September 11, 2008

Government Officials Investigated for Illicit Sex


By Dina Cappiello

The Associated Press


Government officials handling billions of dollars in oil royalties improperly engaged in sex with employees of energy companies they were dealing with and received numerous gifts from them, federal investigators said Wednesday.

The alleged transgressions involve 13 former and current Interior Department employees in Denver and Washington. Their alleged improprieties include rigging contracts, working part time as private oil consultants, and having sexual relationships with - and accepting golf and ski trips and dinners from - oil company employees, according to three reports released Wednesday by the Interior Department's inspector general.

Inspector General Earl Devaney's office spent more than two years and $5.3 million on the investigations.

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.

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, including Chevron, Shell and Hess Corp. , the investigators found.

The reports also said former head of the Denver Royalty-in-Kind office, Gregory W. Smith, used cocaine and had sex with subordinates.

One of the employees named in the investigation, Jimmy Mayberry, has already pleaded guilty in U.S. District Court in Washington to violations of conflict-of-interest laws.

what's being done

Minerals Management Service Director Randall Luthi said the agency was taking the report "extremely seriously" and would review the allegations and weigh taking appropriate action in coming months.

The inspector general is recommending that current employees who are implicated be fired and barred for life from working within the royalty program.

Originally published by BY DINA CAPPIELLO.

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