Dept. of Interior: Worst Misconduct Ever! - Oversight & Enforcement - Federal Budget & Tax

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Tuesday, September 16, 2008

Dept. of Interior: Worst Misconduct Ever!

There has been some pretty eye opening stuff going on over at the Department of the Interior's Mineral Management Service (MMS). The Department of the Interior Inspector General released the results of three separate investigations into allegations of misconduct among dozens of employees and managers at the MMS. And the pretty shocking results would even make Lurita Doan blush (or maybe take out her pen and pad and take notes?). The IG report described the MMS as having a "culture of ethical failure" and details some ridiculously arrogant and decrepit behavior. I'm going to quote at length from the IG report's cover letter because, well, you'll see:

More specifically, we discovered that between 2002 and 2006, nearly 1/3 of the entire RIK [Royalty in Kind] staff socialized with, and received a wide array of gifts and gratuities from, oil and gas companies with whom RIK was conducting official business. While the dollar amounts of gifts and gratuities was not enormous, these employees accepted gifts with prodigious frequency. In particular, two RIK marketers received combined gifts 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. When confronted by our investigators, none of the employees involved displayed remorse.

We also discovered a culture of substance abuse and promiscuity in the RIK program - both within the program, including a supervisor, Greg Smith, who engaged in illegal drug use and had sexual relations with subordinates, and in consort with industry. Internally, several staff admitted to illegal drug use as well as illicit sexual encounters. Alcohol abuse appears to have been a problem when RIK staff socialized with industry. For example, when two RIK staff accepted lodging from industry after industry events because they were too intoxicated to drive home or to their hotel. These same RIK marketers also engaged in brief sexual relationships with industry contacts. Sexual relationship with prohibited sources cannot, by definition, be arms-length.

Wow. That's juicy stuff. Sounds like a bunch of high school kids left alone for the weekend by Mom and Dad and decide to throw a party - for four years. On top of this, perhaps the more disturbing aspect of the IG's report involved intentional manipulation of the RIK program and contracting process. We've noted in the past the tremendous problems the MMS has displayed in collected oil and gas royalty payments (see here, here, here, and here) that was first reported in the New York Times in September of 2006. One of the three IG investigations found that senior executives at MMS acted above the law in positioning themselves to personally benefit from federal contracts.

In the matter involving [Minerals Revenue Management Associate Director Lucy] Dennet, [Dennet's Special Assistant Jimmy] Mayberry, and [MMS Associate Director] Milton Dial, the results of this investigation paint a disturbing picture of three Senior Executives who were good friends, and who remained calculatedly ignorant of the rules governing post-employment restrictions, conflicts of interest and Federal Acquisition Regulations to ensure that two lucrative MMS contracts would be awarded to the company created by Mr. Mayberry - Federal Business Solutions - and later jointed by Mr. Dial. Ms. Dennet manipulated the contracting process from the start. She worked directly with the contracting officer, personally participated =on the evaluation team for both contracts, asked for an increase to the first contract amount, and had Mayberry prepare the justification for the contract increase. Ms. Dennet also appears to have shared with Mr. Mayberry the Key Qualification criteria upon which bidders would be judged, two weeks before bid proposals on the first contract were due.

Cripes. You can see the details of contracts awarded to Federal Business Solutions on their FedSpending.org profile. The company has received over $1,000,000 from MMS since FY 2003 for providing "other administrative support services," although I think it was MMS that was providing the support. While we've written a good deal about federal employees leaving the government only to return to government work on the (much higher) payroll of a private contractor, I'm not sure we've seen federal employees intentionally setting up a contract they would then be paid under as a contractor.

I'm ah...I'm pretty much speechless. I suppose that's why the Project on Government Oversight has called the disaster that has occurred at the MMS the "worst instance of government misconduct" they have ever seen (and be sure to check out POGO's mighty fine blog headlines from this week).