Secretary of the Interior Ken Salazar announced Wednesday he plans to visit Lakewood Thursday with a message of sweeping reform for the department, which he said has been “tarnished by ethical lapses and criminal behavior that has extended to the highest levels of government.”
In scathing remarks delivered at the White House, the former senior senator from Colorado said he plans to meet with federal employees at the Minerals Management Service (MMS), the agency that collects billions of dollars for the federal government from oil and gas companies that drill on public land. Salazar said he would make it clear he “will no longer tolerate” the “ethical transgressions” that led to last summer’s MMS “scandal involving sex, drugs, and inappropriate gifts from oil and gas companies.”
A series of reports from the Department of Interior inspector general issued in September charged MMS officials with a “culture of ethical failure” and a “culture of promiscuity and substance abuse” at the agency charged with collecting energy royalties for taxpayers. MMS employees, according to the reports, accepted gifts from oil companies, had sex with industry contacts and did drugs at the office and at oil company parties. Other MMS officials steered business to their own companies and set up consultancies to win contracts they drew up themselves.
In November, Interior officials disciplined eight current and former MMS workers for their role in the scandal, with punishments ranging from reprimands to termination. Several of those implicated had already resigned and one pleaded guilty to felony conflict-of-interest charges. Also in November, a former top MMS employee was sentenced to two years probation for devising a scheme to win a $1.4 million consulting contract with MMS after his retirement.
Calling it the “first step of our long-term effort to enact comprehensive, top-to-bottom reform,” Salazar said he intends to review the scandal with MMS employees and discuss the department’s response, including “what additional steps need to be taken.”
MMS distributed a record $23.4 billion in payments from oil and gas companies in 2008, including a record $178.4 million paid to Colorado for its share of royalties from drilling on public lands. Colorado ranks third in the nation in royalty revenue, behind Wyoming’s $1.2 billion and New Mexico’s $614.8 million.
Here are the remarks Salazar made Wednesday at the White House press briefing:
“President Obama has immediately set high ethical standards for service in the federal government. He has shown a commitment to reform that will change business as usual in Washington.
“He has immediately made clear that the type of ethical transgressions, blatant conflicts of interest, wastes and abuses that we have seen over the last eight years will no longer be tolerated.
“Nowhere is President Obama’s commitment to reform and to cleaning up the waste, fraud and abuse of the past more important than at the Department of the Interior, which I now lead.
“Over the last eight years, the Department of the Interior has been tarnished by ethical lapses and criminal behavior that has extended to the highest levels of government.
“The former Deputy Secretary of the Department under the Bush administration, Steven Griles, was sent to prison. It is the department that the American people associate with Jack Abramoff.
“And it is the department that was tarnished by a scandal involving sex, drugs and inappropriate gifts from oil and gas companies.
“The Lakewood, Colorado, office of the Minerals Management Service is tasked with making sure that taxpayers collect their fair share from oil and gas development on our public lands. Last year, that office collected $23 billion on behalf of the American taxpayer.
“Yet during the last administration, some of the employees of that office violated the public trust by accepting gifts and employment contracts from the oil and gas companies they are supposed to be holding accountable.
“Some employees engaged in blatant and criminal conflicts of interest and self dealing. It is one of the worst examples of corruption, abuse, and of government putting special interests before the public interest.
“Tomorrow, I will be traveling to the Lakewood MMS office to meet with employees.
“I will also be announcing our own review of what happened, what has been done to address it and what additional steps need to be taken.
“It will be clear that we will no longer tolerate those types of lapses at any level of government, from political appointees or career employees.
“This is only the first step of our long-term effort to enact comprehensive, top-to-bottom reform of the Department of Interior.
“The American people should be proud of their government.
“Those who work for the government should be proud of their service to the American people. We will work to reform the Department of the Interior, restore the public’s trust and to restore the high level of ethics and accountability that the American people deserve.”
Find PDFs of the inspector general reports on the scandals here, thanks to Paul Kiel at ProPublica. Some of the files are quite large.
• Here’s the cover letter from Inspector General Earl Devaney, providing an overview of the scandal and the “culture of ethical failure” at MMS.
• A redacted report on Gregory Smith details the sex, drugs and oil lease imbroglio the inspector general discovered.
• A redacted report on MMS oil marketing examines ethical problems with the group charged with selling oil on behalf of taxpayers. As many as one-third of the MMS employees in this office accepted gratuities from the industry, according to the report.
• A redacted report on former Associate Director Lucy Denett, accused of handing contracts to a friend, who pleaded guilty to federal charges earlier this year.
