Report: U.S. Oil Program Rife with Conflicts, Favoritism, 'Promiscuity'

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By The Editors
September 10, 2008

Government officials in a program that collects royalties from firms drilling on federal land partied and had sexual relationships with employees of oil and gas companies; accepted lavish gifts including ski trips, sports tickets and golf outings; and steered contracts to favored firms, according to a two-year Interior Department investigation released today.

Investigators said they "discovered a culture of substance abuse and promiscuity" in the Colorado office of the program.

The former director of the program was among those who took gifts, the department's inspector general says in the report. Another 13 people in the office of fewer than 60 people have been recommended for administrative action for showing favoritism and having had personal relationships with energy company employees from 2002 through 2006.

The report contains fresh allegations about the culture and practices at the beleaguered royalty-in-kind program of Interior's Minerals Management Service, which each year collects billions of dollars worth of oil and natural gas from companies given contracts to tap energy on federal and Indian lands and offshore. The program, based in Lakewood, Colo., has been under multiple investigations since 2006 by the Interior Department's secretary, its inspector general, the Justice Department and Congress for alleged mismanagement and conflicts of interest.

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