The Interior Department’s revolving door

The federal agency that regulates offshore drilling toughened its conflict-of-interest rules this week in an effort to eliminate corruption. But while the new guidelines impose strict requirements on government inspectors, they do not apply to bureaucrats in Washington who set policy.

The new rules prohibit employees of the Bureau of Ocean Energy Management, Regulation and Enforcement — formerly known as the Minerals Management Service — from performing inspections on drilling rigs when the contractor employs a family member or personal friend.

Outside of that agency, however, the rules do not apply. That means Interior Department employees such as Deputy Assistant Secretary for Land and Minerals Management Sylvia Baca, who spent eight years at BP before landing her government job, will not have to file a recusal request.

Baca’s appointment is illustrative of the revolving door between the oil industry and government that President Obama criticized after the Gulf oil spill.

“At this agency, industry insiders were put in charge of industry oversight,” Obama lamented in his June 15 Oval Office address about the BP oil spill.

Yet it was Obama’s own administration that perpetuated the revolving door mentality with Baca’s appointment. Now, by failing to mandate the conflict-of-interest rules for all Interior Department employees, the Obama administration is falling short on the president’s promise of “shutting down the ‘revolving door’ that carries special interest influence in and out of the government.”

Baca was the ultimate industry insider when Interior Secretary Ken Salazar tapped her for the post in June 2009.

Her eight years at BP included stints at the company’s U.S. headquarters in Houston as well as time in London and Los Angeles. In her last job at BP, she led the company’s social investment programs and strategic partnerships. It was one several senior management positions at the company since 2001.

“It was a terrible judgment call to appoint her,” Kieran Suckling, executive director of the Center for Biological Diversity, said about Baca. “It is politically catastrophic to keep her. If Salazar is serious about reform, he needs to start with his own interest-conflicted appointments.”

In Baca’s case, the revolving door has been spinning for about 15 years. She was an attractive candidate for BP because she served as the Interior Department’s assistant secretary for Land and Minerals Management from 1995 to 2001. In that post during the Clinton administration, she was the Interior secretary’s chief adviser on environmental responsibility for public lands.

It was also during Baca’s previous stint in 1998 and 1999 when the Interior Department issued more than 1,000 leases that mistakenly excluded price thresholds that would have required oil and gas companies to pay royalties when prices reached a certain level. A Government Accountability Office report revealed “potential foregone royalties on future production could be up to $60 billion over the life of the leases.”

Because her Interior appointment last year did not require Senate confirmation, Baca avoided having to answer any questions before Congress about her role in the scandal. Neither Baca nor the Interior Department responded to several requests for comment.

Baca isn’t the only example of the revolving door at Interior. Mother Jones reported last week that former Bureau of Land Management field manager Steven Henke recently accepted a job as head of the New Mexico Oil and Gas Association. Henke happened to be under the watchful eye of the Interior Department’s inspector general for his close ties with the industry.

The Interior Department, when questioned about Baca, noted that she has recused herself from matters involving BP for two years following her June 18, 2009 appointment. But that still begs the question of why there is a double-standard for Washington bureaucrats vs. field inspectors on the conflict-of-interest rules.

If the Interior Department is serious about reducing corruption, Salazar has a long way to go before he can fully restore trust in the department. He could start by making the conflict-of-interest rules uniform for all employees.

Bluey directs and Korbe is a reporter for the Center for Media and Public Policy, an investigative journalism operation at The Heritage Foundation.

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