Legislation to Take Aim at Big Oil's Influence

Press Release

LEGISLATION TO TAKE AIM AT BIG OIL'S INFLUENCE

Lawmakers seeking strict ethics code after government workers caught with close ties to industry

Two U.S. senators today moved to break the close ties between government regulators and the oil industry.

Sens. Robert Menendez (D-NJ) and Bill Nelson (D-FL) announced they're introducing legislation that would dramatically toughen ethics rules for employees of the federal Minerals Management Service, which is at the center of a major corruption scandal over employee relationships with oil companies. The bill is expected to be filed as early as tomorrow.

Three reports released last week by Interior Department investigators revealed widespread corruption and unethical dealings in the agency, including federal employees accepting gifts from oil companies, steering lucrative government contracts toward retiring co-workers and engaging in drug use and sexual activity with representatives of oil companies and with fellow co-workers.

"With two oil men in the White House for the past eight years, parts of the federal government have become wholly-owned subsidiaries of Big Oil," said Menendez. "American families are struggling every day with sky high gas prices while the federal government has been engaged in a wink-wink, hanky-panky relationship with oil companies. As oil companies cheerlead the drill, drill, drill calls, they need to know that their intimate relationship with the federal government is over. With these reforms, we intend to break up the cozy bond that has been allowed to develop for far too long, costing American taxpayers untold amounts of revenue."

""If we need to put on the books - don't take money and drugs from the oil industry - that's what we'll have to do to stop the influence peddling," said Nelson, who also has called for congressional hearings. "The whole sordid affair just shows how much sway big oil holds over the government."

MMS oversees oil company use of federally-leased lands and runs the Royalty-in-Kind program, by which oil companies compensate the federal government for use of public lands with oil and gas, which is then sold on the market. The Government Accountability Office has reported that it is unclear whether the federal government is even receiving adequate royalties from the oil companies in the first place.

Outline of Menendez-Nelson legislation:

Employee Ethical Standards

* Would ban the acceptance of all gifts from the industry. Any gifts that are received will be presumed to be at least an illegal gratuity unless proven otherwise. An illegal gratuity is a felony punishable by 2 years in prison.

* Would increase number of MMS employees required to file public financial disclosure forms and forms revealing past employment. Those who earn incomes at the base level of a GS-13 (currently $82,961) employee or higher will now have to reveal this information (currently, employees compensated at 120% of GS15 level, $138,380 or more, must disclose).

* Would require MMS employees to divest all industry investments before working at MMS (Current law requires employees to recuse themselves from working on a matter specifically having to do with a particular company if they own $15,000 or more in that company's stock).

* Would hold MMS employees under the same standards as federal procurement officials (one year "revolving door" ban extends to all private sector jobs for companies they worked on major deals with while a federal employee and not just "representational activities", such as lobbying).

MMS Review of Practices

* The Royalty-In-Kind Program would be suspended until the following conditions are met:

-MMS conducts a comprehensive review to determine if it has been accurately collecting royalties and reports its findings to Congress.

-MMS conducts a thorough review to ensure that metering equipment properly measures what royalties are owed to the federal government and reports these findings to Congress.

-MMS conducts a robust training program ending with a signed certification that MMS employees understand the ethics laws and regulations.

-MMS creates an ombudsman position that monitors MMS's progress in carrying out its reforms. The ombudsman is hired by and reports exclusively to the DOI IG.

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