Corruption found in U.S. agency responsible for oil royalties

Articles — By forcechange on September 12, 2008 9:43 am

We hear a lot about the widespread corruption and distorted interests that invariably go along with countries that are major producers of oil.  Some of most notorious of these “petro-states” are Russia, Venezuela, and countries throughout the Middle East.  The petro-state argument states that because these nations are able to acquire great wealth by merely sticking a drill in the ground, there is less of an incentive to innovate, and the massive in-flow of cash from this process creates an atmosphere ripe for corruption and self-dealing. 

Apparently, these corrupting forces and conflicting interests are not limited to just countries whose economies are built upon oil.  A U.S. Department of the Interior report by its inspector general, found that employees of the Minerals Management Service, which is responsible for collecting about $10 billion in royalties owed to the country from gas companies each year, were engaged in widespread misconduct and corruption. 

Some of the accusations of misconduct in the report include:  permitting oil companies to revise their bids downward after winning contracts, disclosing confidential information, engaging in sexual relationships with oil company contacts, and accepting improper gifts.

While the wrongful actions of these employees were on a much smaller scale than that seen in petro-states, the fact that such rampant corruption could exist over an extended period of time inside a U.S. agency responsible for one of the largest portions of governmental revenue, after taxes, is quite disturbing.  It reflects both a lack of oversight by higher ups in the executive branch, as well as the inherent dangers that are always present in the oil business where there is so much money to be made by those involved.