THE BLOG

Only Transparency Can Permanently Fix the Mess at the MMS

05/28/2010 05:37 pm 17:37:02 | Updated May 25, 2011

As the House Natural Resources Committee began its own hearings this week on the regulation of the oil and mining industry, more improprieties surfaced at the Interior Department's Minerals Management Service, this time in Louisiana, where regulators apparently accepted gifts and trips from industry representatives and even allowed oil companies to effectively complete federal inspection reports themselves.

Policy watchdogs at POGO refer to the waves of MMS/Department of Interior scandals as "Interior Sex and Drugs 2.0." Indeed, Interior Secretary Ken Salazar has been pointed in his commitments to overhaul the MMS, putting into effect new ethics rules after earlier scandals in Colorado, and announcing plans to break the agency into three separate and more independent parts.

Such reorganization is urgently needed but by itself will constitute only a half-step. As Secretary Salazar knows, Congress has ordered previous reorganizations of Interior's minerals management. These have clearly not solved a deeper problem. The MMS itself was created in response to an industry corruption scandal in the 1980s. Nevertheless, it has remained, in Salazar's words, "the candy store of the oil kingdom."

Congress and the Obama administration can and must do more. As the President has said on more than one occasion, transparency is the key to accountable government. Nowhere is that principle more applicable than here. Successive inspectors general have reported how the Interior Department's failures in the management of oil and gas leases on public lands and waters have lost the government billions of dollars in royalties. Interior's long record of mismanagement has been aided by the secrecy that applies to individual company transactions under the Department lawyers' generous interpretation of "trade secrets."

The government, the public and the industry need a new era of transparency, which means making key data public. This includes each company's production figures from public lands and waters, block by block, royalty and tax payments, block by block; production costs; and environmental and safety inspection reports. Transparency makes it far harder to hide regulatory or industry misdeeds and failures.

During its debates on the Wall Street reform bill, the Senate came close to requiring all extractive companies registered with the SEC to disclose their payments to governments, country by country. This would have been an important first step. Congress should pass the payment disclosure legislation, and it should require comprehensive disclosure of the dealings between the oil and gas and mining industry and the U.S. government as part of the legislation reorganizing Interior's regulation of minerals extraction on Federal lands.

When considering how to repair the damage in the Gulf of Mexico and along the Gulf coast, Congress and the administration should focus not just on capping a runaway well but also on permanently shining light on the relationship between oil and gas and mining industries and government. The way to clean up the mess in Interior and in our waters is to shine enough light to make dealings between industry and government transparent to all of us.