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November 10, 2009
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Ear to the Ground

Interior Dept. + Financial Hanky-Panky + Sex = Scandal!

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Posted on Sep 10, 2008
Departamento del Interior
pnt.gov

The Interior Department scandal breaks just as Congress prepares to debate the hot-button issue of expanded oil drilling in taxpayer-owned coastal waters.

Three reports from the Department of Interior’s inspector general found wide-ranging ethics violations between the department’s Minerals Management Service and the energy companies from which it is charged with collecting royalties. Allegations of financial improprieties, illegal gifts, and even the occasional sex- and drug-crazed indiscretion created what the author of the reports called “a culture of ethical failure” within the agency. Ouch.


The New York Times:

As Congress prepares to debate expansion of drilling in taxpayer-owned coastal waters, the Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal—including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct.

In three reports delivered to Congress on Wednesday, the department’s inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service, which collects about $10 billion in royalties annually and is one of the government’s largest sources of revenue other than taxes.

“A culture of ethical failure” besets the agency, Mr. Devaney wrote in a cover memo.

The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch.

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By Purple Girl, September 12, 2008 at 11:42 am #

10 billion in ‘Royalties’ Exxon made that in One Quarter!And this others did about the Same…So why such a Short Check? What about our Property lease Payments, The Repayment on Our loans? Reimbursement for the War in Iraq which was for the sheer benefit of the Oil inudstry?Reimbursemnt for the effects of these Unsecured Loans and their devasting effect on jobs the economy, and all the other things WE can not afford anymore for OUR Country due to you draining the Well? I think it’s close to 4 TRILLION on your Revolving creditline!
Let’s get the shit off the bottom of our shoes- shall We?
The only reason We have not been able to get Our troops out of iraq is because the Oil industry has not secured their Oil Fields. The Gov’t has not signed over it’s Rights to the multinationals- Like We did !They need to secure Those - thus having a foot in the door in the M.E. So they can proceed to move stratedgically across nations who are not in the UAE Good Graces.
We are not just over there to capture the oil for the Oil’Royals’ we are over there as their Hired Hitmen!
So we Revoke all Public land Leases- push them back on their own Property (Poachers), Demand all Loan and ‘cash advances’ be repaid immediately, Repro capitol to cover the short fall.
Then We use the energy we need - from All energy sources, and sell the remaining on the open market.
We invest back into Solar panel production so every home & building has Solar capability, use Windmills in acceptable areas. Work on capturing Wave energy.
Oil has had a Bloody Reign during the last century- We’ve seen enough to realize it’s total costs outweigh it’s value.

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By Matthew, September 11, 2008 at 6:56 pm #
(Unregistered commenter)

Kinda gives a whole new meaning to “drill, baby, drill.” 
And how does one get a job at the Interior Department?

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By msgmi, September 11, 2008 at 5:59 pm #
(Unregistered commenter)

Anyone who is into sex, drugs, and other unethical activities will have a chance to be hired by MMS in order for them to replace those in line to be purged.

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By Leefeller, September 11, 2008 at 3:50 pm #

Does this article have any connection with Fanny and Freddie’s double Whammy, does seem to be a connotation here someplace.  Palin will clean up all this kind of undesirable goings on, she has been said to have fired someone for having an affair, however I may be wrong,  a political favor may change the whole thing.

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By msgmi, September 11, 2008 at 3:01 pm #
(Unregistered commenter)

The MMS personnel involved in this ‘alleged’ scandal need not fear any type of severe reprecussions. Historically, unethical activities by gov’t employees are deemed misdemeanors and in-house punitive action are usually dismissed with a slap on the wrist and in some cases result in promotions.

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By southparker, September 11, 2008 at 11:22 am #
(Unregistered commenter)

They are in training for their after-public service careers as lobbyists.  Just trying to get the jump on any competition…they’re shoe-ins for any such openings, probably already have had offers.

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By G.Anderson, September 11, 2008 at 10:33 am #

The epitome of everything. Partying while Rome burns.

I guess they have a lot to celebrate, gas prices at an all time HIGH. Off shore oil drilling, a done deal..

Profits of the oil companies sky rocketing…and Best of all an Oil Man in the White House, and another friend of Big Oil on the way..

And what was that Story, burried in the back pages somewhere, about the North Pole melting, and the Gulf Stream losing salinity?

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By Outraged, September 11, 2008 at 2:20 am #

Chevron, Shell, Gary-Williams Energy Corp. and Hess Corp. gave gifts to RIK staffers although they conducted business with the unit, either producing oil or buying it. Last May, investigators found that RIK staffers sometimes decided which company should win an oil contract in informal discussions among themselves and that dollar values of 118 of the sale contracts were later revised downward, costing taxpayers more than $4 million. (The WSJ is estimating the amount to be 4.4 million, but what’s $400,000 between friends)

The investigators detailed gifts accepted by nine of the employees. They said that Stacy Leyshon, a supervisory minerals revenue specialist, got $10,450 in cash awards from the Minerals Management Service for meritorious service from 2002 to 2006, although her name showed up 45 times on Chevron’s expense reports during those years and she got 29 gifts from Shell and Gary-Williams Energy.(emphasis mine)

http://www.mcclatchydc.com/226/story/52243.html

“The Department of the Interior’s Minerals Management Service awarded a new IT operations and support contract to Accenture LLP. The contract, including one base year with nine option years, becomes effective Dec. 1. Its total value could reach $90 million to $100 million over the 10-year life of the contract, according to a press release.”

http://www.examiner.com/x-447-Denver-Young-Democrats-Examiner~y2008m9d10-No-Surprise-Here

>> Oh..and don’t miss the added link at the link above billed this way:  “To see pictures of the corporate executives the M.M.S. has recognized for outstanding service, and to perhaps guess which men were involved in “conflicts of interest”, click here. ”  LOL…

WSJ:  “In a teleconference with reporters Wednesday, MMS director Randall Luthi said he didn’t see any evidence that American taxpayers had been hurt financially by the alleged misconduct. But he said he took the report’s findings “very seriously” and would review the allegations and consider taking appropriate action in the coming months.

Mr. Luthi, who took office in July 2007, said the royalty-in-kind program generated tens of millions of dollars in additional government revenue during the most recent fiscal year, compared with what would have been received if the agency had taken its royalties in cash.”

>> Did I miss something here..?  Mr Luthi said, “he didn’t see any evidence that American taxpayers had been hurt financially by the alleged misconduct.”

Again the WSJ:  “In recent years, the Interior Department has come under criticism from Mr. Devaney’s office for mistakes at MMS that allowed oil companies to avoid paying royalties for offshore-drilling rights—errors that government auditors have estimated will cost taxpayers as much as $10.5 billion over about 25 years.”

>> Yep.  That’s BILLIONS, not millions.  And how about those “mistakes”.... seriously judge, it was a “mistake”, I accidentally knocked down the rich ol’ lady and her purse must’ve caught on my jacket loop…..

But one of the most entertaining comments about the whole sex scandal was this one:  “Sexual relationships with prohibited sources cannot, by definition, be arms-length,” Devaney said.”  (it does make you wonder if Yoo or Addington could find some type of “loophole” for that assertion though…doesn’t it..?  ohhh…I’d love to hear THAT congressional hearing)

AP:  “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.

Smith’s attorney, Steve Peters, called the claims “sheer fantasy.”

>> And you can take his word on that.  Who better than his client would know more about fantasy than a “sex-crazed” cokehead.

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By Big E, September 11, 2008 at 12:38 am #

Drillin’ into anything, anyone and everything that’s mobile or static…
snortin’ & payola… yeah baby…

far leftist hippie types.. no doubt disguised as respectable Repug/neo-cons

lions, tigers & bears…. oh my

bark like a moose

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By Inherit The Wind, September 10, 2008 at 11:14 pm #

This was always the objective of the Bush neo-cons: To create a society in which modern feudal barons could indulge every pleasure, and the guys could screw every female (or male) they wanted without having to earn it, and without repercussions.

This is why George W. Bush placed soviet-style “zampolit” in every Federal agency to root out any independence or questioning of his corrupt regime.  It’s like Andrew Jackson’s “Spoils System” come back to haunt us.

It was inevitable.  The only surprise is that it took so long to be revealed.  Must be that “liberal media” again that doesn’t want to embarrass a Republican bunch of crooks.

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By tyler, September 10, 2008 at 10:04 pm #
(Unregistered commenter)

why is this news?  this is normal protocol for the energy sector.  its like sex, drugs and rock n roll for the mega rich. 

living and working in one of the big oil cities of the world, its staggering the level of debauchery and excess.  inter-office relationships aren’t blinked at, and hard partying is standard.  need a quick fix? just go into any restaurant, bar or lounge that caters to the oil and energy execs and run you hand across the top of any toilet tank and you should have enough coke on it for at least one good line, thanks for the leftovers boys. 

this isn’t scandalous, its reality.  i don’t personally have a problem with any of it, to each their own.  Just don’t tell us your abiding by any moral code that would justify the gross difference in your 7 or 8 figure salary from the average joe’s 5 figure salary.

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By Big B, September 10, 2008 at 7:32 pm #

Wow, another scandal for the dimmo controlled congress to ignore.
Do you suppose if the immigration dept tried to deport Nancy Pelosi’s limo driver she would get off her fat, rich, white, cadillac liberal ass and do something?

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