UPDATE 1-US Interior requests offshore agency ethics probe

* Investigation launched into MMS monitoring

* Report finds ethics lapses at Interior before 2007

* MMS staff accepted gifts from oil companies

* Salazar asks for probe of ethics since he took office
(Recasts, adds details from report, comment from lawmaker)

By Ayesha Rascoe

WASHINGTON, May 25 (BestGrowthStock) – U.S. Interior Secretary Ken
Salazar on Tuesday ordered an investigation into whether the
rig involved in the massive oil spill in the Gulf of Mexico was
properly monitored by the Minerals Management Service.

The investigation follows a report citing workers from the
MMS accepting gifts, viewing pornography and possibly allowing
oil workers to fill out their own inspection reports.

The report found it was commonplace before 2007 for MMS
employees at a Lake Charles, Louisiana office to receive gifts
including sporting event tickets and hunting trips from energy
companies.

“This deeply disturbing report is further evidence of the
cozy relationship between some elements of MMS and the oil and
gas industry,” Salazar said in a statement.

The Interior Department has been criticized in recent weeks
for not doing enough to prevent the explosion on Transocean’s
(RIGN.S: ) Deepwater Horizon rig leased by BP (BP.L: ), which led
to a ruptured undersea well that is spewing thousands of
barrels oil a day into the Gulf of Mexico.

Salazar said he has asked the agency’s acting inspector
general, Mary Kendall, to look into whether MMS employees
adequately inspected and enforced standards on the Deepwater
Horizon rig. He also asked the inspector to determine if the
improper behavior outlined in the report has continued since he
took office at the department.

“Obviously, we’re all oil industry,” Lake Charles District
Manager Larry Williamson said in the report. “Almost all of our
inspectors have worked for oil companies out on these same
platforms. Some of these people, they’ve been friends with all
their life.”

In addition to accepting gifts, the report said a
confidential industry source accused some MMS inspectors of
allowing energy company workers to fill out their own
inspection forms for their platforms. Investigators, however
could not determine if any of the files they reviewed were
fraudulent.

Investigators also said they found numerous instances of
pornography and inappropriate material on employee email
accounts.

Both Kendall and Salazar are set to testify before the
House Natural Resource committee Wednesday on the oil spill.

“It’s past time for MMS to stop acting as a farm team for
the industry — the Deepwater Horizon oil rig explosion is
proof that this isn’t just a game,” House Natural Resources
committee chairman Nick Rahall said in response to the report.

An inspector general report released in 2008 found that MMS
employees at another office received gifts, as well as used
illegal drugs and had sex with workers from the oil companies
they were supposed to oversee.

In response to this scandal, Salazar instituted new ethics
rules after he took the helm of the department in 2009.

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(Editing by Alden Bentley, Sofina Mirza-Reid)

UPDATE 1-US Interior requests offshore agency ethics probe