A state auditor’s investigation reports that a regulator and his supervisor in the California Department of Conservation appeared to be fast-tracking drilling or other permits to oil companies while the employees concealed their investments in the same companies and took favors from them. Yet the audit, released last week, does not name the employees or even the companies involved.
It appears the conflicts existed for at least a few years, hinting at a culture of coziness and possible broader corruption in the state’s dealings with the oil industry. However, there is no way to find out unless names, times and places are made public.
The Foundation for Taxpayer and Consumer Rights has filed a Public Records Act request calling for release of the details of the investigation. In addition, FTCR called for a broader investigation by the auditor of the state’s dealings with the oil industry.
Consumers were rightly suspicious last year when a state ‘investigation’ of oil company and refiner gasoline pricing unbelievably found no evidence of gouging, even as prices rose to a record $3.38 per gallon. If overt collusion is suspected in issuing drilling permits, a pall is cast over other state dealings with oil companies, including the California Energy Commission’s clueless inability to see specific causes of price spikes, or to critically evaluate refiners’ wholesale shutdowns for ‘maintenance.’
The state auditor’s investigation found that a Conservation Department employee concealed his stock holdings in two regulated oil companies and solicited their donations to a charity for which his wife worked. At the same time, the employee was fast-tracking oil drilling permits, even warning one company to hurry its request because of environmental problems involving the company.
The audit said of that case: "The employee should have been been protecting the state’s interests by reviewing the proposed projects for engineering soundness and conformity with state laws. Instead, it appears that he and his manager may have been more concerned with Company A’s financial interests."
The employee’s supervisor also held stocks in regulated companies and took gifts from them, the audit said. Neither employee had, as required, disclosed the stock ownership. This case is too important to Californians to hide under a cloak of anonymity. The auditor’s referral of the case to the attorney general and the Fair Political Practices Commission is proof enough that this is not just a disciplinary or personnel matter.
A culture that would allow such blatant self-interested dealings on drilling permits, including assistance in fending off environmental violations, may not be confined to one or two people. The public needs to know who was involved and their job histories. Did either of the employees previously work for an oil company, or is either of them about to retire and hoping for a cushy new job in the industry?
FTCR noted that it took the action of a whistleblower in local government, also unnamed, to prod the state to act, according to the Bee. This points to a culture of silence inside the office of chief regulatory agency, the group added.
Consumers are being hammered by indefensibly high gasoline prices while a regulator grants oil companies favors that increase their profits. The state auditor, in a case of this gravity, should not cloak its report in anonymity or call the matter closed.