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Gulf oil spill: Is MMS so corrupt it must be abolished?

Lawmakers are looking at how to reform the Minerals Management Service (MMS), which oversees offshore drilling. Reports before and after the Gulf oil spill show it is deeply intertwined with Big Oil.

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In many respects, the industry is seen as calling the shots for the MMS. "Obviously, we're all industry," Larry Williamson, district manager of the Lake Charles MMS office, told investigators.

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As a result, "the culture of corruption is endemic," said Rep. Jim Costa (D) of California.

Efforts at reform had begun even before the Deepwater Horizon accident. Alarmed by a 2008 inspector general report that revealed sex and drug use at the MMS's Lakewood, Colo., office, the Obama White House had ended the controversial royalty-in-kind program and sent ethics coaches out to MMS employees.

Since the Deepwater Horizon blowout, Obama has outlined a plan to split the MMS into three distinct agencies to separate its $13 billion-a-year royalty arm from the permitting and inspection arm.

On Wednesday, Sen. Ben Nelson (D) of Nebraska introduced legislation to mandate a two-year waiting period between government and industry jobs in order to reduce industry influence on regulators. The legislation, called the Stop Cozy Relationships with Big Oil Act, would also make gift-acceptance, a key focus of the most recent MMS investigation, a felony with a possible 15-year prison sentence.

The reality, however, is that the MMS needs industry expertise to properly manage America's oil riches, says Inspector General Kendall.

"We can't govern human behavior by regulation or rule, but if you can be very specific in terms of the expectations and be clear about those, I think we'll be in a much better position," she said.

IN PICTURES: Louisiana oil spill