WASHINGTON: Gasoline prices jumped to unprecedented levels in the wholesale markets yesterday as Hurricane Ike tore across the Gulf of Mexico, threatening to strike Texas and its refineries.
Back here in Washington, meanwhile, we have our own oil crisis.
In the report released late on Wednesday, investigators said they “discovered a culture of substance abuse and promiscuity” in which Department of the Interior employees accepted gratuities “with prodigious frequencies.”
The report drafted by the department’s Inspector General Earl Devaney deplored “a culture of ethical failure” in which regulators received lavish gifts from members of the oil industry.
Following a two-year, five-million-dollar investigation which included testimony from 233 witnesses and 470,000 pages of documentation, Devaney said the inquiry “revealed... a pervasive culture of exclusivity, exempt from the rules that govern all other employees of the federal government,” Devaney said.
The report said U.S. government brokers responsible for collecting billions of dollars in federal oil royalties involve 13 former and current Interior Department employees in Denver, Colorado and Washington.
Their purported improprieties include influencing contracts, working part-time as private oil consultants and having sexual relationships with — and accepting golf and ski trips, snowboarding lessons and concert tickets from — oil company employees.
The reports describe a party house atmosphere inside the Denver Minerals Management Service office responsible for marketing oil and natural gas that energy companies barter to government in lieu of cash royalty payments for drilling on federal lands.
The government received $4.3 billion in such royalty-in-a-kind payments last year. The oil and gas is then put in the nation’s emergency stockpile.
Between 2002 and 2006, 19 oil marketers, nearly a third of the 55-person staff in the Denver office, received gifts and gratuities from oil and gas companies, including Shell, Chevron Corp., Hess Corp. and the Denver based Gary-Williams Energy Corp.
The explosive accusations focus on the Mineral Management Service’s Royalty in Kind (RIK) program, which manages commercial oil and gas sales activity and barters that oil and gas to the government in lieu of payments for drilling on federally-owned offshore lands.
Devaney said the investigations took so long because Chevron refused to cooperate. An Interior Department official said Chevron would not allow investigators in interview its employees.
Don Campbell, a Chevron spokesman, responded to the charges by telling reporters that the company “produced all of the documents that the government requested months ago.”
Outrage over the misconduct was immediate, and Democrats opposed to expanded drilling seized on the report.
“This all shows the oil industry holds shocking sway over the administration and even key federal employees,” Sen. Bill Nelson, D-Florida, told reporters.
Congressman Nick Rahall of West Virginia, the Democratic chairman of the House Natural Resources Committee, said the inspector general report “reads like a script from a television miniseries — and one that cannot air during family viewing time.”
