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Interior inspector general expected to fault oil spill probe

By Juliet Eilperin
Thursday, June 17, 2010; A09

Elected officials should consider imposing ethics rules on oil and gas companies that do business with the federal government, the Interior Department's acting inspector general plans to tell the House Natural Resources Committee on Thursday.

Mary L. Kendall will also tell the panel that the Minerals Management Agency, which oversees offshore oil drilling, is probing the BP oil spill in a "completely backwards" way and needs to have its culture revamped. The Washington Post obtained a copy of Kendall's prepared testimony late Wednesday.

"While there is ample opportunity to improve and strengthen the regulations that govern MMS and the industry that extracts valuable resources from federal lands, the greatest challenge in reorganizing and reforming MMS lies with the culture -- both within MMS and within industry," Kendall intends to tell lawmakers.

The agency's inspectors are not only underpaid and inadequately trained but are also faced with having to oversee too many rigs, she says in her prepared testimony. About 60 MMS inspectors oversee 4,000 facilities in the Gulf of Mexico, Kendall notes, while the Pacific Coast has 10 inspectors for 23 facilities. Kendall's testimony was first reported Wednesday by the Wall Street Journal.

Kendall documented improper behavior by MMS offshore regulators in a report last month, and she intends to say that new ethics rules imposed last year by Interior Secretary Ken Salazar address only part of the problem.

"But how do we address the conduct of industry representatives?" the prepared testimony says. "Perhaps it is time to impose some ethics requirements on companies doing business with the government."

Kendall also questioned the approach MMS has applied to investigating the Deepwater Horizon disaster, noting that the agency "is bound by the Coast Guard regulations, which are comprehensive, but in my view, completely backwards, gathering evidence via public hearing, rather than developing evidence to culminate in a public forum."

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