So I was going to write about who I am, and the direction I wanted to take the blog. Ok, thats not true, I really did not want to do that, so instead I decided to procrastinate by writing about a sexy scandal that I hope we all know about already
Over the past few weeks, I have talked to quite a few friends who I consider to be far smarter than me (and who will hopefully be contributing within the near future), about the disaster on the Deepwater Horizon, and the consistent view among them is that there must be criminal prosecutions brought against the various elements of BP that knowingly cut safety corners to increase the bottom line. Some have even gone as far to suggest that actions should be taken to make willful negligence that leads to large scale eco disasters crimes against humanity. However, the one thing that I haven’t heard much about is what to do with the regulators. This is understandable as US regulatory policy is not the sexiest topic of conversation, but as we are finding out, having broken regulatory systems is simply a luxury that the United States can no longer afford. There are two ways that a regulatory system can be broken; by not being given any bite by the legislators that create it, or by lacking proper leadership within the bureaucracy leading to an environment of incompetence and corruption. The tragedy in the gulf is a case of the latter.
The Minerals Management Services (MMS) is a division of the department of the interior. The job of the MMS is to sell the United States’ rich mineral rights, and to provide oversight to those that harvest them. In Sepember of 2008 the New York Times wrote on three reports presented to congress that focused on multiple scandals and severe ethics violations that took place at the MMS, these included sexual relationships and drug consumption between staff, questionable contracts being directed to former employees, top officials accepting gifts from the energy sector, multiple sexual relationships between employees of the MMS and their energy sector contacts, and (I actually had to read this paragraph twice because I could not actually believe it the first time through) allowing energy companies to revise their bids AFTER they were awarded drilling rights without reinitializing the bidding process.
Had the failings at the MMS been simply related to the selling of mineral rights, things would have been somewhat fine, very banana republicesque, but fine. But they weren’t, and now things aren’t. As mentioned above the other job of the MMS is to provide regulation to those extracting minerals, a job that they were pathetically incompetent at. It may be hard to believe this, but only 10 days before the disaster on the deep water horizon, the rig passed an MMS safety inspection, the same rig that had a DEAD BATTERY in the valve control. The MMS actually signed off on an environmental impact analysis that a spill on the Deepwater Horizon would result in “no significant impact” to the regions wildlife and fisheries. I just want to repeat what BP told the MMS, and what the MMS signed off on. “NO SIGNIFICANT IMPACT”. Unlike the regulators at the SEC in the days leading up to the 2008 crash, where they lacked the understanding of what a worst case scenario would be, the MMS had full knowledge. In a great piece over at Rolling Stone, they write
In May 2000, an environmental assessment for deepwater drilling in the Gulf presciently warned that “spill responses may be complicated by the potential for very large magnitude spills (because of the high production rates associated with deepwater wells).” The report noted that the oil industry “has estimated worst-case spill volumes ranging from 5,000 to 116,000 barrels a day for 120 days,”
The problems at the MMS can be traced back to the very nature of how western bureaucracy functions and after this oil spill is cleaned up, the MMS will most likely be split up and overhauled. But that just treats a symptom of a greater disease that may have infected many other branches of the federal bureaucracy. When a company acts with disregard for the rules they get fined. When a politician ignores his responsibilities, he is removed in the next election. Even in the academic setting, professors must publish or perish. But what penalties are there for a branch of the government that no one knows or cares about until it is too late? Work must be done by the federal government to create an overarching set of rules that apply to all regulatory branches of the government must be held to some form of professional accountability. Shouldn’t the people who enforce laws designed to prevent billions of dollars of society be expected to be guarded from corruption and incompetence? One idea would be to create departments of internal affairs that are hired through the inspector general’s office, and placed within different regulatory branches. This would guarantee both arms length separation, as well as access to the legal mechanisms needed to fix problems of corruption, and maybe even gross incompetence.
As I was writing this article, I was reading through my girlfriend’s favorite graphic novel, Watchmen, and thought the question ‘who watches the watchmen’ very apropos . That question comes to late the case of the MMS, and now we must ask who hangs the hangman.