While British Petroleum has been taking most of the heat for the oil spill disaster in the Gulf of Mexico – and rightly so – there are new shocking reports of the lack of regulation and massive incompetence within our own government.

The Mineral Management Service, an agency under the Department of Interior, issues lucrative drilling leases to energy companies and then collects oil and natural gas royalties from the leases of taxpayer-owned land.

That's no small chunk of change. The royalty revenue from the leases amounts to more than $8 billion a year, making it the U.S. government's largest nontax source of revenue.

Now, with oil polluting our shores every second, the MMS finds itself entangled in the controversy. This is nothing new for the agency. In 2008, reports on alleged misconduct over nearly four years were presented before Congress. The infractions involved more than a dozen current and former employees and detailed a freewheeling "culture of substance abuse and promiscuity."

Under this "culture of abuse," the report detailed MMS employees improperly accepted bribes and gifts from oil company employees, frequently consuming alcohol at industry functions, using cocaine and marijuana, and having sexual relationships with oil and gas company representatives.

It was reported that out of 718 bid packages awarded by MMS between 2001 and 2006, 121 were modified by the agency – and all but three of the modifications benefited the oil companies. The inspector general said that these relationships and the sloppy administration at MMS have cost taxpayers $4.4 million in late collection fees.

Now, with the nation in the midst of its greatest environmental crisis ever and public anger growing, new allegations about the cozy ties between MMS and the oil and gas companies have again surfaced.

Oil companies were even allegedly allowed to submit their own data and MMS took them at their word. As one example, MMS inspectors allowed the oil companies to fill out their own reports in pencil and they would then trace over them in ink.

After the 2008 probe, one MMS official pleaded guilty to a felony conflict-of-interest charge and was sentenced to two years of probation and a $2,500 fine. Two other officials retired for unknown reasons.

As the wrangling continues over liability in the massive ecological disaster off the Louisiana coast, we can expect a great deal of finger-pointing, from the highest office in the land to the most obscure agency. The Obama administration shouldn't have to look far, however, to find ways to streamline government bureaucracy and save taxpayers some money.

With over 1,300 organizations spread across all three branches of federal government, it's a good bet that the MMS isn't the only mismanaged agency in our bloated government system.

By Jim Zbick

jzbick@tnonline.com