Washington -
The Interior Department's chief official
responsible for investigating abuses and
overseeing operations accused the top officials
at the agency on Wednesday of tolerating
widespread ethical failures, from cronyism to
cover-ups of incompetence.
“I have
observed one instance after another when the
good work of my office has been disregarded by
the department,” he continued. “Ethics failures
on the part of senior department officials —
taking the form of appearances of impropriety,
favoritism and bias — have been routinely
dismissed with a promise ‘not to do it again.’ ”
The
blistering attack was part of Mr. Devaney’s
report on what he called the Interior
Department’s “bureaucratic bungling” of oil and
gas leases signed in the late 1990’s, mistakes
that are now expected to cost the government
billions of dollars but were covered up for six
years.
While
these leases were the specific focus of the
hearing, Mr. Devaney directed most of his
criticism at what he called a broader
organizational culture at the Interior
Department of denial and “defending the
indefensible.”
He
expressed particular fury at the willingness to
dismiss two dozen potential ethical lapses by J.
Steven Griles, a former industry lobbyist who
served as deputy secretary of the interior
during President Bush’s first term.
Mr. Griles
resigned after allegations surfaced that he
pushed policy decisions that favored some of his
former oil and gas industry clients and that he
tried to steer a $2 million contract to a
technology firm that had also been one of his
clients.
In a
145-page report in 2004, the inspector general
described Mr. Griles as a “train wreck waiting
to happen.” But on Wednesday, Mr. Devaney said
he was appalled that the Interior Department’s
office of ethics dismissed 23 out of 25
potential ethical breaches against Mr. Griles
and that
Gale A. Norton, then
secretary of the interior, decided not to act on
the two remaining allegations.
Mr. Griles
is once again a lobbyist in Washington. Efforts
to reach Mr. Griles on Wednesday evening at his
lobbying firm, Lundquist, Nethercutt & Griles,
were unsuccessful.
Mr.
Devaney said that case was typical of a much
broader “culture of managerial irresponsibility
and lack of accountability” in the top reaches
of the Interior Department.
“I have
unfortunately watched a number of high-level
Interior officials leave the department under
the cloud of O.I.G. investigations,” Mr. Devaney
said, referring to the Office of Inspector
General.
“Absent
criminal charges, however, they are sent off in
the usual fashion, with a party paying tribute
to their good service and the secretary wishing
them well, to spend more time with their family
or seek new opportunities.”
That was
almost exactly what happened to Mr. Griles, who
was never charged with any wrongdoing, though he
admitted to using bad judgment in some cases.
Dirk
Kempthorne, who succeeded Ms. Norton as interior
secretary earlier this year, said Wednesday that
he took the inspector general’s allegations
“very seriously” and had sent a letter to all
employees on his first day at the department on
the need to follow ethical guidelines.
Mr.
Kempthorne declined to say what additional
actions he might take until he saw Mr. Devaney’s
final report.
Mr.
Devaney, a burly man who began his career as a
police officer in Massachusetts, is no stranger
to combative investigations or confrontations
with top officials.
He
spent more than 20 years as a special agent in
the Secret Service, specializing in white-collar
crime, eventually being put in charge of the
service’s fraud division. In the 1990’s, he
became director of criminal enforcement at the
Environmental Protection Agency.
He was
named inspector general at the Interior
Department in 1999, just as whistle-blowers
outside the government were pressing huge
lawsuits alleging that oil companies were
fraudulently underpaying royalties.
Three
years ago, Mr. Devaney scathingly criticized the
Interior Department’s auditing program for oil
and gas royalties.
Beyond
finding that investigators had missed millions
of dollars in underpayments, his office
uncovered evidence that agency auditors had lost
key files, then tried to fool investigators by
forging and backdating the missing documents. In
an acid rebuke of the agency, Mr. Devaney noted
that the agency gave a bonus to the official who
came up with the false papers.
Mr.
Devaney’s broadside against the Interior
Department’s culture dovetailed with his
tentative conclusions in his most recent
investigation, into how the department had
managed to sign 1,100 leases for offshore
drilling that inadvertently let energy companies
escape billions of dollars in royalties on gas
and oil produced in the Gulf of Mexico.
The
leases, signed in 1998 and 1999 during the
Clinton administration, allow companies to
escape normal federal royalties — usually 12.5
percent of sales — on the tens of millions of
barrels of oil on each lease.
The
royalty break was intended as an incentive for
deepwater drilling, but it was also supposed to
end if oil prices climbed above a “threshold”
level of about $34 a barrel. The leases at issue
omitted that restriction, and department
officials kept quiet about their mistake for six
years after they discovered it.
The
problem was first disclosed by The
New York Times in
March. Government officials now estimate that
the mistake could cost the Treasury as much as
$10 billion over the next decade.
“The
Interior Department holds our natural resources
in trust for the American people,’’ said
Representative Darrell Issa, Republican of
California and chairman of the House Government
Reform subcommittee on energy and resources. “It
squandered billions instead.”
Mr.
Devaney said the error, a result of
compartmentalized thinking within the
department, might have remained buried if senior
officials had had their way.
“We do not
have a ‘smoking gun,’ ’’ Mr. Devaney said. “We
do, however, have a very costly mistake which
might never have been aired publicly absent The
New York Times, the interest of this committee,
the Senate Committee on Energy and Natural
Resources and several other interested members
of Congress.”
Felicity
Barringer contributed reporting.