Spill Puts Spotlight on Regulator With Mixed Record

[IndianaJoe]

<http://www.propublica.org/ion/blog/item/>

"In 2008, we (Pro Publica) pointed out that MMS was in quite a bit of trouble for ethical violations <4> by its officials. The scandal involved sex, drugs and (quite literally) sleeping with the very industry it was regulating. Here’s how The New York Times summarized <5> the government’s investigation:

The investigation also concluded that several of the officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.” The investigation separately found that the program’s manager mixed official and personal business. In sometimes lurid detail, the report also accuses him of having intimate relations with two subordinates, one of whom regularly sold him cocaine.

That hasn’t been the end of MMS’s troubles. According to an audit earlier this month by the Government Accountability Office, the regulator has hardly been a straight shooter <6> on offshore drilling and the risks involved. The GAO found that MMS withheld data on offshore drilling in Alaska from regional staff members at the agency involved in environmental analyses. The report also found that MMS lacked sufficient guidelines to properly analyze the risks of drilling in the region.

“We found considerable variation among MMS’s ... regions in how they assess what constitutes a ‘significant’ environmental impact,” reads the report <7> (PDF). And on the withholding of data: “Some of its own scientists have alleged that their findings have been suppressed.” (In a formal response to the report, the Department of the Interior said it “generally agrees” with the findings.)

The Project on Government Oversight, a nonprofit watchdog, told us regulation wasn’t a priority for MMS.

“It was an agency that was very strapped in its human resources, and essentially the priority for the agency was on production rather than on regulation and oversight,” said Mandy Smithberger of POGO. She added that under Ken Salazar, who became secretary of the interior in January 2009, this may be changing, “but we have not seen material changes so far.”

One step in the process that oil companies must go through to get approval for drilling involves submitting an exploration plan <8> that lays out worst-case scenarios. The Huffington Post points ou <9>t that MMS did not require BP—which owns the well that blew up—to file a plan for reacting to a “potential blowout,” meaning an uncontrollable spill. According to The Huffington Post’s reporting, the more limited plan BP filed with MMS predicted that if worse came to worst, a spill would release 162,000 gallons of oil <9>. The Deepwater Horizon spill has already exceeded that prediction.

That doesn’t make MMS look very good, since one of its officials vouched for BP’s plan at the time. From The Huffington Post <9> again:

An MMS official certified that BP “has the capacity to respond, to the maximum extent practicable, to a worst-case discharge, or a substantial threat of such a discharge.” But after the explosion, the scale of the accident required BP to get assistance from the Coast Guard, other federal agencies and other oil companies such as Shell, which is sending half a dozen vessels to help with the clean-up effort.

Maybe that $500,000 safeguard (the one that MMS said should be studied) doesn’t seem so expensive anymore, compared with the $6 million per day BP is now paying in cleanup costs <10>.

We spoke with two people involved in the industry, who have also worked with MMS, who said that the branch of MMS that deals with safety inspections has a solid reputation, unlike the scandal-ridden part <4> that deals with collecting royalties from oil companies.

“They have a lot of good people doing their best,” said Tyler Priest, a professor at the University of Houston. Priest said he sits on an MMS advisory committee and has done studies for the agency. “I’ve seen what they do up close, and it is a quality organization.”

[IndianaJoe]

1. Obama inherited the MMS.

The MMS's present head, Liz Birnbaum, did not get appointed until 7/15/09.

[chill_wind]

2. I remember the reports of the deep corruption and scandal.

• Headed a two-year investigation into the Minerals Management Service, a group which handles royalty payments tendered by oil companies in exchange for drilling on government lands. In his investigation, he found MMS employees were drinking and using drugs on the job and were having sexual relationships with oil industry contracts. In his report, he said the MMS had a "culture of substance abuse and promiscuity."

-Earl Devaney (who's now in Obama's cabinet.)

http://www.time.com/time/nation/article/0,8599,1881351,00.html

[IndianaJoe]

3. Yeah...I remember too.

<http://www.propublica.org/article/new-reports-details-wide-ranging-ethics-scandal-at-interior-dept-910>

[chill_wind]

4. As disgusting as I thought the recent revelations of the SEC porn junkie wastes of

taxpayer money were, these scum make them look like a bunch of pimple-faced frat boys.

Thanks for the additional links and memory refreshers.

Altogether depressing. From the NYT 2008 story link:

A former official named in the report, Jimmy W. Mayberry, pleaded guilty to a felony conflict-of-interest charge in August and faces up to five years in prison and a $250,000 fine.


But two of the highest-ranking officials who were subjects of the investigations will apparently escape penalty. Both retired during the investigation, rendering them safe from any administrative punishment, and the Justice Department has declined to prosecute them on the charges suggested by the inspector general.