In bed with Big Oil

The idea that the Bush administration is in bed with the oil companies took on new meaning with revelations that Interior Department officials engaged in sex, drugs and partying with oil and gas company representatives.

A report from the Interior Department’s own inspector general released Sept. 10 described a 'culture of substance abuse and promiscuity' involving energy company representatives and staff at the department’s Minerals Management Service, which issues offshore drilling leases and handles billions of dollars in oil royalties.

The two-year investigation found that MMS employees were rigging contracts, working as private oil consultants and having sex with, using drugs with and accepting golf and ski trips, dinners and other gifts from oil and gas company employees. The companies cited included Chevron, Shell and Hess Corp.

John McCain's national finance co-chair, Wayne Berman, is a paid lobbyist for a firm that has been paid millions of dollars for lobbying by Chevron and Hess. McCain's chief liaison to Congress, John Green, also worked for the same firm, Ogilvy Government Relations, and lobbied for those same companies until he joined McCain’s campaign.

TalkingPointsMemo.org muckrakers Greg Sargent and Eric Kleefeld report that, according to Senate lobbying disclosure forms, Ogilvy — represented by Berman and Green — lobbied for Chevron and Hess from 2005 to the present, and was paid a total of $2.36 million by the companies.

While the two McCain officials have not been directly linked to the sex-drugs scandal, 'both Berman and Green lobbied for the companies for about three years, continuing when the scandals were already public knowledge, and Berman is still lobbying for them,' Sargent and Kleefeld write.

Interior Department Inspector General Earl Devaney told reporters his investigations exposed 'a culture of ethical failure' and an agency rife with conflicts of interest. 'Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representatives,' who referred to some of the government workers as the 'MMS Chicks,' the report said. Energy companies make 'in-kind' royalty payments to the federal government for drilling on federal or Indian land. Instead of paying cash, the companies give the government oil and gas. The Minerals Management Service then sells the oil on the open market. Sargent and Kleefeld call it 'a program by which the companies can pay for use of public lands with free energy instead of cash, saving them money.'

Last year these royalty-in-kind payments were valued at $4.3 billion. Clearly, oil and gas companies would have an interest in inflating the value of the oil and gas they barter to the government, and in downgrading the value of oil and gas that their subsidiaries might buy back. So it’s not surprising they lavished attentions on this agency. It’s also not surprising, given the Bush administration’s record of cronyism, incompetence and corruption, that its corporate-friendly Interior Department is staffed with individuals ready to literally hop into bed with the companies they are supposed to oversee.

The congressional Joint Economic Committee, chaired by Sen. Charles Schumer of New York, released a report last year charging the Minerals Management Service failed to collect millions of dollars in oil royalties.

The Washington Post reported Sept. 11 that the Interior Department may be allowing oil and gas companies to shortchange taxpayers for drilling off the Gulf Coast. The Post cites a Government Accountability Office review showing that among federally owned oil-producing regions, the Gulf of Mexico ranks among the lowest in the amount the government collects in royalties, despite its vast oil resources. The report cited mismanagement and laxity on the part of the department. 'Interior does not routinely evaluate the federal oil and gas fiscal system, monitor what other governments or resource owners are receiving for their energy resources, or evaluate and compare the attractiveness of federal lands and waters for oil and gas investment with that of other oil and gas regions,' the GAO said.

Reacting to the sex scandal, New York Rep. Louise Slaughter who chairs the House Rules Committee, summed it up this way: 'The Bush administration put an 'America for Sale' sign on the White House lawn from day one and has been courting Big Oil ever since. 'Democrats have been saying it for some time, but this proves it,' she added. 'This administration is literally in bed with Big Oil. Little did we know they were such a cheap date.'

As to McCain, muckrakers Sargent and Kleefeld write, 'it's legit to ask why it is that a campaign that proclaims that it's about reform is taking advice and/or money from lobbyists who were getting paid by companies involved in the scandal, one of whom is still collecting money from them.'

David Donnelly of Campaign Money Watch said the campaign’s reliance on these lobbyists 'certainly puts a little more tarnish on McCain's so-called reformer image.'