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US oil officials in sex scandal US oil agency rapped over conduct
(about 6 hours later)
US government officials responsible for collecting revenue from oil companies have been accused of being involved in a culture of "ethical failure". A US government report has accused some interior department officials of unethical conduct while doing business with the oil and gas industry.
An investigation by the Department of the Interior said some of its employees had accepted gifts from and had sex with workers whom they were overseeing. The report says several workers at the agency that collects drilling royalties received gifts from energy companies.
Others are accused of rigging contracts and working as private consultants. Some employees also partied with energy company representatives, having sex and taking illegal drugs, the report said.
The department is responsible for collecting billions of dollars a year from firms drilling on US federal land. The findings come as the US Congress is considering legislation to expand offshore oil drilling.
Some of the most senior officials who have been accused of misconduct have already retired or resigned. The report was the result of a two-year, $5.3m (£3m) investigation by the Department of the Interior's inspector general, Earl Devaney.
The oil companies named in the report were Chevron Corp, Shell Oil, Hess Corp and Gary Williams Energy Corp.
'Royalty-in-kind'
The two-year investigation by the interior department's inspector general, Earl E Devaney, uncovered a "culture of substance abuse and promiscuity" by a small group of individuals "wholly lacking in acceptance of or adherence to government ethical standards".
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' Earl E Devaney, Inspector-General, US Department of the Interior MMS Oil Marketing Group investigation (193KB)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' Earl E Devaney, Inspector-General, US Department of the Interior MMS Oil Marketing Group investigation (193KB)
"Sexual relationships with prohibited sources cannot, by definition, be arms-length," Mr Devaney said in his report.
The alleged improprieties occurred between 2002 and 2006, and involved 19 former and current employees at the offices in Denver and Washington of the department's Minerals Management Service (MMS).The alleged improprieties occurred between 2002 and 2006, and involved 19 former and current employees at the offices in Denver and Washington of the department's Minerals Management Service (MMS).
The officials were involved in the "royalty-in-kind" programme that collects and sells oil and gas handed over by energy companies in return for permission to drill on federal land. About $4bn was collected last year. The officials were involved in the "royalty-in-kind" programme under which energy companies barter oil and gas to the government in return for permission to drill on federal land.
Mr Devaney said a third of the 55 staff in the Denver MMS office were found to have socialised with and had received a wide array of gifts from companies with whom they were conducting business. Two oil marketers received gifts and gratuities on at least 135 occasions. Mr Devaney's investigation uncovered a "culture of substance abuse and promiscuity" by a small group of individuals "wholly lacking in acceptance of or adherence to government ethical standards".
He cited one example of MMS staff accepting accommodation "after industry events because they were too intoxicated to drive home or to their hotel". He said a third of the 55 staff at the Denver office were found to have socialised with and received a wide array of gifts from companies with which they were doing business.
Taxpayers deserve to have confidence that their interests are being protected Sen Jeff Bingaman US federal employees are banned from receiving gifts above $20.
Several members of staff in one office admitted to illegal drug use as well as being "engaged in brief sexual relationships with industry contacts", he added.Several members of staff in one office admitted to illegal drug use as well as being "engaged in brief sexual relationships with industry contacts", he added.
"Sexual relationships with prohibited sources cannot, by definition, be arms-length," Mr Devaney said in his report.
Taxpayers deserve to have confidence that their interests are being protected Sen Jeff Bingaman
The inspector general said that many of those questioned did not believe federal government ethics standards and department policies had applied to them because of their "unique" role.The inspector general said that many of those questioned did not believe federal government ethics standards and department policies had applied to them because of their "unique" role.
"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'," Mr Devaney said."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'," Mr Devaney said.
A senior Democrat said it appeared that officials who were supposed to be looking out for taxpayers had instead been corrupted by gifts and a culture of ethical failure.A senior Democrat said it appeared that officials who were supposed to be looking out for taxpayers had instead been corrupted by gifts and a culture of ethical failure.
"American taxpayers deserve to have confidence that their interests are being protected when it comes to collecting royalties from the production of public oil and gas resources, especially given the potential for expanded domestic drilling," said Sen Jeff Bingaman, chairman of the Senate Energy Committee."American taxpayers deserve to have confidence that their interests are being protected when it comes to collecting royalties from the production of public oil and gas resources, especially given the potential for expanded domestic drilling," said Sen Jeff Bingaman, chairman of the Senate Energy Committee.