Sex for oil scandal surfaces in US Interior Department

Washington, Sept.11 : American Government officials handling billions of dollars in oil royalties reportedly engaged in illicit sex with employees of energy companies they were dealing with and received numerous gifts from them, federal investigators said Wednesday.

According to CBS and the New York Times, at least 13 government employees in Denver and Washington are involved in the sex for oil scandal that surfaced in the US Interior Department.

The paper and the channel quoted an Inspector General for the Interior Department as saying that these employees rigged contracts, engaged in illegal moonlighting, drugs, sex and gift-taking from oil company representatives.

Reports revealed startling allegations that included an employee attending a so-called "treasure hunt" in the desert with all expenses paid by an oil producer, a former supervisor buying cocaine from a colleague for boosting her performance award, sex with subordinates and steering government contracts to an outside business.

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," writes Inspector General Earl E. Devaney.

The reports describe a fraternity house atmosphere inside the Denver Minerals Management Service office responsible for marketing the oil and gas that energy companies barter to the government instead of making cash royalty payments for drilling on federal lands.

The government received 4.3 billion dollars in such Royalty-in-Kind payments last year. The oil is then resold to energy companies or put in the nation's emergency stockpile.

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, the investigators found.

Devaney said the former head of the Denver Royalty-in-Kind office, Gregory W. Smith, used illegal drugs and had sex with subordinates. The report said Smith also steered government contracts to a consulting business that was employing him part-time.

Smith, contacted by e-mail, said he had not seen the report and could not respond. He and nine other employees in the Denver office are mentioned in the reports.

The findings are the latest sign of trouble at the Minerals Management Service, which has already 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 lawmakers and both presidential candidates weigh giving oil companies more access to federal lands, which would bring in more money to the federal government.

Interior Secretary Dirk Kempthornesaid the investigation was prompted by a 2006 phone call from employee who said there were ethical lapses in the Denver office.

ANI