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Oil inspectors let companies fill in own audits, while one admitted getting high on meth, report says

By John Byrne
Tuesday, May 25, 2010 8:52 EDT
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The agency in charge of overseeing the United States’ oil reserves was plagued with gross mismanagement that in at least one case allowed the companies being inspected to fill in their own audit reports, an Inspector General’s report will reportedly reveal this week.

Regulators overseeing oil drilling in the Gulf of Mexico reportedly allowed oil company officials to fill in their own inspection reports. According to the internal probe being released this week, oil officials sketched out their answers in pencil and turned them over to federal oversight officials, who then traced their answers in pen.

And as if that wasn’t enough, a Louisiana inspector from the Minerals Management Service purportedly admitted to investigators that he’d used crystal methamphetamine, and may have been high on the illegal stimulant during a drilling inspection.

The Inspector General’s report was previewed Tuesday in the New York Times. The report is sure to set off a bombshell in Washington, where Congress is probing how a massive and still-growing oil leak was allowed to happen in the Gulf of Mexico. None of the reports findings directly address the lead-up to the spill from the sinking of Transocean’s Deepwater Horizon rig in April, but they certainly draw a picture of a watchdog asleep — or high — at the wheel.

The report also found that during the tenure of President George W. Bush, from 2005 to 2007, “inspectors accepted meals, tickets to sporting events and gifts from at least one oil company while they were overseeing the industry,” the Times said.

The paper added that “the investigation had been presented to the United States Attorney’s Office for the Western District of Louisiana, which declined prosecution.”

The official probe is said to have relied on confidential sources who tattle-taled on the troubled agency.

They “provided additional information pertaining to M.M.S. employees at the Lake Charles District Office, including acceptance of a trip to the 2005 Peach Bowl game that was paid for by an oil and gas company; illicit drug use; misuse of government computers; and inspection report falsification.”

The latest inquiry into the Minerals Management Service is not the first hard-hitting report to reveal mismanagement by the agency. MMS is charged with overseeing the nation’s oil resources and with collecting royalties from oil production firms. Critics of the agency have said that this dual role often puts the watchdog at a conflict of interest with its purpose of protecting taxpayers.

A 2008 probe found similarly troubling behavior by MMS workers. Citing what he called a “culture of substance abuse and promiscuity” by workers, the Interior’s Department’s inspector general found that employees had sex with and took drugs with energy company representatives. Workers also reportedly enjoyed gifts, ski trips and golf outings paid for by oil giants.

In recent weeks, the Obama administration has proposed to split up the MMS into separate watchdog and royalties collection units.

Noted the AP earlier this month: “One agency would be charged with inspecting oil rigs, investigating oil companies and enforcing safety regulations, while the other would oversee leases for drilling and collection of billions of dollars in royalties.

“Currently, the Minerals Management Service, an arm of the Interior Department, is responsible for collecting more than $10 billion a year from oil and gas drilling and with enforcing laws and regulations that apply to drilling operations.”

 
 
 
 
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