Sex, drugs and oil: corruption scandal rocks US gov't agency

WASHINGTON: US Department of the Interior employees who handled billions of dollars in oil contracts improperly engaged in sex with energy company employees, a report said.

The report drafted by the department's inspector general Earl Devaney deplored "a culture of ethical failure" and said the investigation uncovered a "culture of substance abuse and promiscuity."

The alleged misconduct involve at least 13 current and former employees of the department's Minerals Management Service (MMS) accused of rigging contracts and accepting gifts and engaging in "illicit sexual encounters" with subordinates and industry representatives, Devaney said on Wednesday.

One of the accused has already pled guilty to a criminal charge, the report released on Wednesday said.

Following a two-year, five-million-dollar investigation which included testimony from 233 witnesses and 470,000 pages of documentation, Devaney said the inquiry "revealed... a pervasive culture of exclusivity, exempt from the rules that govern all other employees of the federal government."

Between 2002 and 2006, nearly one-third of the MMS staff -- in Washington and the western city of Denver -- received gifts and gratuities from energy companies.

Two of the accused received gifts including dinners, tickets to various shows, and golf outings "on at least 135 occasions from four major oil and gas companies with whom they were doing business," according to Devaney.

US federal employees are forbidden from receiving gifts valued above 20 dollars.

The explosive accusations focus on the MMS's Royalty in Kind program, which manages commercial oil and gas sales activity and barters that oil and gas to the government in lieu of payments for drilling on federally-owned offshore lands.