“Obviously, we’re all oil industry. We’re all from the same part of the country. Almost all of our inspectors have worked for oil companies out on these platforms. They grew up in the same towns. Some of these people, they’ve been friends with all their life. They’ve been with these people since they were kinds. They’ve hunted together. They fish together. They skeet shoot together. . . . They do this all the time.”
–Minerals Management Service Lake Charles District Manager Larry Williamson, explaining why his employees, the federal regulators of offshore rigs like the Deepwater Horizon, had a pattern of accepting gifts in violation of ethics rules from oil companies.
The technical term is “regulatory capture.” It happens when industry interests overtake the broader public interest in federal agencies charged with protecting the nation. It is too soon to know if slip-shod regulation directly led to the collapse of the Deepwater Horizon rig, and the massive oil spill now filling the Gulf of Mexico. But there is no doubt that the agency charged with inspecting the rigs, the Minerals Management Service, had been captured.
The quote above is one illustration of the problem. In a report released today by Sen. Bill Nelson of Florida, the Inspector General for the Department of the Interior (IG) finds many more reasons to worry. MMS inspectors admit to accepting tickets to Peach Bowl games from industry, attending industry-sponsored skeet shooting competitions gratis, and other benefits, like meals or a digital watch. The IG uncovers one email chain from 2006 between a former MMS inspector an an employee of Conoco Phillips.
The e-mail chain began with the inspector sending the Conoco Phillips employee an e-mail with the subject line, “Civil Penalty Case recaps – 1 quarter 2006.” He stated, “These are the fines that we assessed to different companies for breaking the rules.” The Conoco Phillips employee responded, “[E]ver get bribed for some of that?” He replied, “They try all the time.” The Conoco Phillips employee responded back, “[E]ver take em?” the inspector said, “I accept ‘gifts’ from certain people. But we have VERY strict ethic standards as you could imagine.” The Conoco Phillips employee replied, “[C]ertain people, meaning women?” the inspector said, “No. meaning good friends that I wouldn’t write up anyway.”
