[Advisory Report on the Criminal Referral Process, Offshore Civil/Criminal Penalties Program, Minerals Management Service]
[From the U.S. Government Printing Office, www.gpo.gov]
Report No. 00-i-243
Title: Advisory Report on the Criminal Referral Process, Offshore
Civil/Criminal Penalties Program, Minerals Management Service
Date: February 23, 2000
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U.S. Department of the Interior
Office of Inspector General
ADVISORY REPORT
CRIMINAL REFERRAL PROCESS,
OFFSHORE CIVIL/CRIMINAL
PENALTIES PROGRAM,
MINERALS MANAGEMENT SERVICE
REPORT NO. 00-I-243
FEBRUARY 2000
EXECUTIVE SUMMARY
Criminal Referral Process,
Offshore Civil/Criminal Penalties Program,
Minerals Management Service (No. 00-i-243)
BACKGROUND
The Minerals Management Service's Offshore Minerals Management
Program conducts leasing activities for and provides oversight of
mineral operations on the Nation's Outer Continental Shelf. The
Offshore Program is responsible for all phases of offshore oil
and gas activity, including the regulation of all exploration,
development, and production activities on more than 7,100 active
leases. Service inspectors perform inspections of Outer
Continental Shelf facilities to ensure that operators of oil and
gas platforms comply with Service regulations and terms of the
leases, rights-of-way, licenses, and permits. The inspections
include monitoring offshore production and drilling operations
and testing safety and pollution prevention equipment, which
prevents or minimizes the effects of well blowouts, fires, oil
spills, and other major accidents. Criminal violations of
offshore operations are addressed in Section 24(c) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1350c). The Service's OCS
(Outer Continental Shelf) Civil/Criminal Penalties Program policy
document dated January 1996, which incorporates the Service's
"OCS Civil/Criminal Penalties Program Policy and Procedures
Guidebook," dated December 1992, provides guidelines on
violations that should be referred to the Office of Inspector
General for potential criminal violations. The Service revised
its "Guidebook" on May12, 1999, after our fieldwork was
completed. For fiscal years 1993 through 1998, the Service made
18 criminal referrals to the Office of Inspector General, of
which 3 referrals were accepted by the Department of Justice and
resulted in one criminal prosecution and two civil settlements.
OBJECTIVE
The objective of the audit was to determine whether the Service's
process was effective in ensuring that criminal violations of
statutes and regulations that provide for safe and
environmentally sound offshore oil and gas operations were
referred to the Office of Inspector General when appropriate.
Specifically, we determined whether (1) the Service made criminal
referrals when required and (2) the coordination between the
Service and the Office of Inspector General was adequate to
ensure the effective and timely pursuit of criminal referrals by
the Office of Inspector General. The audit was performed at the
request of the Minerals Management Service.
RESULTS IN BRIEF
We found that the Minerals Management Service's offshore criminal
referral process did not ensure that potential criminal
violations by offshore oil and gas operators were referred to the
Office of Inspector General for review. In addition, the Office
of Inspector General did not timely communicate the status of
referred cases to the Service. Specifically, potential criminal
cases that constituted a threat of serious, irreparable, or
immediate harm or damage to life, property, and the environment
were not referred to the Office of Inspector General for review.
Section 24(c) of the Outer Continental Land Shelf Lands Act
defines a criminal violation as a "knowing and willful" act that
is a violation of the provisions of the Act or the falsification
of documents filed under the Act. The Inspector General Act
defines a primary objective of the Inspector General as providing
leadership and coordination and recommending policies for
activities designed to prevent and detect fraud and abuse in
programs of agencies of the executive branch of the Federal
Government. These deficiencies occurred, however, because of
inadequate communication between the Service and the Office of
Inspector General. Specifically, only 18 suspected criminal
violations have been referred since enactment of the Oil
Pollution Act of 1990, which resulted in one criminal prosecution
and two civil settlements by the Department of Justice. As a
result, criminal prosecutions have not been used effectively as a
deterrent to violators to ensure safe and environmentally sound
offshore oil and gas operations, and potential violations of a
criminal nature have not been fully evaluated for prosecutorial
merit.
RECOMMENDATIONS
We recommended that the Director, Minerals Management Service,
and the Assistant Inspector General for Investigations jointly
establish more specific guidelines to distinguish cases meriting
criminal investigation and provide training, on the guidance
subsequently developed, to personnel of the Service's Outer
Continental Shelf involved in the criminal referral process. We
further recommended that the Assistant Inspector General for
Investigations timely notify the Service on the status and
disposition of cases referred.
AUDITEE COMMENTS AND OIG EVALUATION
Both the Service and the Assistant Inspector General for
Investigations concurred with the report's three recommendations.
Based on the responses and subsequent communications, we
considered all of the recommendations resolved but not
implemented. Accordingly, the recommendations will be referred
to the Assistant Secretary for Policy, Management and Budget for
tracking of implementation. Since the report's recommendations
are considered resolved, no further response to the Office of
Inspector General is required.
C-IN-MMS-004-98
ADVISORY REPORT
Memorandum
To: Assistant Secretary for Land and Minerals Management
Assistant Inspector General for Investigations,
Office of Inspector General
From: Robert J. Williams
Assistant Inspector General for Audits
Subject: Advisory Report on the Criminal Referral Process,
Offshore Civil/Criminal Penalties Program, Minerals
Management Service (No. 00-i-243)
INTRODUCTION
This report presents the results of our audit of the criminal
referral process of the Minerals Management Service's offshore
civil/criminal penalties program. The objective of the audit was
to determine whether the Service's process was effective in
ensuring that criminal violations of statutes and regulations
that provide for safe and environmentally sound offshore oil and
gas operations were referred to the Office of Inspector General
when appropriate. Specifically, we determined whether (1) the
Service made criminal referrals when required and (2) the
coordination between the Service and the Office of Inspector
General was adequate to ensure the effective and timely pursuit
of criminal referrals by the Office of Inspector General. The
audit was performed at the request of the Minerals Management
Service. This is the second of two reports on the Service's
offshore civil/criminal penalties program. The first report (No.
99-I-374) addressed the Service's civil penalties program and was
issued in March 1999.
BACKGROUND
The Minerals Management Service administers two programs to
accomplish its mission: the Royalty Management Program and the
Offshore Minerals Management Program. All mineral revenue
functions are centralized within the Royalty Management Program,
which collects, accounts for, and distributes revenues generated
from Federal and Indian lands and the Outer Continental Shelf.
The Service's Offshore Minerals Management Program conducts
leasing activities for and provides oversight of mineral
operations on the Nation's Outer Continental Shelf. The
headquarters for the Offshore Minerals Management Program is in
Washington, D.C., and regional offices are in Anchorage, Alaska;
Camarillo, California; and New Orleans, Louisiana. The Offshore
Program is responsible for all phases of offshore oil and gas
activity, including the regulation of all exploration,
development, and production activities on more than 7,100 active
leases.
The Service's Outer Continental Shelf regional offices provide
support and guidance to district offices that are located within
each region. Service inspectors from the district offices
perform inspections of Outer Continental Shelf facilities to
ensure that operators of oil and gas platforms comply with
Service regulations and terms of the leases, rights-of-way,
licenses, and permits. As of September 30, 1998, the Service had
56 inspectors in the Gulf of Mexico Region and 8 inspectors in
the Pacific Region. There were no inspectors in the Alaska
Region because there were no offshore oil and gas operations at
that time. The 64 inspectors were responsible for conducting
on-site inspections of more than 3,800 platforms and
approximately 15,000 oil and gas wells on the 7,100 active
leases. The inspections included monitoring offshore production
and drilling operations and testing safety and pollution
prevention equipment, which prevents or minimizes the effects of
well blowouts, fires, oil spills, and other major accidents.
When Service inspectors find violations of the regulations, they
issue Incidents of Noncompliance to the operator of the facility.
The Service has developed a list of potential Incidents of
Noncompliance that identifies approximately 600 potential
violations.
Criminal violations of offshore operations are addressed in
Section 24(c) of the Outer Continental Shelf Lands Act (43 U.S.C.
1350c). The Service's OCS (Outer Continental Shelf)
Civil/Criminal Penalties Program policy document dated January
1996, which incorporates the Service's "OCS Civil/Criminal
Penalties Program Policy and Procedures Guidebook," dated
December 1992, provides guidelines on violations that should be
referred for potential criminal violations. The Service revised
its "Guidebook" on May12, 1999, after our fieldwork was
completed. Chapter 4 of the revised "Guidebook" states:
Criminal violations are covered under Section 24(c) of the OCSLA
[Outer Continental Shelf Lands Act] (43 U.S.C. 1350(c)). The
dividing line between civil and criminal violations may be very
fine, because the key to determining whether or a not a violation
is criminal depends on whether or not it was "knowing and
willful." It is important to note that a criminal penalty
proceeding does not preclude the imposition of a civil penalty.
In most instances, civil penalty cases should be initiated
concurrently. Criminal violations are those that are knowing and
willful and may include:
-Violation of any provision of the OCSLA, any lease term,
license, or permit pursuant to the Act, or any regulation or
order issued under the Act designed to protect health, safety, or
the environment or to conserve natural resources;
-Any false statement, representation, or certification in any
application, record, report, or other document filed or required
to be maintained under the Act;
-Falsifying, tampering with, or rendering inaccurate any
monitoring device or method of record required to be maintained
under the Act; and
-A revelation of any data or information required to be kept
confidential by the Act.
The Solicitor's Office assists the Service in determining which
cases appear to be of a criminal nature that should be referred
to the Office of Inspector General for Investigations and assists
the Service in preparing the necessary documentation for
forwarding to the Office of Inspector General.
The Inspector General Act defines the primary purpose of the
Inspector General as follows:
(1) to conduct and supervise audits and investigations relating
to programs and operations of the Departments;
(2) to provide leadership and coordination and recommend policies
for activities designed (A) to promote economy, efficiency, and
effectiveness in the administration of, and (B) to prevent and
detect fraud and abuse in, such programs and operations; and
(3) to provide a means for keeping the head of the establishment
and the Congress fully and currently informed about problems and
deficiencies relating to the administration of such programs and
operations and the necessity for and progress of corrective
action.
The Office of Inspector General conducts investigations based on
information received from a variety of sources, including the
U.S. Congress, Departmental officials and employees (including
referrals from the Minerals Management Service), other Federal
agencies, Office of Inspector General audits, the general public,
anonymous sources, the Office of Inspector General Hotline, and a
"Fraud Awareness" initiative.
For fiscal years 1993 through 1998, the Service had 229 civil
penalty case files referred to the reviewing officers, which
consisted of 221 case files in the Gulf of Mexico Region Office
and 8 case files in the Pacific Region Office. Also during this
time frame, the Service made 18 criminal referrals to the Office
of Inspector General, of which 3 referrals were accepted by the
Department of Justice and resulted in one criminal prosecution
and two civil settlements.
SCOPE
Our audit was conducted in accordance with the "Government
Auditing Standards," issued by the Comptroller General of the
United States. Accordingly, we included such tests of records
and other auditing procedures that were considered necessary
under the circumstances. As part of our audit, we reviewed the
Departmental Report on Accountability for fiscal year 1998,
which includes information required by the Federal Managers'
Financial Integrity Act of 1982, and the Service's annual
assurance statement on management controls for fiscal year 1998
to determine whether any reported weaknesses were within the
objective and scope of our review. We found that no material
weaknesses within the objective and scope of our review were
reported by the Service. Our fieldwork, which was performed at
the Service's Offshore Gulf of Mexico Region Office in New
Orleans, Louisiana, and its Offshore Pacific Region Office in
Camarillo, California, included discussions with the Service's
National Outer Continental Shelf Civil/Criminal Penalties Program
Coordinator in Herndon, Virginia.
To accomplish our objective, we reviewed the Service's "OCS
Civil/Criminal Penalties Program Policy and Procedures
Guidebook," dated December 1992, and the current version of the
"Guidebook," issued on May 12, 1999, as well as the Service's
Outer Continental Shelf Civil/Criminal Penalties Program Policy
document dated January 1996. We also conducted interviews with
the Service's inspectors, reviewing officers, district
supervisors, regional supervisors, and a Service penalty
coordinator; an Office of the Solicitor attorney; Office of
Inspector General investigators; and Department of Justice
attorneys. The data obtained during these interviews were
analyzed and summarized to support conclusions in the Results of
Review section of this report. In addition, we judgmentally
selected and reviewed 28 civil penalty case files (22 from the
Gulf of Mexico Region and 6 from the Pacific Region) based
primarily on the operators' history of noncompliance and the
types of violations to determine whether any of the cases
contained potential criminal violations and should therefore have
been referred to the Office of Inspector General. We also
reviewed Office of Inspector General Outer Continental Shelf
criminal cases referred by the Service.
As part of our review, we evaluated the system of internal
controls related to criminal referrals to the extent we
considered necessary to accomplish our objective. The internal
control weaknesses we found are discussed in the Results of
Review section of this report. Our recommendations, if
implemented, should improve the internal controls in these areas.
PRIOR REVIEWS
Neither the Office of Inspector General nor the General
Accounting Office has issued any reports during the past 5 years
on the Service's Outer Continental Shelf criminal penalties
program. However, the Office of Inspector General, in March
1999, issued the report "Offshore Civil Penalties Program,
Minerals Management Service" (No. 99-I-374). The report stated
that reviewing officers did not adequately document penalty
assessment decisions and that case files were not reviewed by a
supervisor to ensure that documentation requirements were met.
In addition, the report stated that inspectors did not always
make referrals for civil penalties when appropriate or make
referrals in a timely manner. The report contained
recommendations for the Director, Minerals Management Service, to
(1) ensure that reviewing officers document all conclusions for
determining the category of violations and any mitigating factors
that were considered in arriving at assessed amounts of
penalties, (2) institute supervisory or peer reviews to ensure
that civil penalty assessments are adequately documented, (3)
ensure that inspectors receive training in determining when
violations should be referred for civil penalties and in
sufficiently documenting the violations on the Incidents of
Noncompliance, and (4) direct Service managers to provide
sufficient support to inspectors to ensure that appropriate
violations are referred for civil penalties. The Service
concurred with the four recommendations.
RESULTS OF REVIEW
The Minerals Management Service's offshore criminal referral
process did not ensure that potential criminal violations by
offshore oil and gas operators were referred to the Office of
Inspector General for review. In addition, the Office of
Inspector General did not timely communicate the status of cases
referred to the Service. Specifically, potential criminal cases
that constituted a threat of serious, irreparable, or immediate
harm or damage to life, property, and the environment were not
referred to the Office of Inspector General for review. Section
24(c) of the Outer Continental Land Shelf Lands Act defines a
criminal violation as a "knowing and willful" act that is a
violation of the provisions of the Act or the falsification of
documents filed under the Act. The Inspector General Act defines
a primary objective of the Inspector General as providing
leadership and coordination and recommending policies for
activities designed to prevent and detect fraud and abuse in
programs of agencies of the executive branch of the Federal
Government. However, criminal cases were not referred to the
Office of Inspector General because the Office of Inspector
General did not provide sufficient guidance and training to
Service inspectors and reviewing officers regarding the types of
violations and circumstances that should be referred to the
Office of Inspector General and the Service's case files did not
have sufficient documentation to determine whether a case
contained potential criminal violations and should have been
referred to the Office of Inspector General. There have been
only 18 referrals of suspected criminal violations since
enactment of the Oil Pollution Act of 1990, which resulted in one
criminal prosecution and two civil settlements by the Department
of Justice. As a result, criminal prosecutions have not been
used effectively as a deterrent to violators to ensure safe and
environmentally sound offshore oil and gas operations, and
potential violations of a criminal nature are not fully evaluated
for prosecutorial merit.
Criminal Referral Process
As of September 30, 1998, the Minerals Management Service had
229 civil penalty cases, of which only 18 criminal cases were
referred to the Office of Inspector General. We judgmentally
selected 28 (which excluded the 18 criminal cases that were
referred to the Office of Inspector General) of the Service's 229
civil penalty cases to determine whether any of these cases
should have been referred criminally to the Office of Inspector
General. Our selection was based on the types of violations,
provided by Service inspectors, that (1) might be the result of
a knowing and willful act, including operator history of
noncompliance, and (2) represented potential or actual harm to
the Government or the environment. Of the 28 cases reviewed, we
found, in consultation with Office of Inspector General
investigators, that 3 cases should have been referred to the
Office of Inspector General for criminal investigation. Further,
we found that another 8 of the 28 cases did not have sufficient
documentation to make a determination as to whether a criminal
referral would have been appropriate. The lack of documentation
in civil penalty case files was also cited as a program
deficiency in our March 1999 audit report on civil penalties (see
Prior Reviews section of this report). For the remaining 17
cases, we concurred with the Service that a criminal referral was
not warranted. Details of the three civil penalty cases that
were not referred from our sample are as follows:
-In the first case, an operator was cited for not having a gas
detection system installed on a classified building. The
Service's citation stated that "without a gas detection system
or adequate ventilation, an explosion or catastrophic event could
have occurred resulting in damage to the facility, environment,
and/or loss of life." Although the operator's written response to
the violation indicated that a vent had been installed in the
building, the followup inspection by Service personnel found that
the vent had not been installed. Therefore, in accordance with
the 1992 and the 1999 versions of the Service's "Guidebook," the
case should have been referred to the Office of Inspector General
for review to determine whether a "criminal violation," for
example, "any false statement," had occurred.
-In the second case, an operator was cited for taking 27 safety
devices out of service so that platform operations would continue
rather than be shut down. These devices were intended to prevent
or minimize the effects of well blowouts, fires, spillage, and
other major accidents. The final decision of the Service's
reviewing officer stated, "The inspection revealed that safety
devices were blocked out of service at the main control panel.
The inspection further revealed that the devices were not flagged
nor were the functions of the devices being monitored." The
Service prepared a Compliance Review Form that included the
following narrative:
In other words, all the required safety devices of all wells and
production equipment on this platform were in bypass and would
not have shut-in any wells or production equipment had an upset
or catastrophic event occurred during the time the platform
safety system was in bypass. The bypass of the safety system was
not due to start up, testing or maintenance, and the safety
system was not monitored at the time the violation was detected.
According to the Assistant Inspector General for Investigations,
this case should have been referred to the Office of Inspector
General for review because of the number of safety devices that
were taken out of service and the potential safety hazards.
-In the third case, an operator was issued eight Incidents of
Noncompliance for bypassing safety devices and for an accident
that resulted in an oil spill. Operator error in mechanically
bypassing a safety system and the final shutdown device was
listed as the cause of the accident. One violation involved a
well that produced for 32 days, even though it did not have a
subsurface safety valve installed. If an accident had occurred
on the platform, the potential existed for significant
environmental damage. The Service, in the Accident Investigation
Report, identified the cause of the accident as follows: "the
operator was producing into bad oil tank in attempts to maintain
production, thereby maintaining an abnormally high level of oil
in a bad oil tank." Because the operator continued to operate
the oil well for 32 days, we believe that the case should have
been referred to the Office of Inspector General for review to
determine whether the safety device was intentionally bypassed.
Criminal referrals were not made because guidance and training to
Minerals Management Service inspectors and reviewing officers
were inadequate and documentation in the Service's case files was
insufficient to make a determination as to whether a criminal
referral was warranted.
Chapter 4 of the revised "Guidebook" provides procedures for its
personnel to follow when a potential criminal violation occurs.
The "Guidebook" states:
If any MMS [Minerals Management Service] employee has reason to
believe that a violation of the criminal statutes has occurred,
that employee is to immediately report such a violation to an
appropriate authority. Every employee has the right to directly
(anonymously if preferred) contact the Office of Inspector
General using the IG Hotline . . . .
In criminal matters, the National OCS [Outer Continental Shelf]
Civil/Criminal Penalties Program Coordinator will work closely
with the Office of the Inspector General (OIG) and the Office of
the Solicitor (SOL). In some cases, criminal investigations may
be initiated outside of official MMS channels. In those
instances, the OIG, when appropriate, will notify MMS and the
Solicitor's office of the initiation of a criminal investigation.
Concurrent Civil and Criminal Penalty Cases. When MMS has
requested an investigation of possible criminal violations by the
OIG, the MMS should proceed with civil penalty cases to the point
of forwarding the case to a Reviewing Officer, at which time the
civil penalty case should be put on hold pending a review of the
matter by the National OCS Civil/Criminal Penalties Program
Coordinator, the OIG, the Solicitor, and the U.S. Attorney's
office. The Regional OCS Civil/Criminal Penalties Program
Coordinator should not advise the violator of the proposed civil
penalty proceedings until advised to by the National OCS
Civil/Criminal Penalties Program Coordinator. In cases where the
criminal investigation is prompted by an anonymous call from a
citizen or MMS employee, the OIG will advise MMS to suspend civil
penalty proceedings, in a similar manner, until the matter is
reviewed by the panel listed above.
We have adopted this policy to demonstrate our intent to pursue
civil penalties in all cases of serious violations. In the event
that the criminal case is dropped or otherwise fails, MMS will
have already indicated its intent to pursue civil penalties.
Each such case will be evaluated on its own merits for concurrent
civil and criminal proceedings. This strategy has been adopted
so that civil penalty proceedings will not get in the way of
criminal investigations, and so that a civil penalty will not
affect the amount or extent of a possible criminal penalty.
When we requested that the Service's reviewing officers in the
Gulf of Mexico analyze those cases from our sample which we
determined should have been referred to the Office of Inspector
General, they responded that they did not have the knowledge or
the training to determine whether these cases should be referred.
Although the revised "Guidebook" identifies the procedures for
Service personnel to follow in criminal matters, additional
guidelines and training on what constitutes a potential criminal
violation need to be provided to those personnel who decide which
cases should be referred for investigation, such as the Service's
Outer Continental Shelf inspectors, reviewing officers, and
regional civil/criminal penalty program coordinators.
The Service said that it had made several attempts to obtain
guidance on what cases should be referred to the Office of
Inspector General from the Office of Inspector General for
Investigations and to coordinate its civil assessment process
with the Office of Inspector General's investigations on cases
referred. Specifically, the Service said that its initial
attempt was a May 23, 1995, memorandum to its Outer Continental
Shelf Directors in the Gulf of Mexico and Pacific Regions
outlining procedures related to concurrent civil and criminal
penalty investigations. In addition, Service officials said that
the Service had held several meetings in August and October 1997
with personnel from the Solicitor's Office and the Office of
Inspector General to coordinate its criminal penalty referrals to
the Office of Inspector General for Investigations with the
Service's civil penalty assessments. However, according to
Service officials, guidance was not obtained and an agreement was
not reached on the proper coordination, which is why the Service
requested that the Office of Inspector General review the
criminal referral process. We believe that the Office of
Inspector General and the Service, in conjunction with the
Solicitor's Office, should develop specific guidance for Service
personnel to differentiate between those cases that should be
handled administratively through the civil penalties process and
those that should be referred to the Office of Inspector General
for consideration of criminal proceedings. The specific guidance
should include applicable laws and should identify the types of
violations that would most likely result from a knowing and
willful act and/or result in significant environmental or other
harm (actual or potential) to the Government. The Office of
Inspector General should then provide training to Service
personnel on how to differentiate the cases.
Coordination of Referred Cases
We reviewed 11 of the 18 criminal referrals by the Service to the
Office of Inspector General and found that the Office of
Inspector General had not formally informed Service personnel of
the status of cases referred. We were unable to review seven
criminal case files because, according to investigators from the
Office of Inspector General, five files that had been retired to
the Federal Records Center could not be located by Center
personnel and two cases were being investigated at the time of
our review. Of the 11 cases reviewed, we found that (1) the
Office of Inspector General declined to forward 2 cases to the
Department of Justice because either the violations did not
appear to be knowing and willful actions or no Office of
Inspector General investigative resources were available to
investigate the cases; (2) the Department of Justice declined to
prosecute 6 cases because, according to files of the Office of
Inspector General, there was minimal gain by violators, no
financial loss to the Government, and no harm to the environment;
and (3) the Department of Justice had 1 criminal prosecution and
2 civil settlements for the remaining 3 cases.
The Service's 1992 "Guidebook" and revised "OCS Civil/Criminal
Penalties Program Policy and Procedures Guidebook" state that
civil penalty cases should be initiated concurrently with
criminal cases. However, the Office of Inspector General did not
effectively coordinate with the Service on criminal case
referrals because the Office of Inspector General did not have a
process to formally notify the Service of the status of referred
cases. The lack of coordination issue was also addressed in a
1994 Service annual review.[1] We found one instance in which
the Service did not pursue a civil penalty case because a
concurrent review was not performed after referral to the Office
of Inspector General and the case was 14 months old before it was
declined for criminal investigation by the Office of Inspector
General for a lack of resources. As a result, the violator was
not issued a civil penalty and a criminal prosecution was not
pursued because the Office of Inspector General had insufficient
resources to devote to the case. Based on our review of 11
criminal cases, we found no evidence of any formal memoranda
issued by the Office of Inspector General to the Service
concerning the final status of cases referred. For example, one
case was referred to the Department of Justice in 1994 by the
Office of Inspector General. We could not find any followup
actions with the Department of Justice or the Service that had
been documented by the Office of Inspector General. Almost 5
years later, the criminal case was still shown as open in the
Office of Inspector General investigative file. An Office of
Inspector General investigator told us that the Service was
normally informed of the disposition of referred cases informally
through telephone conversations.
We believe that the Office of Inspector General needs to
establish a formal process to timely inform the Service of the
status of all referred cases, including criminal investigations,
to ensure that (1) violators are issued civil penalties and (2)
civil penalty investigations do not interfere with criminal
investigations.
Recommendations
We recommend that the Director, Minerals Management Service, and
the Assistant Inspector General for Investigations:
1. Jointly establish more specific guidelines, in conjunction
with the Solicitor's Office, which identify factors such as the
types of violations, the potential environmental or financial
harm to the Government, and operator history of noncompliance to
distinguish cases meriting criminal investigation. These
guidelines should be incorporated into the Service's "OCS
Civil/Criminal Penalties Program Policy and Procedures Guidebook"
or in a memorandum to Service personnel.
2. Provide training to the Service's Outer Continental Shelf
personnel involved in the criminal referral decision process on
the guidance developed in Recommendation 1 and on the types of
information on violations that should be documented.
We recommend that the Assistant Inspector General for
Investigations:
3. Provide written notification to the Service on the status of
all referred cases within 60 days of the referral and timely
inform the Service in writing of the disposition of the referred
cases.
Minerals Management Service Response and Office of Inspector
General Reply
In the September 14, 1999, response (see Appendix 1) to the draft
report from the Director, Minerals Management Service, the
Service concurred with Recommendations 1 and 2 and said that it
would coordinate a target date for completion of the
recommendations with the Assistant Inspector General for
Investigations and the Solicitor's Office. The Service also
agreed with the third recommendation to the Assistant Inspector
General for Investigations and suggested that the recommendation
be expanded to include providing quarterly reports which
summarize the status of all ongoing criminal investigations to
the Service's National OCS Civil/Criminal Penalties Program
Coordinator.
Based on the Service's response, we consider Recommendations 1
and 2 resolved but not implemented (see Appendix 3).
Assistant Inspector General for Investigations Response and
Office of Inspector General Reply
In the September 14, 1999, response (see Appendix 2) to the draft
report from the Assistant Inspector General for Investigations,
Investigations concurred with Recommendations 1, 2, and 3 and
said that it would coordinate a target date for completion of
Recommendations 1 and 2 with the Service and the Solicitor's
Office. In subsequent communications, the Assistant Inspector
General for Investigations provided a revised target date of
February 29, 2000, for Recommendation 3. Regarding the Service's
suggestion to provide quarterly reports summarizing the status of
all ongoing criminal investigations, Investigations officials, in
a subsequent discussion, stated that they would consider the
suggestion.
Based on the responses and subsequent communications, we consider
Recommendations 1, 2, and 3 resolved but not implemented.
Accordingly, the recommendations will be referred to the
Assistant Secretary for Policy, Management and Budget for
tracking of implementation. Since the report's recommendations
are considered resolved, no further response to the Office of
Inspector General is required (see Appendix 3).
**FOOTNOTES**
[1]:An annual review of the OCS Civil/Penalties Program is
required by the Service's 1992 "Guidebook." According to the May
1994 final report , the 1994 review was the second review
conducted by the Service of the Program. The report stated that
there were "no major problems with the program . . . . However, a
number of minor program implementation weaknesses were
identified." One of the minor weaknesses identified, according
to the final report, was the need to improve communication
between the Service and the Office of Inspector General. The
report recommended that the Service "[d]evelop procedures for
communication with the Office of . . . Inspector General (IG)
regarding initiation of criminal investigations."
Section 5(a) of the Inspector General Act (5 U.S.C. app. 3)
requires the Office of Inspector General to list this report in
its semiannual report to the Congress. In addition, the Office
of Inspector General provides audit reports to the Congress.
APPENDIX 1
Page 1 of 3
APPENDIX 1
Page 2 of 3
APPENDIX 1
Page 3 of 3
APPENDIX 2
Page 1 of 3
APPENDIX 2
Page 2 of 3
APPENDIX 2
Page 3 of 3
APPENDIX 3
STATUS OF ADVISORY REPORT RECOMMENDATIONS
-----------------------------------------------------------
Finding/Recommendation Action
Reference Status Required
-----------------------------------------------------------
1, 2, and 3 Resolved; not No further response to
implemented. the Office of Inspector
General is required. The
recommendations will be
referred to the Assistant
Secretary for Policy,
Management and Budget for
tracking of
implementation.
-----------------------------------------------------------
ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED
TO THE OFFICE OF INSPECTOR GENERAL BY:
Sending written documents to:
Within the Continental United States
U.S. Department of the Interior
Office of Inspector General
1849 C Street,N.W.
Mail Stop 5341
Washington, D.C. 20240
Calling:
Our 24 hour
Telephone HOTLINE
1-800-424-5081 or
(202) 208-5300
TDD for hearing impaired
(202) 208-2420 or
1-800-354-0996
Outside the Continental United States
Caribbean Region
U.S. Department of the Interior
Office of Inspector General
Eastern Division- Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209
Calling:
(703) 235-9221
North Pacific Region
U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. F'lores Street
Suite 807, PDN Building
Agana, Guam 96910
Calling:
(700) 550-7428 or
COMM 9-011-671-472-7279