Cities without landmarks
Niagara Falls, U.S./Canada
Try, if you can, to ignore all the lurid coke-and-sex bombshells contained in the three Department of Interior Inspector General reports about the shenanigans at the U.S. Minerals Management Service (MMS). The program director who snorted speed off a subordinate’s toaster oven, and made her give him a blow job while driving around the neighborhood. The two “MMS Chicks” who were notorious for getting plastered at conventions and having one-night stands with oil industry employees.
Try — and yes, I know it’s hard — try even to ignore the allegation that one program director told a subordinate that if she could score him some coke during the MMS performance appraisal period, he would increase her performance award. What’s the big deal? Who wouldn’t be motivated by such an incentive? And what’s a little drunken sex and coke binging on government time among friends? It happens to the best of us.
The significance of the three reports delivered by the inspector general to Congress on Wednesday lies not in the prurience of some of the indiscretions, but in the symbolism. The Royalty-in-Kind Program of the U.S. Minerals Management Service is where offshore drilling meets the U.S. government. And gosh, is it ever one heck of a mess. You want a toxic oil spill in the Gulf of Mexico? Just read the reports.
The Minerals Management Service is an agency within the Department of Interior, set up during the Reagan administration to manage natural mineral resources on the Outer Continental Shelf and some federal and Indian lands. MMS generates about $8 billion in revenue from leasing the rights to drill for oil and gas — that’s the single largest non-tax source of revenue for the federal government.
MMS has two mechanisms for carving out that revenue. In the Royalty-in-Value program, it gets a cut off the top of whatever the oil companies are able to sell their mineral resources for. In the Royalty-in-Kind program — which is where all the above abuses occurred — the energy companies physically deliver oil and gas to MMS, which then pockets the proceeds from selling the goods itself.
Of course, MMS does not actually own any transportation pipelines or storage facilities, so it has to contract out for these services from the private sector. Such a scenario carries with it obvious potential for conflicts of interest and corruption. Sex and drugs get the headlines, but the really serious abuses at the RIK program fell under the category of abusing the public trust. An endless stream of meals, golf and ski trips, and constant partying, all on the oil industry dime. Government officials consulting on the side for private companies looking to get an edge on government deals, or to make connections with other private industry players by capitalizing on their government contacts. One MMS employee was even instructed by his boss to write the specifications for a contract, and then retired, applied for the contract, and got it. Nice work!
Think about this every time you hear John McCain chant “drill, baby, drill.” You might be familiar with the name of one of the oil companies lavishing gifts on MMS employees: the Hess Corp. You may recall that at precisely the moment that McCain recanted his long-held position against offshore drilling, he was showered with campaign contributions from Hess family members and company employees. I guess that’s how the oil business works — you pay off your government officials, and you get the contract.
Several of the key players in this drama were employed with MMS since the inception of the agency, all the way back in 1982. These are longtime civil servants who ran amok, and not directly appointed Bush cronies. Greg Smith, the assistant RIK program director, who, according to the inspector general’s report, referred to “cocaine” as “office supplies” and who moonlighted for an environmental services firm that hired him to set up meetings with MMS clients, comes off as a one-of-a-kind wild man.
However, the Royalty-in-Kind program did not become fully operational until 2003, and thus at the very least, operational responsibility for what transpired falls under Bush’s ambit. And I’d argue that this is more than just a technicality. Is it that hard to imagine that the muckity-mucks at RIK were taking their behavioral cues from the two oil men at the top of the command hierarchy in Washington?
The inspector general, Earl Devaney, reports that a common refrain from the RIK employees accused of wrongdoing was that they just didn’t think that federal government conflict-of-interest rules and ethical guidelines applied to them — even though the evidence is clear that they had attended annual seminars outlining all the rules that they then proceeded to break. As a division of government that actually sold oil and gas, they considered themselves part of the oil-and-gas industry. There was even a formal effort to devise a strategy for getting RIK exempted from the guidelines that other federal employees had to follow!
Our investigation revealed that many RIK employees simply felt that federal government ethics standards and DOI policies were not applicable to them because of their “unique” role in MMS. When interviewed, many RIK employees said they felt that in order to effectively perform their official duties, they needed to interact in social settings with industry representatives to obtain “market intelligence.” Some felt their free attendance at industry functions was an absolute necessity given that it was industry’s practice to conduct business over lunch, dinner, and golf outings.
Does such a cavalier disregard of the responsibility inherent in government office remind you of anyone? If there is one thing that history will remember about the Bush-Cheney years, it will be that this administration was profoundly confident that it was above the law, that the rules governing other mortals simply did not apply to them. What cues do you take from a White House that concocts legal rationales for torture, makes up evidence to justify invading a sovereign nation, and willfully ignores climate change science that might hurt the profit margins of their most avid contributors — energy companies?
Anything goes! Send out for some more office supplies! Drill, baby, drill!
Niagara Falls, U.S./Canada
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