Minerals Management Service, Randall Luthi, said in a conference call with reporters that the officials implicated in the reports had violated the public’s trust.

“When you come to work for the federal government, the American people expect the best of you,” he said, adding, “I am not going to leave this post in January without addressing this problem.” Mr. Luthi, who became the service director in July 2007, said that the agency had requested the investigation after receiving whistle-blower complaints in the spring of 2006, and that it had already made several changes. A spokesman for Mr. Devaney declined to comment.

A former official named in the report, Jimmy W. Mayberry, pleaded guilty to a felony conflict-of-interest charge in August and faces up to five years in prison and a $250,000 fine.

In late 2002, when he was about to retire, Mr. Mayberry drafted a “statement of work” for a consulting contract to perform essentially identical functions to his own. He then retired, started a company, and in June 2003 won the contract with the help of Ms. Denett and Milton Dial, another friend at the agency.

Danny Onorato, the lawyer representing Mr. Mayberry, said his client had a sentencing date in November, but added that “we are not interested in having Mr. Mayberry speak.”

The inspector general also urged the administration to take action against several of the officials in the royalty-in-kind program who accepted gifts from the oil companies, by firing them or banning them for life from certain positions. Several have already been transferred out of the program but remain on the government payroll, the report said.

But two of the highest-ranking officials who were subjects of the investigations will apparently escape penalty. Both retired during the investigation, rendering them safe from any administrative punishment, and the Justice Department has declined to prosecute them on the charges suggested by the inspector general.

One of them is Ms. Denett, who oversaw the Denver-based royalty-in-kind program from Washington. The report contends that she manipulated the contracting process to steer the consulting work to Mr. Mayberry, her friend and former special assistant.

Six other companies submitted bids for the contract, spending more than $90,000 on their proposals. The report said an Interior Department procurement lawyer described the arrangement as one in which “the fix is in throughout — this is tainted from the beginning, that is totally improper.”

Ms. Denett did not return a message left at her home on Wednesday with her husband, Paul A. Denett, who was the top procurement official in the White House Office of Management and Budget until he resigned this month. He declined to comment.

But the report quotes Ms. Denett repeatedly telling investigators that in retrospect she had made a “very poor” decision. She also told them that “she had been preoccupied with a very stressful personal issue at the time,” which the report did not describe.

The other high-ranking official the Justice Department has declined to prosecute is Gregory W. Smith, the former program director of the royalty-in-kind program. Mr. Smith worked in Colorado and reported to Ms. Denett. He retired in 2007.

The report said that Mr. Smith improperly used his position with the royalty program to get an outside consulting job helping a technical services firm seek deals with oil and gas companies with which he was also conducting official business.

The report accused Mr. Smith of improperly accepting gifts from the oil and gas industry, of engaging in sex with two subordinates and of using cocaine that he purchased from his secretary or her boyfriend several times a year between 2002 and 2005. He sometimes asked for the drugs and received them in his office during work hours, the report said.

The report also said that Mr. Smith lied to investigators about these and other incidents, and that he urged the two women subordinates to mislead the investigators as well.

In discussions with investigators, the report said, Mr. Smith acknowledged buying cocaine from his secretary and having a sexual encounter with her at her home, but he denied discussing drugs at work. He also denied telling anyone to lie, saying that he only told people that “no one has a right to know what I do on my personal time.”

The report omits any response from Mr. Smith about allegations of sexual misconduct with another female subordinate.

Mr. Smith on Wednesday referred questions to his lawyer, Steve Peters, who said he had not yet seen the report. But he lauded Mr. Smith’s work with the royalty-in-kind program.

“Greg Smith was a loyal, dedicated employee of the federal government for more than 28 years, and notwithstanding the unfair and in many respects inaccurate allegations in today’s report, Greg is very proud of what he accomplished — and he should be,” Mr. Peters said. A Justice Department spokeswoman, Laura Sweeney, declined to explain why prosecutors chose not to bring charges against Ms. Denett or Mr. Smith, citing departmental policy.

The report also detailed cozy relationships between energy companies and other officials in the royalty-in-kind program office.Some 19 officials — a third of the staff — took gifts from oil and gas executives, some with “prodigious frequency,” it said.

On one occasion in 2002, the report said, two of the officials who marketed taxpayers’ oil got so drunk at a daytime golfing event sponsored by Shell that they could not drive to their hotels and were put up in Shell-provided lodging. Two female employees “engaged in brief sexual relationships with industry contacts,” the reports’ cover memo said, adding that “sexual relationships with prohibited sources cannot, by definition, be arms’ length.”

On one occasion, the report said, the royalty-in-kind program allowed a Chevron representative who had won a bid to purchase some of the government’s oil to pay taxpayers a lower amount than his winning offer because he said he had made a mistake in his calculations. A report from Mr. Devaney’s office earlier this year found that the program had frequently allowed companies that purchased the oil and gas to revise their bids downward after they won contracts. It documented 118 such occasions that cost taxpayers about $4.4 million in all.

On another occasion, the new report said, one of the officials shared information about the confidential price a pipeline company was charging the government.

The report said that the officials told investigators that the gifts and socializing did not affect how they treated the companies in their official duties.

They also said they did not view socializing with oil company representatives and taking gifts as inappropriate because they said they needed to be part of the marketing culture in order to market the program’s oil and gas. Several of the lower-ranking program officials have been transferred out of their old jobs, the report said. It recommended stronger supervision and a series of changes to make clearer the limits of acceptable behavior, some of which Mr. Luthi said have already been implemented.

==By Charlie Savage

Washington — As Congress Prepares To Debate Expansion Of Drilling In Taxpayer-Owned Coastal Waters, The Interior Department Agency That Collects Oil And Gas Royalties Has Been Caught Up In A Wide-Ranging Ethics Scandal — Including Allegations Of Financial Self-Dealing, Accepting Gifts From Energy Companies, Cocaine Use And Sexual Misconduct.

In Three Reports Delivered To Congress On Wednesday, The Department’s Inspector General, Earl E. Devaney, Found Wrongdoing By A Dozen Current And Former Employees Of The Minerals Management Service, Which Collects About $10 Billion In Royalties Annually And Is One Of The Government’s Largest Sources Of Revenue Other Than Taxes.

“a Culture Of Ethical Failure” Pervades The Agency, Mr. Devaney Wrote In A Cover Memo.

The Reports Portray A Dysfunctional Organization That Has Been Riddled With Conflicts Of Interest, Unprofessional Behavior And A Free-For-All Atmosphere For Much Of The Bush Administration’s Watch.

The Highest-Ranking Official Criticized In The Reports Is Lucy Q. Denett, The Former Associate Director Of Minerals Revenue Management, Who Retired Earlier This Year As The Inquiry Was Progressing.

The Investigations Are The Latest Installment In A Series Of Scathing Inquiries Into The Program’s Management And Competence In Recent Years. While Previous Reports Have Focused On Problems The Agency Had In Collecting Millions Of Dollars Owed To The Treasury, And Hinted At Personal Misconduct, The New Reports Go Far Beyond Any Previous Study In Revealing Serious Concerns With The Integrity And Behavior Of The Agency’s Officials.

In One Of The New Reports, Investigators Concluded That Ms. Denett Worked With Two Aides To Steer A Lucrative Consulting Contract To One Of The Aides After He Retired, Violating Competitive Procurement Rules.

Two Other Reports Focus On “a Culture Of Substance Abuse And Promiscuity” In The Service’s Royalty-In-Kind Program. That Part Of The Agency Collects About $4 Billion A Year In Oil And Gas Rather Than Cash Royalties.

Based In Suburban Denver And Modeled To Operate Like A Private Sector Energy Company, The Decade-Old Royalty-In-Kind Program Sells Oil And Gas On The Open Market. Its Employees Are Subject To Government Ethics Rules, Such As Restrictions On Taking Gifts From People And Companies With Whom They Conduct Official Business.

One Of The Reports Says That The Officials Viewed Themselves As Exempt From Those Limits, Indulging Themselves In The Expense-Account-Fueled World Of Oil And Gas Executives.

The Reports Provoked Immediate Outrage In Congress. Senator Ron Wyden, An Oregon Democrat Who Is Chairman Of The Public Lands And Forests Subcommittee, Accused The Minerals Management Service On The Senate Floor Wednesday Of “a Pattern Of Abuses And Mismanagement” That Is Costing Taxpayers Billions.

And Senator Bill Nelson, Democrat Of Florida, Suggested That Congress Should Not Lift Its Ban On Offshore Drilling — A Hot-Button Issue In His State — Because Of The Problems Identified.

The Report Says That Eight Officials In The Royalty Program Accepted Gifts From Energy Companies Whose Value Exceeded Limits Set By Ethics Rules — Including Golf, Ski And Paintball Outings; Meals And Drinks; And Tickets To A Toby Keith Concert, A Houston Texans Football Game And A Colorado Rockies Baseball Game.

The Investigation Also Concluded That Several Of The Officials “frequently Consumed Alcohol At Industry Functions, Had Used Cocaine And Marijuana, And Had Sexual Relationships With Oil And Gas Company Representatives.”

The Investigation Separately Found That The Program’s Manager Mixed Official And Personal Business. In Sometimes Lurid Detail, The Report Also Accuses Him Of Having Intimate Relations With Two Subordinates, One Of Whom Regularly Sold Him Cocaine.

The Culture Of The Organization “appeared To Be Devoid Of Both The Ethical Standards And Internal Controls Sufficient To Protect The Integrity Of This Vital Revenue-Producing Program,” One Report Said.

The Director Of The Minerals Management Service, Randall Luthi, Said In A Conference Call With Reporters That The Officials Implicated In The Reports Had Violated The Public’s Trust.

“when You Come To Work For The Federal Government, The American People Expect The Best Of You,” He Said, Adding, “i Am Not Going To Leave This Post In January Without Addressing This Problem.” Mr. Luthi, Who Became The Service Director In July 2007, Said That The Agency Had Requested The Investigation After Receiving Whistle-Blower Complaints In The Spring Of 2006, And That It Had Already Made Several Changes. A Spokesman For Mr. Devaney Declined To Comment.

A Former Official Named In The Report, Jimmy W. Mayberry, Pleaded Guilty To A Felony Conflict-Of-Interest Charge In August And Faces Up To Five Years In Prison And A $250,000 Fine.

In Late 2002, When He Was About To Retire, Mr. Mayberry Drafted A “statement Of Work” For A Consulting Contract To Perform Essentially Identical Functions To His Own. He Then Retired, Started A Company, And In June 2003 Won The Contract With The Help Of Ms. Denett And Milton Dial, Another Friend At The Agency.

Danny Onorato, The Lawyer Representing Mr. Mayberry, Said His Client Had A Sentencing Date In November, But Added That “we Are Not Interested In Having Mr. Mayberry Speak.”

The Inspector General Also Urged The Administration To Take Action Against Several Of The Officials In The Royalty-In-Kind Program Who Accepted Gifts From The Oil Companies, By Firing Them Or Banning Them For Life From Certain Positions. Several Have Already Been Transferred Out Of The Program But Remain On The Government Payroll, The Report Said.

But Two Of The Highest-Ranking Officials Who Were Subjects Of The Investigations Will Apparently Escape Penalty. Both Retired During The Investigation, Rendering Them Safe From Any Administrative Punishment, And The Justice Department Has Declined To Prosecute Them On The Charges Suggested By The Inspector General.

One Of Them Is Ms. Denett, Who Oversaw The Denver-Based Royalty-In-Kind Program From Washington. The Report Contends That She Manipulated The Contracting Process To Steer The Consulting Work To Mr. Mayberry, Her Friend And Former Special Assistant.

Six Other Companies Submitted Bids For The Contract, Spending More Than $90,000 On Their Proposals. The Report Said An Interior Department Procurement Lawyer Described The Arrangement As One In Which “the Fix Is In Throughout — This Is Tainted From The Beginning, That Is Totally Improper.”

Ms. Denett Did Not Return A Message Left At Her Home On Wednesday With Her Husband, Paul A. Denett, Who Was The Top Procurement Official In The White House Office Of Management And Budget Until He Resigned This Month. He Declined To Comment.

But The Report Quotes Ms. Denett Repeatedly Telling Investigators That In Retrospect She Had Made A “very Poor” Decision. She Also Told Them That “she Had Been Preoccupied With A Very Stressful Personal Issue At The Time,” Which The Report Did Not Describe.

The Other High-Ranking Official The Justice Department Has Declined To Prosecute Is Gregory W. Smith, The Former Program Director Of The Royalty-In-Kind Program. Mr. Smith Worked In Colorado And Reported To Ms. Denett. He Retired In 2007.

The Report Said That Mr. Smith Improperly Used His Position With The Royalty Program To Get An Outside Consulting Job Helping A Technical Services Firm Seek Deals With Oil And Gas Companies With Which He Was Also Conducting Official Business.

The Report Accused Mr. Smith Of Improperly Accepting Gifts From The Oil And Gas Industry, Of Engaging In Sex With Two Subordinates And Of Using Cocaine That He Purchased From His Secretary Or Her Boyfriend Several Times A Year Between 2002 And 2005. He Sometimes Asked For The Drugs And Received Them In His Office During Work Hours, The Report Said.

The Report Also Said That Mr. Smith Lied To Investigators About These And Other Incidents, And That He Urged The Two Women Subordinates To Mislead The Investigators As Well.

In Discussions With Investigators, The Report Said, Mr. Smith Acknowledged Buying Cocaine From His Secretary And Having A Sexual Encounter With Her At Her Home, But He Denied Discussing Drugs At Work. He Also Denied Telling Anyone To Lie, Saying That He Only Told People That “no One Has A Right To Know What I Do On My Personal Time.”

The Report Omits Any Response From Mr. Smith About Allegations Of Sexual Misconduct With Another Female Subordinate.

Mr. Smith On Wednesday Referred Questions To His Lawyer, Steve Peters, Who Said He Had Not Yet Seen The Report. But He Lauded Mr. Smith’s Work With The Royalty-In-Kind Program.

“greg Smith Was A Loyal, Dedicated Employee Of The Federal Government For More Than 28 Years, And Notwithstanding The Unfair And In Many Respects Inaccurate Allegations In Today’s Report, Greg Is Very Proud Of What He Accomplished — And He Should Be,” Mr. Peters Said. A Justice Department Spokeswoman, Laura Sweeney, Declined To Explain Why Prosecutors Chose Not To Bring Charges Against Ms. Denett Or Mr. Smith, Citing Departmental Policy.

The Report Also Detailed Cozy Relationships Between Energy Companies And Other Officials In The Royalty-In-Kind Program Office. Some 19 Officials — A Third Of The Staff — Took Gifts From Oil And Gas Executives, Some With “prodigious Frequency,” It Said.

On One Occasion In 2002, The Report Said, Two Of The Officials Who Marketed Taxpayers’ Oil Got So Drunk At A Daytime Golfing Event Sponsored By Shell That They Could Not Drive To Their Hotels And Were Put Up In Shell-Provided Lodging. Two Female Employees “engaged In Brief Sexual Relationships With Industry Contacts,” The Reports’ Cover Memo Said, Adding That “sexual Relationships With Prohibited Sources Cannot, By Definition, Be Arms’ Length.”

On One Occasion, The Report Said, The Royalty-In-Kind Program Allowed A Chevron Representative Who Had Won A Bid To Purchase Some Of The Government’s Oil To Pay Taxpayers A Lower Amount Than His Winning Offer Because He Said He Had Made A Mistake In His Calculations. A Report From Mr. Devaney’s Office Earlier This Year Found That The Program Had Frequently Allowed Companies That Purchased The Oil And Gas To Revise Their Bids Downward After They Won Contracts. It Documented 118 Such Occasions That Cost Taxpayers About $4.4 Million In All.

On Another Occasion, The New Report Said, One Of The Officials Shared Information About The Confidential Price A Pipeline Company Was Charging The Government.

The Report Said That The Officials Told Investigators That The Gifts And Socializing Did Not Affect How They Treated The Companies In Their Official Duties.

They Also Said They Did Not View Socializing With Oil Company Representatives And Taking Gifts As Inappropriate Because They Said They Needed To Be Part Of The Marketing Culture In Order To Market The Program’s Oil And Gas. Several Of The Lower-Ranking Program Officials Have Been Transferred Out Of Their Old Jobs, The Report Said. It Recommended Stronger Supervision And A Series Of Changes To Make Clearer The Limits Of Acceptable Behavior, Some Of Which Mr. Luthi Said Have Already Been Implemented.

==

September 11, 2008 nyt

Sex, Drug Use and Graft Cited in Interior Department

By CHARLIE SAVAGE

In three reports delivered to Congress on Wednesday, the department’s inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service, which collects about $10 billion in royalties annually and is one of the government’s largest sources of revenue other than taxes.

“A culture of ethical failure” pervades the agency, Mr. Devaney wrote in a cover memo.

The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch.

The highest-ranking official criticized in the reports is Lucy Q. Denett, the former associate director of minerals revenue management, who retired earlier this year as the inquiry was progressing.

In one of the new reports, investigators concluded that Ms. Denett worked with two aides to steer a lucrative consulting contract to one of the aides after he retired, violating competitive procurement rules.

One of the reports says that the officials viewed themselves as exempt from those limits, indulging themselves in the expense-account-fueled world of oil and gas executives.

The reports provoked immediate outrage in Congress. Senator Ron Wyden, an Oregon Democrat who is chairman of the Public Lands and Forests Subcommittee, accused the Minerals Management Service on the Senate floor Wednesday of “a pattern of abuses and mismanagement” that is costing taxpayers billions.

And Senator Bill Nelson, Democrat of Florida, suggested that Congress should not lift its ban on offshore drilling — a hot-button issue in his state — because of the problems identified.

The investigation separately found that the program’s manager mixed official and personal business. In sometimes lurid detail, the report also accuses him of having intimate relations with two subordinates, one of whom regularly sold him cocaine.

The director of the Minerals Management Service, Randall Luthi, said in a conference call with reporters that the officials implicated in the reports had violated the public’s trust.

A former official named in the report, Jimmy W. Mayberry, pleaded guilty to a felony conflict-of-interest charge in August and faces up to five years in prison and a $250,000 fine.

Danny Onorato, the lawyer representing Mr. Mayberry, said his client had a sentencing date in November, but added that “we are not interested in having Mr. Mayberry speak.”

The report also said that Mr. Smith lied to investigators about these and other incidents, and that he urged the two women subordinates to mislead the investigators as well.

The report omits any response from Mr. Smith about allegations of sexual misconduct with another female subordinate.

Mr. Smith on Wednesday referred questions to his lawyer, Steve Peters, who said he had not yet seen the report. But he lauded Mr. Smith’s work with the royalty-in-kind program.

The report also detailed cozy relationships between energy companies and other officials in the royalty-in-kind program office. Some 19 officials — a third of the staff — took gifts from oil and gas executives, some with “prodigious frequency,” it said.

On another occasion, the new report said, one of the officials shared information about the confidential price a pipeline company was charging the government.

The report said that the officials told investigators that the gifts and socializing did not affect how they treated the companies in their official duties.

http://www.dailykos.com/story/2010/06/18/877102/-Dick-Cheney-rears-his-head-over-the-Gulf-disaster

Fri Jun 18, 2010 at 01:52 AM PDT

Dick Cheney rears his head over the Gulf disaster

by 1BQ Follow

You probably know that Halliburton, the contractor BP hired to cement the well, is under investigation for its role in this disaster.

You may also know that Dick Cheney has ended his seclusion in a secure, though disclosed, location.

But do you know just how much of this disaster could be attributed, both directly and indirectly, to Dick Cheney? Viewed as a whole, his actions while in office make him look at least as culpable in the Gulf oil disaster as Tony Hayward. Please bear with me - this will take a while to explain...

The failure of the MMS to regulate the oil and gas industries is now legendary (to the extent that it was regulated at all). It could be argued that the American Petroleum Institute regulated the MMS, apparently, and despite its inquiries, with Congress' permission. How this came about was a long-term strategy.

It seems that Wyoming, Cheney's home state, has been a breeding ground for fossil fuel enthusiasts. And those enthusiasts found employment working for and with the Bush Administration:

The Wyoming connection was especially evident from 2000 to 2008, during the two administrations of President George W. Bush and his vice president, Wyoming native Dick Cheney. A former chief executive of Halliburton, Cheney took an early and very active interest in energy policy and placed several Wyoming political friends in key positions in the Department of Interior.

Among those friends and the key positions they occupied:

-- David J. Gribbin III, a high school and college friend from Wyoming, was Cheney's transitional liaison with Congress. Gribbin previously worked for Cheney as Halliburton’s chief lobbyist in the capital.

-- Thomas Sansonetti, a prominent Cheyenne lawyer, GOP activist, and member of the conservative Federalist Society, who headed the team choosing top personnel for the Department of Interior, which oversees Minerals Management Service.

-- Gayle Norton, who, though not from Wyoming, was picked by Sansonetti to head Interior. Native Coloradan Norton was a longtime protégée of James Watt in the Mountain States Legal Foundation, of which Watt was the founding director. Norton was also a member of the Federalist Society.

-- Rebecca W. Watson, a former Sheridan, Wyoming, lawyer, who Norton named as assistant Interior Secretary for Land and Minerals Management. Watson was responsible for the Bureau of Land Management, the Office of Surface Mining and the Minerals Management Service.

-- Rejane "Johnnie" Burton of Casper had managed the Wyoming Department of Revenue under former Gov. Jim Geringer. In 2007, Burton resigned under fire from her $168,000-a-year Minerals Management director’s job after the Department of Interior Inspector General found widespread corruption in the agency’s Colorado-based royalty collection office. In addition, questions were raised in Congress about Burton’s handling of offshore leases. Burton now works as a $49,000-a-year aide for longtime friend and former legislative colleague Wyoming U.S. Rep. Cynthia Lummis.

--Randall Luthi, of Freedom, is a former speaker of the Wyoming House and a former aide to U.S. Sen. Alan K. Simpson. He succeeded Burton as MMS director. Luthi left his Minerals Management position when President Obama took office in January 2009. A little over a year later, Luthi was named president of the National Ocean Industries Association, the main industry trade group for the offshore oil and gas industry. (Luthi testified May 27 before the House Natural Resources committee investigating the Gulf of Mexico disaster. (Complete hearing transcript - PDF.) Several of the companies involved in the Deepwater Horizon disaster are members of Luthi’s association. One of the National Ocean Industries’ stated missions: reduce federal regulatory controls. More about Luthi here (be sure to click through the links; the Daily Beast article is a doozy!)

-- Former Wyoming U.S. Rep. Barbara Cubin, as chairman of the House Resources Energy and Minerals subcommittee, was Congress’ most strident champion of the now-abandoned "Royalty-in-Kind" program that had allowed energy producers to payMineral Management Services royalties with gas or oil instead of cash. Where was the protest by the deficit hawks?

--Current U.S. Rep. Cynthia Lummis pushed a proposal through the state Board of Land Commissioners to commit Wyoming’s 50 percent share of federal natural gas royalties to the Minerals Management Royalty-in-Kind program While serving as state treasurer in 2005. In 2008, Royalty in Kind accounted for more than half of the $543 million in federal gas royalties dispersed to the state. Deficit hawks, are you reading this?

Got the picture? The Department of Interior in general, and the MMS in particular, were oozing with Cheney devotees. This ensured that the primary regulatory body for the fossil fuel industry would be "industry friendly." But that's just part of the story.

OOPS but

CBS) A government whistle-blower says the Bush administration covered up the reasons for a toxic coal slurry spill in Appalachia that ranks among the worst environmental disasters in U.S. history. [6]

- Jack Spadaro tells Correspondent Bob Simon that political appointees in the Department of Labor whitewashed a report that said an energy company that had contributed to the Republican Party was responsible for the 300-million gallon spill.

- Simon's report will be broadcast on 60 Minutes, Sunday, April 4, at 7 p.m. ET/PT. Spadaro was until recently the head of the National Mine Health and Safety Academy and played a key role in investigating the spill, which was 25 times the size of the Exxon Valdez disaster in Alaska.

- "It polluted 100 miles of streams, killing everything in the streams, all the way to the Ohio River," says Spadaro of the October 2000 spill that affected West Virginia and Eastern Kentucky.

- "The Bush administration came in and the scope of our investigation was considerably shortened. I had never seen something so corrupt and lawless in my entire career...interference with a federal investigation of the most serious environmental disaster in the history of the Eastern United States."

- Spadaro says his investigation found Massey Energy, the owner of the impoundment containing the viscous and toxic liquid, knew the containment was weak, and in fact, had leaked once before. The company was going to be cited for serious violations that could have resulted in large fines and criminal charges, Spadaro says.

5/10

WASHINGTON — The chief of the Interior Department's land management bureau has stepped in to run the much-criticized agency that oversees offshore oil drilling after its director resigned under pressure.

Bob Abbey took over Friday as acting director of the Minerals Management Service and will also keep his post at the Bureau of Land Management. He replaces Elizabeth Birnbaum, who left Thursday after 10 months as director of the agency that oversees drilling on federal land and water. It has been buffeted by criticism from lawmakers and others since the massive oil spill began last month in the Gulf of Mexico.

In naming Abbey to the post, Interior Secretary Ken Salazar said Abbey has the experience necessary to reform the drilling agency and "help tackle this crisis in the Gulf."

Birnbaum, a former environmental lawyer, had been blamed for failing to move quickly to reverse a culture in which MMS regulators grew too close to the oil and natural gas industry. Some agency inspectors have accepted trips, gifts and other favors from the industry, and even negotiated jobs while on the federal payroll, the Interior Department's acting inspector general said in a scathing report this week.

Last week, Salazar proposed abolishing the minerals agency, replacing it with three separate entities. Salazar said the agency's three main functions – energy development, enforcement and revenue collection – should be split up to avoid what he called "real or perceived" conflicts of interests.

Abbey, 58, of Nevada, has worked for more than 32 years at state and federal land agencies, including eight years as head of the BLM's Nevada office.

Abbey will turn over daily management duties at the land bureau, which oversees 253 million acres of public lands mostly in the West, to deputy director Mike Poole.

As MMS director, he will be in charge of a 1,700-employee agency that oversees drilling on federal lands and in federal water and collects an average of $13 billion a year in royalties.

Abbey previously was a partner in the private consulting firm Abbey, Stubbs, & Ford, LLC with offices in Las Vegas and Reno, Nev.

The Obama-appointed MMS executive who "resigned" has much environmental protection in her resumé. According to her MMS web biography:

July 15, 2009, assumed duties as Director of MMS;

before that, worked for Committee on House Administration;

2001-2007, Attorney for American Rivers, the nation’s leading river conservation organization;

1999-2001 litigator at MMS for MMS, Bureau of Land Management, and Office of Surface Mining and Reclamation, on issues of mining law, public land management and hydropower licensing [no mention off-shore oil];

1991 to 1999 House Committee on Natural Resources;

1987 to 1991 Water Resources Program of the National Wildlife Federation;

Has been a member of National Capital Section of the American Water Resources Association, Arlington County Environment and Energy Conservation Commission, and Environment, Energy and Natural Resources Section of the District of Columbia Bar.

This does not sound like someone with too close ties to the oil and drilling industry.

Compare that to the MMS bio for the only Deputy Director with minerals training and experience, Walter D. Cruickshank, a Bush hold-over (appointed in 2002): At MMS he assists management of energy and mineral resources on the outer continental shelf — including environmentally safe exploration, development, and production of oil and natural gas. Cruickshank has a Bachelor of Arts in Geological Sciences and a Doctorate in Mineral Economics.

===

polar bear scandal?

http://motherjones.com/environment/2011/07/charles-monnett-polar-bear-scientist

From the transcript, provided to Mother Jones by Public Employees for Environmental Responsibility (PEER), it's clear that the interview focused largely on the polar bear paper, with the agents asking questions about his methodology and conclusions. The paper, published in the journal Polar Biologyin 2006, documented four dead polar bears in the Beaufort Sea during the course of an annual whale survey in September 2004. It was the first paper to document dead bears, and Monnett and his coauthor projected that there would likely be an increase in bear deaths as sea ice declined in the region. During their conversation, Monnett noted that the paper was reviewed both internally at Minerals Management Service (now known as BOEMRE) and by scientists outside of the agency, and it was approved by MMS management before they submitted it to the journal. At the journal, it was reviewed by three anonymous peer reviewers and approved for publication.

At no point in the course of the interview, which lasted for two hours, did the agents state exactly what they were investigating. At one point, Jeff Ruch, the executive director of PEER (as well as an attorney and an observer of the investigation), asked about the allegations. May responded, "Well, the scientif-—well, scientific misconduct, basically, uh, wrong numbers, uh, miscalculations, uh—."

"The level of criticism that they seem to have leveled here, scientific misconduct, uh, suggests that we did something deliberately to deceive or to, to change it," Monnett replied. "I sure don't see any indication of that in what you're asking me about."

http://www.propublica.org/article/new-reports-details-wide-ranging-ethics-scandal-at-interior-dept-910

http://www.propublica.org/scandal/oil-for-sex/

Scandal: Sex, Drugs, and Oil

Updated Sept. 10

According to a series of reports sent to Congress on September 10 by the Interior Department's inspector general, department employees have engaged in serious misconduct[1] throughout the last several years. Allegations include rigging oil contracts, taking money as oil consultants, having sexual relationships with oil and gas company representatives, and drug use.

The report focuses on the Mineral Management Services' royalty-in-kind program. MMS receives $10 billion annually in royalties from oil companies.

One official has already pleaded guilty to a felony conflict-of-interest charge. Several years ago, he wrote a consulting contract for the agency, retired, and proceeded to create a company that, unsurprisingly, won the contract. Several employees were complicit in steering the contract his way.

But two of the highest-ranking officials involved in the scandal will likely avoid punishment, reports the New York Times.

Essential Documents:

In a cover letter[2] (PDF), Inspector General Earl Devaney details the "culture of ethical failure" in the department.

In the first report[3] (PDF), investigators focus on Gregory Smith, the former program director of the royalty-in-kind program. As the Times reports, "The report accuses Mr. Smith of improperly accepting gifts from the oil and gas industry, of engaging in sex with two subordinates, and of using cocaine that he purchased from his secretary or her boyfriend several times a year between 2002 and 2005."

The second report[4] (PDF) look at the Interior officials who marketed taxpayers' oil. From the Times: "The report found that 19 officials -- about one-third of the program's staff -- accepted gratuities from oil companies, which was prohibited because they conducted official business with the industry."

And the third report[5] (PDF) focuses on Lucy Denett, the former associate director of minerals revenue management, who allegedly manipulated the contracting process to steer a contract to her friend Jimmy Mayberry. Mayberry pleaded guilty[6] to conflict of interest charges earlier this year.

Essential Reading:

Check out TPMmuckraker's coverage - they were covering rumors of the scandal[7] back in January of last year.

New Report Details Wide-Ranging Ethics Scandal at Interior Dept.

by Paul Kiel

ProPublica, Sep. 10, 2008, 4:30 p.m.

Update: We’ve just added the scandal under “Sex, Drugs, and Oil[1]” to our Scandal Watch.

Interior Department Inspector General Earl Devaney (Chris Greenberg/AP Photo)

There’s quite a scandal[2] brewing at the Interior Department. According to a series of reports sent to Congress today by the department’s inspector general, Interior employees rigged oil contracts, took money as oil consultants, had sexual relationships with oil and gas company representatives, and engaged in other misconduct.

The accusations—centered on the Minerals Management Service, which collects about $10 billion in oil and gas royalties annually—are detailed at length in an article just out[3] from the New York Times.

Since the reports don’t seem to be publicly available, we thought we’d post them.

Some of these files are quite large, so beware.

In a cover letter[4] (PDF), Inspector General Earl Devaney details the “culture of ethical failure” in the department.

In the first report[5] (PDF), investigators focus on Gregory Smith, the former program director of the royalty-in-kind program. As the Times reports, “The report accuses Mr. Smith of improperly accepting gifts from the oil and gas industry, of engaging in sex with two subordinates, and of using cocaine that he purchased from his secretary or her boyfriend several times a year between 2002 and 2005.”

The second report[6] (PDF) look at the Interior officials who marketed taxpayers’ oil. From the Times: “The report found that 19 officials—about one-third of the program’s staff—accepted gratuities from oil companies, which was prohibited because they conducted official business with the industry.”

And the third report[7] (PDF) focuses on Lucy Denett, the former associate director of minerals revenue management, who allegedly manipulated the contracting process to steer a contract to her friend Jimmy Mayberry. Mayberry pleaded guilty[8] to conflict of interest charges earlier this year.