Thursday, September 11, 2008

Inspector General Report

The Office of the Inspector General (OIG) released a couple of reports yesterday on the ethical lapses by employees in the royalty in kind program at the Minerals Management Service (MMS). This report made the front page of the Wall Street Journal, but has been ignored by many due to all the hoopla over what is going on with Lehman.

The report found that employees of the office "frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relations with oil and gas company representatives."

I have to say I am a little insulted. I have been to many oil industry events in my life and never been offered sex at any of them.

Here are some of the findings from the report:

"Between 2002 and 2006, nearly 1/3 of the entire RIK staff socialized with, and received a wide array of gifts and gratuities from, oil and gas companies with whom RIK was conducting official business. While the dollar amount of gifts and gratuities was not enormous, these employees accepted gifts with prodigious frequency. In particular, two RIK marketers received combined gifts and gratuities on at least 135 occasions from four major oil and gas companies with whom they were doing business."

"Several staff admitted to illegal drug use as well as illicit sexual encounters. Alcohol abuse appears to have been a problem when RIK staff socialized with industry. For example, two RIK staff accepted lodging from industry after industry events because they were too intoxicated to drive home or to their hotel. These same RIK marketers also engaged in brief sexual relationships with industry contacts. Sexual relationships with prohibited sources cannot, by definition, be arms-length."

The full reports are on this page.

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