Muckraker: Grist on Politics

Yesterday’s revelation that 13 Interior Department employees who handle oil royalties are under investigation for allegedly engaging in illicit sex with and accepting gifts from employees of oil companies may affect the debate over drilling currently underway in Congress.

An Inspector General’s report describes a “culture of substance abuse and promiscuity” at the agency, which is charged with issuing offshore drilling leases and collecting royalties from oil companies. “Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representatives,” according to the report.

Nearly a third of the staff of the Denver Minerals Management Service office accepted gifts from oil and gas companies between 2002 and 2006, from companies that included Chevron, Shell, and Hess, according to the report. MMS collects roughly $10 billion in royalties each year. The report notes that “sexual relationships with prohibited sources cannot, by definition, be arms-length.”

As Congress gears up for a fight over whether or not to expand drilling, opponents of opening up more areas to leasing are pointing to this new scandal as evidence that corruption is rampant in the agency that would be charged with handling new leases.

“This is why we must not allow Big Oil’s agenda to be jammed through Congress,” Sen. Bill Nelson (D-Fla.), told the Associated Press, noting that the report “shows the oil industry holds shocking sway over the administration and even key federal employees.” Sen. Jeff Bingaman (D-N.M.), chair of the Energy and Natural Resources Committee, also told the AP that the report “raises very serious questions” about the royalty collection process, adding that this is problematic “given the potential for expanded domestic drilling.”

Rep. Henry Waxman (D-Calif.), chair of the House Oversight and Government Reform Committee, has slated a hearing on the matter for Wednesday, Sept. 17.