Gulf oil spill puts spotlight on regulator with mixed record

With news from the spill in the Gulf of Mexico oil rig getting worse -- a top Coast Guard official warned it could end up being "one of the most significant oil spills in U.S. history" -- questions are beginning to be asked about how it happened, and how it could have been prevented.

As The Wall Street Journal reported this morning, the oil rig lacked a device -- known as an acoustic control -- that would've served as a safeguard of last resort. While the effectiveness of the $500,000 device is debated, the Journal points out that it is used by other oil-producing nations, including Brazil and Norway. Regulators in the U.S. were also considering requiring it a few years ago, but after industry objections decided that the devices were expensive and needed more study.

So which regulator oversees rigs and made that decision? It was the Department of Interior's Minerals Management Service, an agency that has had a spotty record over the past few years.

In 2008, ProPublica pointed out that MMS was in quite a bit of trouble for ethical violations by its officials. The scandal involved sex, drugs and (quite literally) sleeping with the very industry it was regulating. Here's how The New York Times summarized the government's investigation:

The investigation also concluded that several of the officials "frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives." The investigation separately found that the program's manager mixed official and personal business. In sometimes lurid detail, the report also accuses him of having intimate relations with two subordinates, one of whom regularly sold him cocaine.

That hasn't been the end of MMS's troubles. According to an audit earlier this month by the Government Accountability Office, the regulator has hardly been a straight shooter on offshore drilling and the risks involved. The GAO found that MMS withheld data on offshore drilling in Alaska from regional staff members at the agency involved in environmental analyses. The report also found that MMS lacked sufficient guidelines to properly analyze the risks of drilling in the region.

"We found considerable variation among MMS's ... regions in how they assess what constitutes a ‘significant' environmental impact," reads the report (PDF). And on the withholding of data: "Some of its own scientists have alleged that their findings have been suppressed." (In a formal response to the report, the Department of the Interior said it "generally agrees" with the findings.)

The Project on Government Oversight, a nonprofit watchdog, told us regulation wasn't a priority for MMS.

"It was an agency that was very strapped in its human resources, and essentially the priority for the agency was on production rather than on regulation and oversight," said Mandy Smithberger of POGO. She added that under Ken Salazar, who became Secretary of the Interior in January 2009, this may be changing, "but we have not seen material changes so far."