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Wang: Close Oil-Government Ties Are Unremarkable

If, on the other hand, POGO was suggesting that Luthi unduly benefited the industry for the purpose of currying favor and securing future employment, Brian also acknowledged the possibility that “he was always ideologically opposed to the agency’s mission.” Which brings us to the next point: What exactly was the agency’s mission, and how did it affect the regulators who worked there?

A recent Interior Department inspector general’s report found that MMS inspectors and oil industry employees were often close personal friends. As one MMS manager stated: “They grew up in the same towns. Some of these people, they’ve been friends with all their life.”

To a great extent, employment is self-selecting. It comes as no surprise that an agency focused on exploiting natural resources for productive use would be dominated by individuals sympathetic to industry. On the other hand, we would be far more concerned if regulators at the Environmental Protection Agency were close friends with industry employees.

All this is background for my main point, which is that additional ethics laws directed at offshore drilling regulators probably would have minimal impact. While the Interior IG’s report contained sensational findings about MMS inspectors accepting large gifts from oil companies, this was a violation of long-standing law. As the IG report itself noted, these problems declined after a regional director was criminally prosecuted.

At the House Oversight hearing, POGO posited that these criminal violations were evidence of the revolving-door problem. Actually, they illustrate the solution, which is more enforcement of existing ethics laws.

Congress is considering two bills, the Outer Continental Shelf Reform Act (S. 3516) and the Consolidated Land, Energy and Aquatic Resources Act (H.R. 3534), which reinforce the restructuring of MMS that the Department of Interior has already undertaken. These measures properly separate MMS’ safety and environmental inspection roles from its revenue function, and they address the actual conflict of interest that existed at MMS.

To the extent amendments to these bills also impose additional revolving-door restrictions on the Interior Department, they are tangential to the legislation and appropriately so.

Eric Wang, a political law attorney, has advised clients on all aspects of government ethics laws. E-mail him at ericwang@alumni.princeton.edu.

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