Editorial Anything Goes, Apparently Published: September 11, 2008

It seemed inevitable that bad things would happen when President Bush and Vice President Dick Cheney packed the top posts at the Department of the Interior with lobbyists who had spent their careers representing the very industries they were now being asked to regulate. But it was left to Earl Devaney, the department’s inspector general — and the busiest gumshoe inside the federal bureaucracy — to demonstrate just how bad things could be.

In three extraordinary reports delivered to Congress this week, Mr. Devaney found that officials at the Mineral Management Service — the division responsible for granting offshore oil leases and collecting royalties — accepted gifts, steered contracts to favored clients and engaged in drugs and sex with oil company employees as part of what he described as a broader “culture of substance abuse and promiscuity.”

At the center of the scandal is the royalty-in-kind program, under which the service takes delivery of oil and gas in lieu of cash payments from energy companies, then sells it to refiners. The program is vulnerable to manipulation at either end of the transaction, by overvaluing the oil and gas when it is received or undervaluing it when it is sold.

The White House can take no comfort at all. The people it brought to Washington to run the department had no interest in policing the oil, mining and agricultural interests they were sworn to regulate and every interest in promoting industry’s (and their own) good fortune. The most notorious of these was J. Steven Griles, a mining industry lobbyist who really ran the agency for four years and who later pleaded guilty to obstruction of justice in the Jack Abramoff scandal.

The fruit of these terrible appointments was aptly described by Mr. Devaney two years ago when he appeared before a House subcommittee. “Short of a crime,” he said, “anything goes at the Department of the Interior.”

It now appears that crime could be part of the mix.