Big Oil & Conflicts of Interest: Obama Owns This Mess

The Boston Globe - Ken Salazar and President Obama say they will split up the Minerals Management Service to separate the arm that inspects and investigates the oil industry from the arm that last year collected $13 billion in royalties and fees from the industry. Both Obama and Salazar say this will ensure “there is no conflict, real or perceived.’’

Splitting the agency means nothing unless Obama and Salazar revamp the culture of this lazy, conflict-ridden agency that in some years, according to the Wall Street Journal, collects more money than any other federal agency except for the Internal Revenue Service. While the IRS is the subject of national ire every April 15, the minerals agency dutifully conducted its business in unseen labyrinths until BP's deadly Deepwater Horizon explosion and gargantuan oil spill in the Gulf. One of the tragedies is that the Obama administration knew exactly what dysfunction it had on its hands entering office.

In 2006, the Interior Department's inspector general, responding to a Senate committee request and a New York Times report that the minerals agency had undercollected $700 million in gas royalties, said the agency "lacks reliable management information to adequately develop a compliance strategy, monitor progress, and assess results.'' In 2007, Interior inspector general Earl Devaney issued a report that found that the revenue management division of the minerals agency was "fraught with difficulties,'' including: Read more.