Interior Department employees under investigation for sex, drugs, and bribe scandal 4

Thirteen government officials are under investigation for allegedly engaging in illicit sex with and accepting a number of gifts from employees of energy companies, according to federal investigators. The probe involves Interior Department employees in the Denver and Washington offices, who handle billions of dollars in oil royalties.

At the Denver Minerals Management Service, the former head of the Royalty-in-Kind office, Gregory W. Smith, used illegal drugs and had sex with subordinates, and also helped secure government contracts for a consulting firm that employed him part-time. Almost a third of the 55-person staff in that office received gifts and gratuities from oil and gas companies between 2002 and 2006, according to investigators.

From the Associated Press:

Government officials handling billions of dollars in oil royalties engaged in illicit sex with employees of energy companies they were dealing with and received numerous gifts from them, federal investigators said Wednesday.

The alleged transgressions involve 13 Interior Department employees in Denver and Washington. Their alleged improprieties include rigging contracts, working part-time as private oil consultants, and having sexual relationships with -- and accepting golf and ski trips and dinners from -- oil company employees, according to three reports released Wednesday by the Interior Department's inspector general.

The investigations reveal a "culture of substance abuse and promiscuity" by a small group of individuals "wholly lacking in acceptance of or adherence to government ethical standards," wrote Inspector General Earl E. Devaney.

Here's the full report from Devaney. In it, he notes that one major oil company, Chevron, refused to cooperate with this investigation into what he calls a "disturbing chapter of MMS history." Yet the biggest problem, he says, was the culture within the agency.

"The single-most serious problem our investigations revealed is a pervasive culture of exclusivity, exempt from the rules that govern all other employees of the Federal Government," he writes in a memo to Interior Secretary Dirk Kempthorne included with the report. "Nearly 1/3 of the entire RIK staff socialized with, and received a wide array of gifts and gratuities from, oil and gas companies with whom RIK was conducting official business. While the dollar amount of gifts and gratuities was not enormous, these employees accepted gifts with prodigious frequency."

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