To: LTK007 who wrote (237 ) 9/10/2008 4:16:56 PM From: clutterer 1 Recommendation Respond to of 350 Government oil officials subject of sex inquiry...our "govt" at work for its people By DAVID IVANOVICH Houston Chronicle Copyright 2008 Sept. 10, 2008, 2:35PM A "culture of substance abuse and promiscuity" existed in the federal agency that handles royalty payments from oil companies, including sexual encounters between government employees and industry representatives, according to a memorandum released today. The Interior Department's Inspector General, who has been investigating the U.S. Minerals Management Service's Royalty-In-Kind program, said government employees who were supposed to be regulating the oil companies were engaging in drug use and having sex with industry contacts. "Several staff admitted to illegal drug use as well as illicit sexual encounters," Inspector General Earl Devaney wrote in a Sept. 9 memo to Interior Secretary Dirk Kempthorne released today. Devaney pointed to one supervisor in the Royalty-In-Kind program — under which oil companies are allowed to pay royalties owed to the federal government in actual oil rather than cash — who "engaged in illegal drug use and had sexual relations with subordinates, and in consort with industry." Devaney said that between 2002 and 2006, a third of the Royalty-In-Kind staff socialized with, and received a wide array of gifts and gratuities from companies with which the government was doing business. "While the dollar amounts of gifts and gratuities was not enormous, these employees accepted gives and gratuities on at least 135 occasions from four major oil and gas companies with whom they were doing business — a textbook example of improperly receiving gifts from prohibited sources," Devaney said. "When confronted by our investigators, none of the employees involved displayed remorse." Two program marketers became so intoxicated on one occasion that they had to accept lodging from industry officials, according to the memo. "These same ... marketers also engaged in brief sexual relations with industry contacts," Devaney wrote. "Sexual relations with prohibited sources cannot, by definition, be arms-length." Lawmakers were quick to condemn the alleged cozy relations between agency and industry employees. "The activities at the RIK office are so outlandish that this whole IG report reads like a script from a television miniseries and one that cannot air during family viewing time," said Rep. Nick J. Rahall, D-W.V., chairman of the House Natural Resources Committee that has oversight of the Interior Department. "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."chron.com