Sex Drugs & Rock & Roll for Oil

Sex Drugs & Rock & Roll for Oil

Posted in the Burkesville Forum

“A view from the porch...”

Since: Sep 07


#1 Sep 10, 2008
WASHINGTON (AP) Government officials handling billions of dollars in oil royalties partied, had sex with and accepted golf and ski outings from employees of energy companies they were dealing with, federal investigators said Wednesday.

The alleged transgressions involve 13 former and current Interior Department employees in Denver and Washington. Their alleged improprieties include rigging contracts, working part-time as private oil consultants, and having sexual relationships with and accepting golf and ski trips and dinners from oil company employees, according to three reports released Wednesday by the Interior Department's inspector general.

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, whose office spent more than two years and $5.3 million on the investigation.

"Sexual relationships with prohibited sources cannot, by definition, be arms-length," Devaney said.

The reports describe a fraternity house atmosphere inside the Denver Minerals Management Service office responsible for marketing oil and natural gas that energy companies barter to the government in lieu of cash royalty payments for drilling on federal lands. The government received $4.3 billion in such royalty-in-kind payments last year. The oil and gas is then resold to energy companies or put in the nation's emergency stockpile.

"During the course of our investigation, we learned that some RIK employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives," the report said. Two government employees who had to spend the night after a daytime industry function because they were too intoxicated to drive home were commonly referred to by energy traders as the "MMS Chicks."

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, including Chevron Corp., Shell, Hess Corp. and Denver-based Gary-Williams Energy Corp., the investigators found. Two oil marketers received gifts and gratuities on at least 135 occasions. One admitted having a one-night-stand with a Shell employee. That same individual allegedly passed out business cards for her sex toy business at work, bragging that her income from that business exceeded her salary at the Interior Department.

The reports also said former head of the Denver royalty-in-kind office, Gregory W. Smith, used cocaine and had sex with subordinates. The report said Smith also steered government contracts to a consulting business that paid him $30,000 for his work from April 2002 through June 2003. Smith retired from the office in May 2007.

“A view from the porch...”

Since: Sep 07


#2 Sep 10, 2008
House Natural Resources Chairman Nick Rahall, D-W.Va., said "this whole IG report reads like a script from a television miniseries and one that cannot air during family viewing time. It is no wonder that the office was doing such a lousy job of overseeing the RIK program; clearly the employees had 'other' priorities in that office."

One of the employees named in the investigation, Jimmy Mayberry, already has pleaded guilty in U.S. District Court in Washington to violations of conflict-of-interest laws. The Justice Department declined to prosecute Smith and former Associate Director of the Minerals Revenue Management program Lucy Querques Denett, who the report says manipulated contracts to ensure they were awarded to former Interior employees.

The findings are the latest sign of trouble at the Minerals Management Service, which already has 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 Congress and both presidential candidates are debating whether to open up more federal offshore waters to oil and natural gas drilling.

"This all shows the oil industry holds shocking sway over the administration and even key federal employees," said Sen. Bill Nelson, D-Fla. "This is why we must not allow Big Oil's agenda to be jammed through Congress."

Rep. Darrell Issa, R-Calif., urged Democrats to reopen a House investigation of the Minerals Management Service that was initiated in 2006 by House Republicans. "Looking into and fixing these problems would have meant highlighting the enormous revenues that domestic oil and natural gas production contributes to our treasury. This just didn't fit into their anti-drilling campaign," he said.

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 the 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 help alleviate high gasoline prices.

The investigation was prompted by a 2006 phone call from an employee in the Denver office who reported ethical lapses.

“A view from the porch...”

Since: Sep 07


#3 Sep 14, 2008
Days Before Scandal, Interior Got Ethics Award
Oh, the irony. Just before the Department of Interior's inspector general released reports that laid bare the oil-and-sex scandal in the department's oil royalties office this week, Interior won an annual award from the federal Office of Government Ethics, The Post's Mary Pat Flaherty and Derek Kravitz report.

The inspector general said Wednesday that federal officials in the Mineral Management Service's royalty-in-kind program allegedly were plied with alcohol and expensive gifts from industry representatives, and in some cases had sex and did drugs with them. The Denver-area office takes in roughly $4 billion each year in oil and natural gas reserves from companies drilling on federal and Indian land and offshore.

But, on Monday, the Interior Department was praised for "developing a dynamic laminated Ethics Guide for employees" that was a "polished, professional guide" with "colorful pictures and prints which demand employees' attention." The guide, the award noted, was small enough for employees to carry. Interior also was lauded for having held a four-day seminar for its ethics advisors nationwide.

It isn't known if those seminars included the royalty office, where investigators found that a former program director was paid more than $30,000 for improper outside work, bought cocaine using a personal check from his office and engaged in an illicit sexual relationship with a subordinate; employees accepted gifts, including sports tickets and vacations, from industry executives; and two former officials, with the help of a supervisor, arranged to get themselves hundreds of thousands of dollars in consulting work after they retired.

I wonder if GW Bush was standing next to one of them saying, "You're doing a good job Brownie!"?


Since: Feb 08

Location hidden

#4 Sep 16, 2008
If they are convicted, they need to be imprisoned for lengthy terms.

“A view from the porch...”

Since: Sep 07


#5 Sep 19, 2008
If they are convicted, they need to be imprisoned for lengthy terms.
Not going to happen with this republican administration. Even though they confessed, no prosecution is going to happen against Big Oil.

Interior official hits Justice Department
By Marisa Taylor

WASHINGTON The Interior Department's watchdog criticized the Justice Department on Thursday for declining to prosecute the managers of an oil- and gas-royalty program tainted by allegations of illicit sex, drug use and taking favors worth thousands of dollars.

The Justice Department prosecuted two employees from the Minerals Management Service, but Inspector General Earl Devaney said he didn't know why the department's lawyers didn't act on his recommendation to prosecute two high-ranking officials who have since retired.

"I would have liked a more aggressive approach, and I would have liked to have seen some other people prosecuted here," he said during a hearing before the House of Representatives' Natural Resources Committee.

Last week, in three reports, Devaney implicated a dozen current and former employees of the Minerals Management Service in inappropriate or unethical relationships with industry officials. He described "a culture of substance abuse and promiscuity" in the Royalty in Kind program, in which the government forgoes royalties and takes a share of the oil and gas for resale instead. From 2002 to 2006, nearly a third of the RIK staff socialized with, and received gifts and gratuities from, oil and gas companies.

"Simply stated, the MMS employees named in these reports had a callous disregard for the ethical rules by which the rest of us are required to play," he told committee members.

After cutting deals with prosecutors, former MMS employees Jimmy Mayberry and Milton Dial pleaded guilty to creating a lucrative MMS contract to benefit them both on retirement.

Devaney also recommended that the Justice Department prosecute RIK's former Denver office director, Gregory Smith, and the former associate director of the Minerals Revenue Management office, Lucy Dennet.

The reports accuse Smith of having sex with two subordinates and improperly accepting $30,000 from a private company for marketing its services to oil and gas companies.

Dennet is accused of helping Mayberry create the contract he was awarded after his retirement.

The Justice Department hasn't explained why it declined to prosecute them. "I've been doing this for a long time, and this isn't the first time I've been disappointed by decisions made over there," Devaney said of the Justice Department. "It probably won't be the last."


Since: Feb 08

Location hidden

#6 Sep 19, 2008
whatever happens, I agree with yo on this one. They should be prosecuted, but we don't know all the facts, only what is leaked and made public. There may be circumstances which would make a conviction unlikely. Hopefully at least they are fined and fired.

West Jordan, UT

#7 Feb 5, 2010
read the 10th circuit court decision Christensen v Department of Interior. The MMS as an agency is absolutely corrupt and has been so for years. In the decision that lead up to the rejected appeal, the Federal Judge Paul Cassell (Retired) stated in his decision that Department of Interior Employees committed perjury and lied before a grand jury. This was reported to the Justice department with a copy of the Decision. Nothing was done.

Not being satisfied with their failed attempt (perjury and all still couldn't get an indictment) the employees that had lied to the grand jury (Named by Judge Cassell) then sent the failed secret Grand Jury information to the Internal Revenue Service with the claim that I was a "Non-filing Constitutionalist that espouses non-payment of taxes".

This resulted in a ten year criminal income tax audit based upon a phoney claim for almost $500,000 in back taxes. The results of that audit and the subsequent appearance in the Washington D. C. Tax Court was "no deficirncies in nor income tax due from, nor overpayments due to the petitioner...'

The IRS acted in a very professional and honest manner, with the exception of the initial contact, which was based upon the false and fraudulent claims of the Two Department of Interior Employees.

Our home was put up for sale the next day after the Bankruptcy Court converted me from a Chapter 11 to a Chapter 7 dissaloutionment (had to file bankruptcy to stop the false claims of the BLM/MMS). Another Federal Judge issued a restraining order against the Bankruptcy Court, The IRS and the MMS and stopped the sale until the completion of the audit precipitated by the false and fraudulent claims of the DOI employees.

Banking records were seized without warrant or subpoena. Our ranch was trespassed upon by "Rock and Fish Cops" (wantabe special agents, poorly trained and incompetent - like the guards in Hogan's Heros) from the BLM without benefit of warrant or subpoena, even though they acknowledged that the ranch was owned by my wife fifteen years before the situation went to court and she wasn't involved even peripherially in the false claims made by the BLM.

Had the Department of Justice acted professionally in 1997, the rape of the public coffers by the MMS would in a likelyhood been stopped then instead of continuing on for another ten years!

Greenbrier, AR

#8 Feb 9, 2010
it will kill you

Wellford, SC

#9 Feb 4, 2016
General Earl E. Devaney, whose office spent more than two years and $5.3 million on the investigation.

YOU Spent what???? HOW???? WHY???? ON WHAT????? GAS & entertainment ????? Government and the Health care field are out of control !!!!!!!!!! IF you can't budget it! Than you cut it. if i spent like the government's mentality , i would have 3 life sentences in prison!

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