For Immediate Release

Interior Ethics Scandals Involve More Than 'A Few'

Widespread Industry Penetration of Interior Tatters Kempthorne Ethics Vows

WASHINGTON - This week's Inspector General report on the oil industry plying U.S. Interior Department employees with sex and drugs and describing "a culture of ethical failure" belies last year's pledge by Interior Secretary Dirk Kempthorne to transform his scandal-ridden agency into "a model of an ethical workplace." Industry-fed impropriety within Interior extends far beyond the oil royalty-in-kind program to reach the upper echelons of agency decision-making on a range of issues, according to Public Employees for Environmental Responsibility (PEER).

"Today's Interior Department makes Teapot Dome look good," stated PEER Executive Director Jeff Ruch, referring to the 1920's scandal where federal oil interests were handed over to political cronies without competitive bidding in return for questionable favors. "Sex and drugs are only symptoms of a far deeper corruption plaguing Interior."

In recent months, Interior has been engulfed by waves of corporate-related scandals, including -

  • The imprisonment of former Deputy Secretary Stephen Griles for obstructing inquiries into influence peddling at Interior by convicted former lobbyist Jack Abramoff;
  • Resignation of Deputy Assistant Secretary Julie MacDonald for rewriting scientific works in collusion with business lobbyists; and
  • The loss of billions of dollars to the Treasury from royalty-free sweetheart off-shore drilling leases in the Gulf of Mexico.

In a statement yesterday, Secretary Kempthorne insisted that ethical problems were an aberration: "the conduct of a few has cast a shadow on an entire agency." This suggestion that problems are isolated to this one program is highly questionable in that--

  • Bonuses to Culprits. The top official named by the Inspector General recently received top Interior departmental awards. Similarly, Julie MacDonald received bonuses approved by now- Deputy Secretary Lynn Scarlett just weeks before her resignation;
  • Revolving Door. A parade of top Interior officials, including former Secretary Gale Norton, have left the Bush administration to go directly to work for the oil industry; and

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  • Industry Domination. Interior officials are pressured to facilitate industry plans, particularly in oil-related programs. In the latest Inspector General Report, one worker went so far as to say his job was to be "part of the industry."

Kempthorne was not the only official seeking to minimize concerns. Randall Luthi, Director of the Minerals Management Service which oversees the royalty-in-kind program, argued this week that "I do not believe Americans have lost financially," but conceded that "it is too early to tell" what financial favors were given to the industry at taxpayer expense.

"Of course these oil companies thought they would benefit from lavishing favors on federal workers who were supposed to be minding the public till," Ruch added. "Randall Luthi is part of the problem and should be fired."

As Interior Secretary, Kempthorne said that ethics would be one of his top priorities. In June 2007, he unveiled a vaunted "10-point plan" on ethics that was notable for how little it actually did. Some aspects of the plan remain a secret, as Interior has refused to release documents detailing which "best ethics practices" it would adopt, in response to a Freedom of Information Act request by PEER. During the ensuing months, Kempthorne has made no further ethics pronouncements.


Revisit the imploding Interior ethics initiative

Look at coziness with oil industry on Arctic drilling plans

View Secretary Kempthorne statement on oil royalty scandal



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