Employees at the Denver branch of the Minerals Management Service (MMS), a bureau of the Department of the Interior that is entrusted with collecting in the region of $11 billion in royalties, have been enjoying a rather cosy relationship with the energy industry that has created a “climate of ethical failure”, according to a report form the watchdog leading the investigation.
Employees of the federal agency broke numerous government rules by accepting gifts, engaged in sex with industry contacts and used illegal drugs during working hours.
A report by the Interior Department's inspector general, Earl E. Devaney, described how employees: “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relations with oil and gas company representatives.
“Sexual relationships with prohibited sources cannot, by definition, be arms-length,” added the clued-up inspector general.
The catalogue of misconduct is alleged to have taken place between 2002 and 2006, and involved 19 miscreant bureaucrats from the agency’s aptly named ‘royalty-in-kind’ program.
The uncovering of the department, which is the U.S. government’s largest source of nontax revenue, by the watchdog is the culmination of several years of investigation.
The report found that some of the employees held side jobs as industry consultants, while others provided confidential information about upcoming government contracts to company representatives.
At the top of the platform of sleaze is director Gregory Smith, who the report alleges: “engaged in illegal drug use and had sexual relations with subordinates, and in consort with industry.”
The report also claimed that Mr. Smith, who retired last year, had employees buy him cocaine during office hours, referring to the drug as “office supplies”. The investigator’s report claims that Mr. Smith acknowledged his drug use to investigators, calling it “episodic”, and also admitted to inappropriate relations with some members of staff.
The report also named, and shamed, four companies: Chevron, a U.S. unit of Royal Dutch Shell, Gary-Williams, and Hess - as soliciting the deals to Colorado based MMS employees. Although the total documented value of all the gifts from the four companies was less than $7,000, “the frequency [and no doubt the nature] of the gifts was quite disturbing,” the reports stated.
In response to the report, which was handed to Congress by inspector general Devaney on Wednesday, Senator Ken Salazar has called for a Senate investigation into “unethical and potentially criminal misconduct” at the MMS offices in Lakewood, just outside of Denver, Colorado.
