A report released in September by U.S. Inspector General Earl Devaney revealed a “culture of substance abuse and promiscuity” at the Royalty in Kind (RIK) division of the federal MineralsService in Lakewood.
The report found that from 2002 to 2006, nearly a third of the 55 members of the RIK staff were trading more than mineral resources royalties with representatives of oil and gas companies. Stacy Leyshon and Crystal Edler, who became known in the energy industry as the “MMS chicks,” reportedly accepted thousands of dollars in meals, drinks and entertainment from industry representatives.
Employees also used drugs and had sex with energy company workers, according to the report.
When confronted with the question of ethics violations, “none of the employees involved displayed remorse,” Devaney reported. Indeed, RIK staffers told investigators they believed they had to socialize with oil company executives to gain information they needed to do their jobs.
Greg Smith, a former RIK director, allegedly bought cocaine from a co-worker and had sex with subordinates. Smith is also accused of steering government contracts to a consulting firm, Geomatrix Consultants, which paid him more than $30,000 for work conducted using MMS resources.
Gov. Bill Ritter called for further accounting work. “The investigation must closely examine how much this type of corruption has cost American—and Colorado—taxpayers. The oil and gas industry already benefits from taxpayer subsidies, so the question is: How much has this scandal cost us in lost revenue?”
Consequences are likely to be spotty. As Devaney noted, some implicated employees have “escaped potential administrative action by departing from federal service, with the usual celebratory send-offs that allegedly highlighted the impeccable service these individuals had given to the federal government.”
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