WASHINGTON – Two employees of the Interior Department have been fired and eight others disciplined in the aftermath of a scandal over the acceptance of meals, junkets, gifts and, in some cases, sex and drugs from the energy companies they regulated, a knowledgeable person said Friday.
Randall Luthi, the director of the department's Minerals Management Service (MMS), announced Friday that he'd meted out discipline ranging from a letter of reprimand to dismissal, but gave no details.
All those disciplined worked in the controversial Royalties-in-Kind (RIK) program, in which the government forgoes royalties on federal leases and instead takes a percentage of the pumped oil and gas for resale.
The actions came in response to a scathing September report in which the department's inspector general, Earl Devaney, described "a culture of substance abuse and promiscuity" in the RIK program and said 19 of its employees had taken gifts from oil and gas industry sources.
The employees' cozy ties with industry have raised alarm because of the potential impact on the federal treasury of any favors or leniency they might have shown their industry hosts. The MMS recently announced that it had collected a record $23.4 billion in royalties amid soaring oil and gas prices in the fiscal year ending Sept. 30, including more than $3 billion for states and Indian tribes, far exceeding the previous record of $12.6 billion, set in 2006.
The person with close knowledge of the disciplinary actions, who declined to be identified because of the sensitivity of the matter, said that two female marketing specialists in the Royalties-in-Kind program had been terminated and a third employee had been demoted to a lower pay grade. Luthi's statement indicated that at least one RIK employee was transferred to a job outside the unit.
The first person and a second, who also insisted on anonymity, identified the fired women as Stacy Leyshon and Cristel Edler, who cleaned out their desks when they were put on administrative leave weeks ago, pending resolution of the administrative action.
From 2002 to 2006, the two accepted outings, meals and gifts valued at more than $5,500 from three oil companies, these people said.
Leyshon, who held a supervisory post, got $10,450 in cash from the MMS during the same period for meritorious service, although her name showed up 45 times on Chevron's expense reports and she got 29 gifts from Shell Oil and Gary-Williams Energy Corp., the inspector general reported.
Leyshon repeatedly said that she'd donated all gifts to charity but couldn't produce any receipts, the report said.
It also said that e-mails showed that Edler, who allegedly accepted gratuities on at least 61 occasions, had divulged confidential pipeline-transportation rates provided to the government by Poseidon Oil to a competitive rival, Shell Oil.
Leyshon and Edler, who live in Colorado, where the MMS program is based, couldn't be reached for comment.
Call Greg Gordon, McClatchy Washington Bureau, (202) 383-0005.
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