MMS

Can someone please tell me why MMS employees aren’t in jail?

Minerals Management Service, Dysfunctional Organization

S. Elizabeth (Liz) Birnbaum assumed duties as Director of the Minerals Management Service (MMS) on July 15, 2009 and resigned on May 27, 2010 amidst the Deepwater Horizon oil spill.

The MMS is also responsible for inspection and oversight of energy companies to ensure they are following the law and protecting the safety of their workers and the environment.

Gifts and Gratuities

On September 10, 2008, Interior's inspector reported more than a dozen employees of the agency's royalty-in-kind program for accepting gifts, steering contracts, drug use and illicit sex with employees of the energy firms.

In September 2008, reports by the Inspector General of the Interior Department, Earl E. Devaney, were released that implicated over a dozen officials of the MMS of unethical and criminal conduct in the performance of their duties. The investigation found MMS employees had taken drugs and had sex with energy company representatives. MMS staff had also accepted gifts and free holidays amid "a culture of ethical failure", according to the investigation. The New York Times's summary states the investigation revealed "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."

A May 2010 inspector general investigation revealed that MMS regulators in the Gulf region had allowed industry officials to fill in their own inspection reports in pencil and then turned them over to the regulators, who traced over them in pen before submitting the reports to the agency. MMS staff had routinely accepted meals, tickets to sporting events, and gifts from oil companies. Staffers also used government computers to view pornography. In 2009 the regional supervisor of the Gulf region for MMS pled guilty and was sentenced to a year's probation in federal court for lying about receiving gifts from an offshore drilling contractor. "This deeply disturbing report is further evidence of the cozy relationship between MMS and the oil and gas industry," Salazar said.

Revolving Door With Industry

The Project On Government Oversight (POGO) alleges that MMS has suffered from a systemic revolving door problem between the Department of Interior and the oil and gas industries. Thirteen months after departing as MMS director, Bush appointee Randall Luthi became president of the National Oceans Industries Association (NOIA) whose mission is to "to secure reliable access and a favorable regulatory and economic environment for the companies that develop the nation's valuable offshore energy resources in an environmentally responsible manner." Luthi succeeded Tom Fry, who was MMS director under the Clinton administration. Luthi and Fry represented precisely the industries their agency was tasked with being a watchdog over. Lower level administrators influencing MMS have also gone on to work for the companies they once regulated:

Paul Stang served as Regional Supervisor for Leasing and Environment for MMS, then went to work for Shell Oil Company in 2007 on its Arctic Ocean programs.

Greg Smith served as the Deputy Program Manager of the Royalities in Kind (RIK) program between 2001 and 2004. Thereafter until 2007 he was director of RIK. POGO's report states that when he was working on the RIK program, Smith received $30,000 from Geomatrix, an oil industry consulting firm. After leaving government, Smith went to work for Tenaska Marketing Ventures, described on their website as a "leading marketer of natural gas in North America".

Jimmy Mayberry served as Special Assistant to the Associate Director of Minerals Revenue Management (MRM), managed by MMS, from 2000 to January 2003. After he left, he created an energy consulting company that was awarded an MMS contract via a rigged bid. He was convicted along with a former MMS coworker Milton Dial who also came to work at the company. Both were found guilty of felony violation of conflict of interest law.

L. Poe Leggette served as Assistant Solicitor for DOI for over a decade, advising the MMS on their onshore and offshore energy programs, as well as royalty valuation issues. He now heads the Western Lands and Energy Practice at Fulbright & Jaworski whose clients are the oil and gas industries.

Role in 2010 BP Oil Spill

Among MMS's regulatory decisions contributing to the 2010 BP oil spill:

MMS's 2009 decision that acoustically-controled shut-off valve (BOP) would not be required as a last resort against underwater spills at the site.

MMS's failure to suggest other “fail-safe” mechanisms after a 2004 report raised questions about the reliability of the electrical remote-control devices.

Prior to Director Birnbaum's appointment, MMS granted a categorical exclusion waiver on April 6, 2009 to BP exempting it from National Environmental Policy Act's requirements including a detailed environmental analysis, concluding the spill risk in that part of the Gulf was “minimal or nonexistent.” Such NEPA waivers have become routine at MMS, and the Interior department approves 250 to 400 per year for Gulf of Mexico projects.

MMS gave permission to BP and dozens of other oil companies to drill in the Gulf of Mexico without first getting required permits from another agency (National Oceanic and Atmospheric Administration, or NOAA) that assesses threats to endangered species — and despite strong warnings from NOAA about the impact the drilling was likely to have on the gulf. Those approvals, federal records show, include one for the well drilled by the Deepwater Horizon rig, which exploded on April 20, killing 11 workers and resulting in thousands of barrels of oil spilling into the gulf each day.

MMS routinely overruled its staff biologists and engineers who raised concerns about the safety and the environmental impact of drilling proposals in the Gulf and in Alaska.

Since 20 April 2010, when an explosion on the Deepwater Horizon rig killed 11 workers, 27 new offshore drilling projects have been approved by MMS. All but one project was granted similar exemptions from environmental review as BP. Two were submitted by the UK firm, and made the same claims about oil-rig safety and the implausibility of a spill damaging the environment.