As Captain Renault
would have said "Shocked, I'm Shocked!" to learn that government officials involved in regulating the oil industry were being accused of corruption. Thirteen employees of the Department of Interior that handle the money that oil companies pay in royalties for drilling on federal lands are thought to have accepted gifts, consulting jobs and sex in exchange for rigging contracts. The employees working in Denver and Washington were responsible for handling "in-kind" royalty payments. Under this program, energy companies gave the government oil and gas rather than cash. The Interior Department then turns around and either re-sells the oil and gas or adds it to the strategic petroleum reserve. The oil and gas are sold back to energy companies to get the cash. This of course seems like a system that's doomed to be corrupted. If oil companies give petroleum to the government and then buy it back instead of just giving the cash in the first place, the opportunity to skim off the top is created. The Interior Department got $4.3 billion in such payments in 2007. Thanks to Dave for the tip!