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REUTEMAN: Criminal review of scandal-ridden agency an easy call for Salazar
Published January 31, 2009 at 12:05 a.m.
Announcing a criminal review this week of the sex-drugs-oil scandal at a federal agency in Lakewood may be one of the easiest calls Ken Salazar gets to make as Interior secretary.
After all, the sordid details were outrageous, corrupt and at least borderline criminal. The potential for losses to taxpayers was addressed but never definitively answered.
The Bush-Cheney Justice Department declined to bring charges against two managers the inspector general recommended be prosecuted. The IG, Earl Devaney, even told a congressional committee in September, "I would have liked a more aggressive approach, and I would have liked to have seen some other people prosecuted here."
With Salazar and his new chief of staff, Tom Strickland, I'm guessing Devaney will get his wish. Salazar, Colorado's attorney general before being elected U.S. senator four years ago, spent time with the Rocky's editorial board Thursday afternoon. Strickland, former U.S. attorney for Colorado, accompanied him. Prior to visiting us, they held a news conference at the federal center, calling for a fresh look at the scandal. He also announced a new code of ethics for Interior employees.
To recap, Devaney issued three reports in September about 13 former and current employees at the Minerals Management Service housed at the Lakewood Federal Center. MMS employees collect oil and gas royalty payments from the firms that extract them, to the tune of $23 billion last year. They also administer something called the Royalty In Kind program, in which firms can pay their royalties in oil and gas rather than cash.
Devaney conducted a two-year probe, costing $5.3 million. Among other things he found that MMS employees "frequently consumed alcohol at industry functions, had used cocaine and marijuana and had sexual relationships with oil and gas company representatives."
The jury is still out on whether or not taxpayers lost money because of the conduct of the MMS employees, Salazar said.
"Unless you count the $5 million Devaney spent on his investigation," Strickland interjected.
Devaney's reports did allege that MMS employees rigged contracts, worked part time as private oil consultants and accepted ski and golf trips and dinners from oil and gas executives in addition to having sex with them. One would reasonably expect we got fleeced in the process.
The scandal's poster boy was Greg Smith, who ran the Denver office of RIK program. The laundry list of allegations against him includes coercing subordinates into sex, doing cocaine and methamphetamine with a subordinate, suggesting that employees lie to investigators and marketing a private company's services while on the job for Uncle Sam. Justice declined to prosecute Smith, who retired in 2007.
Interior became a scandal-ridden department, Salazar said at the Rocky. Earlier, he had announced that Strickland will head the new review.
"We are going to look at what Justice did in deciding not to prosecute," Salazar said. "They may have had their reasons, but we will review them and get this sad chapter behind us. Given the seriousness of the findings of the inspector general, I want to make sure that those who blatantly flaunted the law receive the appropriate sanction."
Salazar did not name Smith but said, "The person in charge of 65 people in the Royalty In Kind program introduced drugs into the workplace and conducted sexual activities with subordinates. By the end of the day, we will ensure that everything from a criminal angle has been done. We will provide integrity to the country."
"Interior's public image suffered," Salazar added. "It became the best example of scandal in government."
I chatted with Salazar a bit once our meeting had broken up. "This Lakewood scandal must be like a big fat pitch across the middle of the plate for you," I said. "In a sense, it's easy for you, in your first week on the job, to come out here and hit this one out of the park."
"That's true," he said.
"It's not likely anything else in your new job will be this easy," I said.
"That's true, too," he said.
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