PUBLISHED 9/24/08 ----

The inappropriate exchange of money and favors between representatives of the oil industry and the U.S. Department of the Interior led to one of this country’s most memorable scandals.

Kickbacks and questionable loans from oil executives worth $5 million in today’s dollars led to the downfall and ultimate imprisonment of the Secretary of the Interior in the Teapot Dome scandal of the 1920s. Had President Warren G. Harding not died before the scandal fully revealed itself, he no doubt would have paid dearly at the polls. As it was, the scandal (which prominently involved the Elk Hills oil field near Bakersfield) marred Harding’s legacy irreparably.

But in the context of the battered George W. Bush presidency, a scandal with similar overtones barely rates raised eyebrows.

Officials from the Interior Department’s Minerals Management Service, which oversees collection of billions in annual royalties from oil and natural gas drilling on federal lands, accepted gifts from and had sex with oil company contacts, according to the agency’s inspector general.

Now, Congress is asking representatives of Royal Dutch Shell Group, Chevron Corp. and Gary-Williams Energy Corp. what their top executives knew about gifts and inappropriate relationships with Interior Department officials.

This sort of scandal might be a shock under any other president, but given the Bush administration’s close, longstanding relationship with the oil industry, and its record of dubious governance on many fronts, it’s really just business as usual.

Consider these scandals and improprieties, from the Department of the Interior alone:

•  Former Deputy Interior Secretary Stephen Griles is currently serving time in prison for lying about being the “guy in Interior” who answered to felonious super-lobbyist Jack Abramoff.

• Former Deputy Assistant Secretary Julie MacDonald resigned for “personally reversing scientific findings, changing scientific conclusions to prevent endangered species from receiving protection, removing relevant information from a scientific document, and ordering the Fish and Wildlife Service to adopt her edits,” according to a Union of Concerned Scientists report. She also gave internal documents to oil companies and property rights groups.

• Two Interior Department employees have pleaded guilty in recent days to fixing bids. Most recent was Milton K. Dial, the Minerals Revenue Management division’s former deputy associate director. Dial arranged a contract for a former colleague and then took a job with that colleague within six months of his retirement, a violation of restrictions on such behavior.

• The Interior Department continues to allow two dozen oil companies to produce oil in the Gulf of Mexico without paying billions of dollars in royalties. Among those leading the way: Kerr-McGee, which at one point sought an astounding $28 billion in royalty relief from the government over a five-year period.

And the Interior Department would be in charge of supervising oil companies’ proposed expansion of offshore drilling operations? Scary.

First, we deserve to know more about oil companies’ degree of infiltration into the federal agency that’s supposed to be extracting royalties from this most profitable of industries.

Congress seems prepared to start asking. Rep. Edward J. Markey , D-Mass.,  the chairman of the U.S. House Select Committee on Energy Independence and Global Warming, wants to know:

• Did senior oil executives know employees were providing gifts to their counterparts at the Department of the Interior?

• Did top company executives instruct any employees to insinuate themselves into “inappropriately close relationships” with Interior officials?

• Did the oil companies set aside money to buy gifts for government employees, or any Bush administration officials?

New, pending legislation orders the Secretary of the Interior to initiate robust ethics training programs and puts in place a strict gift ban for government employees. Worthy of approval? That would seem to be a given.

Royalties are one of the largest sources of revenue for the federal government after taxes. Giving it away in broad daylight is bad enough. Apparently the Interior Department gives it away when the lights go out, too. It’s a sorry new low for the Bush administration.