Skip to main content

Head of Minerals Management Service fired, sources say

By the CNN Wire Staff
  • MMS Service Director Elizabeth Birnbaum has been fired, sources say
  • Interior Department report cited inappropriate relationship between inspectors, oil industry
  • Interior Secretary Ken Salazar insists Birnbaum resigned and has done a good job
  • Legislation has been introduced in part to help crack down on the MMS

Washington (CNN) -- Minerals Management Service Director Elizabeth Birnbaum has been fired, according to two CNN sources.

A senior administration official has told CNN that an official announcement will be made during President Barack Obama's news conference scheduled for Thursday afternoon.

The decision to fire Birnbaum comes in the wake of a recently released report highlighting what many observers have characterized as widespread corruption at the Minerals Management Service (MMS), which is part of the Interior Department.

The period covered by the report was prior to the April explosion in the Gulf of Mexico that sank the oil rig Deepwater Horizon, resulting in a massive oil spill that well owner BP and federal authorities are still trying to cap.

Among other things, the report, issued by the Interior Department's inspector general, revealed that federal inspectors overseeing oil drilling in the Gulf of Mexico accepted meals and tickets to sporting events from companies they monitored.

In one case, an inspector in the MMS office in Lake Charles, Louisiana, conducted inspections of four offshore platforms while negotiating a job with the company, the report stated.

The Lake Charles investigation was launched shortly after another scandal emerged from within the MMS. A September 2008 inspector general's report found regulators in the agency's Colorado office received improper gifts from energy industry representatives and engaged in illegal drug use and inappropriate sexual relations with them.

Interior Secretary Ken Salazar recently called the allegations of MMS corruption "evidence of the cozy relationship between some elements of [the agency] and the oil and gas industry." He pledged to follow through with the Interior Department inspector general's recommendations, "including taking any and all appropriate personnel actions including termination, discipline and referrals of any wrongdoing for criminal prosecution."

Salazar insisted Thursday in testimony before a House subcommittee, however, that Birnbaum had resigned "on her own terms and own volition."

She "is a strong and very effective person who, among other things, helped us break through the very difficult things which we have a lot more work to do," Salazar said. "She helped us with addressing a very broken system. And all I can really [say] is that she is a good public servant."

MMS collected nearly $10 billion in royalties from the energy and mining industries in 2009. Salazar recently announced that he was splitting up the agency to separate its energy development, enforcement and revenue collection divisions, saying they have "conflicting missions" that needed to be separated.

The associate director for the agency's Offshore Minerals Management Program is leaving at the end of May, a month earlier than planned, in the wake of the Gulf spill. That official, Chris Oynes, launched the investigation that resulted in former New Orleans, Louisiana, supervisor Donald Howard's firing in 2007. Howard later pleaded guilty after being accused of failing to report gifts valued at more than $6,600 from an offshore drilling contractor.

As part of the growing push to crack down on the MMS, Sen. Bill Nelson, D-Florida, introduced legislation Wednesday requiring federal oil industry regulators to wait at least two years after leaving government service before going to work for companies they helped regulate.

Among other things, the bill would bar regulators from accepting gifts from oil companies. It also would require regulators to divest themselves of any stock they may currently hold in oil companies, and prohibit regulators from part-time employment in the industry.