Interior IG is probing federal approval of Deepwater Horizon rig operations

Kendall revealed the probe in testimony submitted to the House Natural Resources Committee, which began a series of hearings Wednesday about offshore drilling and the spill.

Kendall’s testimony also notes that since the April 20 accident, it has become increasingly clear that the IG’s work must be expanded to “providing oversight of the operational, environmental, safety, inspection and enforcement aspects of energy production on federal lands and in the OCS [Outer Continental Shelf].”

“We have begun a multi-pronged effort to address these issue areas as quickly and thoroughly as possible,” she said.

The addition of the IG probe is significant because the IG’s office has a history of uncovering major problems at the Minerals Management Service (MMS), the federal agency that regulates offshore drilling.

Just this week, Kendall released a report that found that MMS regulators in Louisiana had received gifts from oil and gas companies before 2007.

The report also described allegations that companies were allowed to fill out their own inspection forms, and noted porn stored on MMS employees’ e-mail accounts, as well as instances of drug use.

Update: Kendall found a silver lining of sorts in the new report. She noted that “the misconduct is arguably less egregious, and considerably less salacious, than that in our report issued in 2008 about misconduct in the Royalty in Kind program.”

A 2008 IG report found a “culture of substance abuse and promiscuity” at the agency’s Denver office. The report said that MMS officials did drugs and had sex with energy company representatives.



Under the Royalty in Kind program, companies provided oil and natural gas directly to Interior in lieu of cash royalties. Salazar announced the termination of the program last year.