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FRONT PAGE CONTRIBUTOR

What Kind of MMS Did Obama Inherit?

President Obama and Interior Secretary Salazar have done their best to shift the blame of the Deepwater Horizon disaster to the Bush Administration and the supposed ‘cozy relationship’ it fostered between the Minerals Management Service and the oil and gas companies it regulates.

The public consciousness perceives a corrupt and incompetent agency, turning a blind eye to the shenanigans of their industry buddies.

In reality:

  • Statistical measures of offshore safety performance improved significantly throughout the Bush years.
  • Ditto the drilling well blowout incident rate.
  • Bush-era internal investigations led to significant improvement in ethics throughout the organization.
  • The Bush Administration increased royalty rates on new leases for the first time in recent memory.

Don’t take my word for it; here are the MMS documents.

Offshore Safety Performance 1996-2008

Offshore Well Blowout Rate 1996-2008

Here’s the source of these two charts.

Ethics Investigations

The Denver Royalty-in-Kind office was a failure of management that did not reflect on either the agency’s regulatory stance or its relationship with the offshore lessees. I blogged about it here, in 2008 when the story broke, and here, just last month. Regardless, this was a Bush-era investigation.

Another Bush-era investigation led to the 2008 convictions of two MMS officials, Jimmy Mayberry and Milton Dial, who colluded to land Mayberry a lucrative consulting arrangement with MMS upon his retirement. Again, this corrupt activity involved revenue collection out of the Denver office, not the offshore regulatory function. The list of Federal agencies which are immune to such insider nest-building is quite short.

A third Bush-era ethics probe is germane to the issue of MMS’s regulatory oversight. An insider tip fingered the head man at the MMS Gulf of Mexico Region in New Orleans.

This investigation was initiated in 2006 based on allegations made by Chris Oynes… . Oynes alleged that Donald C. Howard, Regional Supervisor, GOMR, had attended one or more hunting trips with officials of offshore oil and gas companies. …

On February 3, 2009, Howard was sentenced to one year of probation. He was also ordered to pay a $3,000 fine and a $100 special assessment. In addition, he was ordered to perform 100 hours of community service…

Does the name Chris Oynes, the informant, ring a bell? It should: he’s the guy who was excoriated just a couple of weeks ago when he announced his resignation from MMS. Chris was the associate director of Offshore Energy and Minerals Management who many blamed for the deepwater royalty relief foul-up. The Deepwater Horizon incident was the last straw.

But, but, but…. I thought Oynes and the organization tolerated corruption!?

[Sound effect of heads exploding.]

Actually, the Howard investigation plays a role in the latest MMS ethics scandal to hit the wires, involving several inspectors in the Lake Charles, LA district office.

The investigation follows a report citing workers from the MMS accepting gifts, viewing pornography and possibly allowing oil workers to fill out their own inspection reports.

The report found it was commonplace before 2007 for MMS employees at a Lake Charles, Louisiana office to receive gifts including sporting event tickets and hunting trips from energy companies, Reuters reported.[emphasis added]

Before 2007? Maybe the Inspector General’s Report, rushed to press to bolster the Administration’s case against the MMS, will shed some light on the significance of that timing:

…[A]cceptance of gifts from oil and gas companies were widespread throughout that office, but appeared to have declined after the investigation and termination of Don Howard in January 2007 for his acceptance of a gift from one of these companies.

…[W]hen MMS supervisor Don Howard, of the New Orleans office, was investigated and later terminated in January 2007 for his gift acceptance, this behavior appears to have drastically declined.

You can read the report and decide just how egregious the ethical lapses were, but the fact remains that a Bush-era investigation ended the improper acceptance of meals, gifts, and invitations to sporting events. And what is the outcome of the case under President Obama, after all this huffing and puffing?

On October 15, 2009, the U.S. Attorney’s Office for the Western District of Louisiana declined this case for prosecution. This case is being referred to the Director of the Minerals Management Service for any action deemed appropriate.

I’ve heard that one inspector is on administrative leave.

During the Bush era, offshore safety and well control statistics markedly improved. That’s either a sign of regulatory success or of an industry that’s serious about making improvement. Ethics investigations rooted out corruption in the management ranks, and the lower echelons of the organization quickly got the message that their (mostly) petty gifts and gratuities would no longer be tolerated.

You are reading this here, and not in the mainstream media, because it is much easier for “professional journalist” to be force-fed the Administration’s narrative than to do a little basic fact-checking.

Cross-posted at VladEnBlog.

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