WASHINGTON, Sept. 10, 2008
Sex For Oil Scandal At Interior Department
Inspector General Reports Accuse Government Employees Of Rigging Contracts In Exchange For Sex And Gifts
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Play CBS Video Video In Bed With Big Oil Government employees who oversee offshore oil drilling are involved in a drug and sex scandal with big oil companies, according to an investigative report. Sharyl Attkisson reports.
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The allegations of bad behavior involve 13 government employees in Denver and Washington, reports CBS News investigative correspondent Sharyl Attkisson. Those accused are workers who sell U.S. mineral rights to oil companies. Such sales are one of the government's biggest sources of revenue besides taxes.
But the Inspector General for the Interior Department says they rigged contracts, and engaged in illegal moonlighting, drugs, sex and gift-taking from oil company representatives, according to three reports released Wednesday.
The reports revealed startling allegations including that an employee attended a so-called "treasure hunt" in the desert with all expenses paid by an oil producer, and that a former supervisor - who bought cocaine from a colleague then boosted her performance award - had sex with subordinates, and steered government contracts to an outside business where he also worked, Attkisson reports.
The investigations reveal a "culture of substance abuse and promiscuity" by a small group of individuals "wholly lacking in acceptance of or adherence to government ethical standards," wrote Inspector General Earl E. Devaney.
The reports describe a fraternity house atmosphere inside the Denver Minerals Management Service office responsible for marketing the oil and gas that energy companies barter to the government instead of making cash royalty payments for drilling on federal lands. The government received $4.3 billion in such Royalty-in-Kind payments last year. The oil is then resold to energy companies or put in the nation's emergency stockpile.
Between 2002 and 2006, nearly a third of the 55-person staff in the Denver office received gifts and gratuities from oil and gas companies, the investigators found.
Devaney said the former head of the Denver Royalty-in-Kind office, Gregory W. Smith, used illegal drugs and had sex with subordinates. The report said Smith also steered government contracts to a consulting business that was employing him part-time.
Smith, contacted by e-mail by The Associated Press, said he had not seen the report and could not respond. He and nine other employees in the Denver office are mentioned in the reports.
The findings are the latest sign of trouble at the Minerals Management Service, which has already been accused of mismanaging the collection of fees from oil companies and writing faulty contracts for drilling on government land and offshore. The charges also come as lawmakers and both presidential candidates weigh giving oil companies more access to federal lands, which would bring in more money to the federal government.
"The government employees who oversee off-shore oil drilling are literally and figuratively in bed with big oil," said Sen. Bill Nelson, D-Fla.
"This all shows the oil industry holds shocking sway over the administration and even key federal employees," Nelson added. "This is why we must not allow big oil's agenda to be jammed through Congress."
While most government royalties for drilling on federal lands are paid in cash, the government in recent years has been receiving a greater share of its oil and gas royalties in actual product. More of that oil is also being sold on the open market, versus being deposited in the Strategic Petroleum Reserve, the nation's emergency oil stockpile. Congress earlier this year passed a law halting deposits of oil to the reserve to alleviate high gasoline prices.
Interior Secretary Dirk Kempthorne, who was asked about the reports earlier in the day before they were given to him and congressional offices, said the investigation was prompted by a 2006 phone call from employee who said there were ethical lapses in the Denver office.
"I look forward to having the opportunity to review the inspector general's findings so we can take the appropriate actions," Kempthorne said.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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The secrets of tennis legend 
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See all 185 CommentsPosted by starleo14672
You are telling me that repubs are the only ones involved in the s e x trade, the porno trade, the only ones who are pimps, the only ones buying?
Posted by starleo14672
So, you are telling me that the repubs are the only ones who fathered the 30 million unborn, fetuses who have been aborted since Roe vs. Wade?
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Posted by minnick8 at 11:04 AM : Sep 11
Not if it is a lying republipig
The fish rots from the head.
Sooooooo....it rotted under Clinton also?
The fish rots from the head.
+ repo
Who is in charge of the Dept of Interior? a Bush appointee, he was and is asleep at the wheel, someone that Cheney handpicked as dumb as nails to help Big OiL
Smith, contacted by e-mail by The Associated Press, said he had not seen the report and could not respond. He and nine other employees in the Denver office are mentioned in the reports.
The findings are the latest sign of trouble at the Minerals Management Service, which has already been accused of mismanaging the collection of fees from oil companies and writing faulty contracts for drilling on government land and offshore. The charges also come as lawmakers and both presidential candidates weigh giving oil companies more access to federal lands, which would bring in more money to the federal government.
"The government employees who oversee off-shore oil drilling are literally and figuratively in bed with big oil," said Sen. Bill Nelson, D-Fla.
Now we understand why Palin was picked, drill baby drill. Mc Same Off shore drilling Now. Palin in her return to Alaska, Mc Same is in Alaska''s corner believe me.How can anyone think to trust these scumbags one S*E*X scandal after another now drugs for oil and we are paying what now at the pump . Why has bush kept this from the American people and who is punished for doing this, NO ONE but us.
5 - There is corruption in every business period. Most people involved in all businesses are basically hard working and honest. All Oil Companies are not corrupt by a long shot. Just a very few. As in any business, any law breaking needs to be prosecuted and punished. Those of us in the industry applaud those prosecutions...we are citizens and consumers too.
6 - Maybe I am missing something, but I fail to see how MMS employees in Denver have anything to do with Offshore Oil and Gas Leasing. Leasing is done by lottery. If there are any shenanigans in that process, the Companies who lost the bid would be far more put out than you over it, trust me.
7 - If "Big Oil" saw an alternative energy that could be a big money maker they would be all over it like white on rice. Business is business. Forward looking businesses are always looking for that edge.
8 - All those profits don''t just sit in someones bank account. They go back into the business for more exploration and development to bring more product to the market......oh they also go into your mutual fund investments. You could be gracious and give them back I guess.
1 - Big oil is us. If you have any mutual funds or some type of retirment, chances are you are invested in "Big Oil".
2 - Big Oil controls less than 20% of the worlds oil. Approx 70% of the worlds oil is controlled by Government owned oil companies. Russia, Venezuela etc.
3 - You can blame Bush all you want but until All of us quit using oil to live, someone will be there to explore and produce it.
4 - I challenge anyone here to live longer than 5 minutes without using something that uses hydrocarbon based energy. You can not do it. EVERYTHING uses energy to get to us so we can use it. The very computer you are typing on is built with oil based products (plastic).
".... These are not Bush appointees, they are bureaucrats who have worked at the MMS for many different administrations. (Yes I am one of the evil people). I guess it is just easier to be intellectually lazy and make broad sweeping accusations...... My guess is that none of the ranters even have a clue what taking "Royalties In Kind" even means and how much more the Feds (that you and I people) get in revenue by trading this way. .... I suspect many here don''''t want to know the real truth anyway.....it is far easier to complain. "
Wow You Got The Right Nick, JockeyShifter, it means now who shfts from one ***** to another ... often?
What kind of Sick Excuses are ytou giving for Taking Person Gifts, to sweeten the Contracts in favor of the Oil Company?? This, in some way gives America a better deal? It is perveted, twisted beliefs like this that encourage Theft adn, Fraud in the American Government... and you gladly admit to being in the "gang". Wow you do show some courage, even if you are wrong on your opinion, "That it is O.K."
Posted by jockyshifter
So, tell us the whole truth.
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