[Congressional Record Volume 154, Number 151 (Tuesday, September 23, 2008)]
[Senate]
[Pages S9282-S9283]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MENENDEZ (for himself and Mr. Nelson of Florida):
  S. 3543. A bill to improve the administration of the Minerals 
Management Service, and for other purposes; to the Committee on Energy 
and Natural Resources.
  Mr. MENENDEZ. Mr. President, I have come to the floor today to 
introduce legislation intended to bring much needed reform to the 
Minerals Management Service. After recent reports of the widespread 
corruption at the agency, I came together with my colleague Senator 
Nelson from Florida to work on legislative solutions that will address 
the complete and total lack of ethics at this agency. I would also like 
to take this time to thank Senator Nelson for his outstanding work on 
this bill. I know there are few people out there that show as much 
dedication and clear vision on this issue as he does.
  The cries of Drill! Drill! Drill! have reached a fevered pitch and 
proponents of drilling say that a profitable relationship between the 
Government and the oil industry will benefit everyone involved.
  However, as we have recently learned from reports released by the 
Department of Interior Inspector General's Office, the influence of Big 
Oil corrupts absolutely. Honestly, we have been learning that lesson 
over and over again since we sent an oil man to the White House. The 
influence of Big Oil has led us to make policy decisions that are 
diametrically opposed to the best interests of this country. With 
barrels of Big Oil lobbying money, this administration has led us all 
head first into policies that benefit Big Oil and almost no one else. 
We are more addicted to oil than ever before and we continue with this 
addiction to the detriment of our economy, our energy infrastructure, 
our environment, and even our national security.
  Once Big Oil is involved, it is as if all reason flies out the 
window. Nowhere has this become clearer than at the Minerals Management 
Service. The most recent reports from the Inspector General's office 
describe corruption at MMS on a level difficult to believe. The 
descriptions of drug use and sexual activity between oil company 
representatives and MMS employees are not suitable for network 
television, much less the floor of the United States Senate. This is 
the agency tasked with leasing Federal lands to oil companies and 
ensuring the adequate compensation of such leasing and yet their 
employees behaved like oil company lackeys with complete disregard for 
the interests of the American taxpayer.
  I am sure no one is surprised by the increased influence of the oil 
industry since we elected a former oil man to the White House, but this 
is truly beyond the pale. The Inspector General's report concludes that 
MMS is plagued by ``a culture of ethical failure.'' This is an agency 
where conflict of interest is not only the norm, but where officials do 
not think the rules even apply to them. This is an agency with a 
complete free-for-all atmosphere where employees go on golf and ski 
outings, concerts, and sporting events all paid for by oil executives. 
This is an agency whose culture is ``devoid of both ethical standards 
and internal controls'' where officials are LITERALLY and figuratively 
in bed with industry.

[[Page S9283]]

  This is the agency that we want to trust with our shorelines. This is 
the agency we want to trust to lease thousands of miles of our beaches 
to the oil industry and then collect compensation for use of that 
public land--OUR LAND--with oil and gas. The Government Accountability 
Office has already released reports that concluded that MMS has no idea 
if they are collecting the right amount of oil through the Royalty-in-
Kind program. Not only that, but the agency has refused to institute 
the reforms recommended by GAO in order to collect the correct amount 
of compensation from the oil industry. Of course, considering the 
Inspector General's report, their lack of reform is not surprising as 
they were too busy living the high life on the oil industry's dime.
  This agency is clearly in desperate need of regulation. If the 
officials at MMS believe that the rules do not apply to them, then 
clearly we need tougher rules. That is why I rise today with my 
colleague Senator Nelson from Florida to introduce legislation that 
will dramatically toughen the ethics rules for employees at the 
Minerals Management Service.
  First, this legislation holds MMS employees to the same standards as 
federal procurement officials and addresses the revolving door between 
the agency and industry. There would be a one year ban on agency 
employees taking any private sector job for companies the 
employee worked with while a federal employee. This means ANY job, not 
just ``representational activities'' such as lobbying. Any real first 
crack at reform has to be stopping this revolving door.

  Second, this legislation requires that MMS employees divest all 
industry investments before working at MMS. Currently, the law only 
requires that employees recuse themselves from working on a matter 
specifically having to do with a particular company in which they have 
a financial stake. Needless to say, trusting MMS employees who believe 
the rules do not apply to them and that the agency is here to serve the 
needs of industry seems unrealistic at best and downright dangerous at 
worst.
  Third, we would increase the 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 G-13 employee or higher 
will now have to reveal this information.
  Currently, only employees compensated at 120 percent of GS15 level or 
more must disclose. However, as this report makes clear, the extreme 
influence of industry on the agency means that employees beyond merely 
the top officials need to be held to a higher standard of objectivity.
  Of course, as I mentioned, the issues at MMS do not end with the 
ethical standards, or lack thereof, among agency employees. The 
Royalty-In-Kind Program is broken and the Federal Government is not 
being compensated for the leasing of land to the oil industry. This 
program is part of the second largest source of revenue for the Federal 
Government, yet it currently operates on what basically amounts to an 
honor system. We are supposed to trust the oil companies to pay the 
right amount and for the employees to see that the Government receives 
compensation.
  Therefore, our legislation would suspend the Royalty-In-Kind program 
until the following conditions are met. First, the MMS must conduct a 
comprehensive review to determine if it has been accurately collecting 
royalties and report its finding to Congress. We all know the oil 
industry is flush with cash, so there is absolutely no excuse for them 
to use OUR LAND to make a profit and not pay for it.
  Second, the MMS must conduct a thorough review to ensure that 
metering equipment properly measure what royalties are owed to the 
Federal Government and report those findings to Congress. In addition, 
they will be required to perform no less than 550 audits of oil and gas 
leases each fiscal year to assure adequate royalties are being 
collected. There needs to be a real process in place to ensure adequate 
compensation.
  Third, they must also have a robust training program for their 
employees ending with a signed certification that MMS employees 
understand ethics laws and regulations. It needs to be abundantly clear 
to all agency employees and officials that no matter who is in the 
White House the rules most definitely apply to them.
  Last, the MMS must create a position for an ombudsman that will 
monitor the agency's progress in carrying out all these reforms. This 
ombudsman must be hired by and report exclusively to the Department of 
Interior Inspector General's office because there must be an objective 
outside source to protect us from this type of corruption happening 
again. The Inspector General will also be tasked with determining 
whether the Royalty-In-Kind program is even saving the taxpayers money 
at all.
  Clearly, some type of reform at MMS is desperately needed. I believe 
the bill Senator Nelson and I are introducing will go a long way 
towards addressing these concerns. No matter what, I do not see how we 
can in good conscience open up thousands of miles of our precious 
coastlines to the oil industry without being able to trust the agency 
tasked with protecting our interests.
  Mr. NELSON of Florida. Mr. President, today Senator Robert Menendez 
and I filed legislation that would address the morass of ethical 
problems that have besieged the Minerals Management Service, MMS.
  I have warned publicly that we could not trust the oil companies that 
want to drill in the waters off our most protected coastlines nor could 
we trust the Federal watchdogs charged with keeping a watchful eye over 
them. We have seen proof in report after report detailing 
mismanagement, a lack of control, and inappropriate, even possibly 
criminal, behavior.
  I have voiced serious doubts about the integrity and cost 
effectiveness of this Royalty-In-Kind program, where oil companies pay 
the Federal Government with mineral, oil, or gas they produce on public 
lands, rather than cash. This program was authorized in the 2005 Energy 
bill, which I opposed for many reasons.
  The bill that we introduced today seeks to restore integrity in 
managing our offshore energy resources.
  Specifically, our bill requires employees of the Minerals Management 
Service to adhere to the same ethical guidelines that other Federal 
employees abide by. This means no gifts from industry, the filing of 
financial disclosure forms for some higher level employees, and the 
divestment of all industry investments before working at MMS.
  The bill suspends the scandal-plagued Royalty-in-Kind program until 
these conditions are met. Additionally, MMS must review the accuracy of 
its royalty collection program with an independent watchdog to monitor 
its progress. Finally, MMS is required to conduct extensive audits of 
the Royalty-In-Kind program to ensure the government is receiving fair 
compensation for use of public lands.
  Offshore drilling will not solve our energy crisis nor will it bring 
down prices at the pump. Instead, it will only serve to further enrich 
the oil companies and reward the culture of corruption that has been 
fostered, funded, and now exposed at the Department of the Interior. I 
hope the Senate will consider our legislation expeditiously.
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