New drilling chief promises balance

[July 12, 2010]  WASHINGTON (AP) -- The former federal prosecutor who now heads the government agency that oversees offshore drilling says he is not afraid to fine lawbreaking oil companies or even put some executives in jail.

But Michael Bromwich says he is not an anti-drilling zealot and will probably take actions that upset both industry groups and those who oppose drilling in the Gulf of Mexico and other sites.

"I don't have an agenda on this at all. I come at this straight down the middle," Bromwich told The Associated Press in his first interview since being sworn in last month as head of the Bureau of Ocean Energy Management, Regulation and Enforcement.

"I'm not going to say you can't drill, but I'm not going to say you should drill and ignore safety and the environment," he said.

The drilling agency, which both regulates the oil and gas industry and collects billions of dollars in royalties from it, was known until last month as the Minerals Management Service. The agency has long had a reputation for a cozy relationship with oil companies and lax oversight, and its new name is intended to serve as a fresh start. The name change took effect the day Bromwich was sworn in.

Two scathing reports by a federal inspector general highlighted drug use and sex among agency employees and industry executives, and said drilling regulators have accepted gifts and trips from oil and gas companies and even negotiated to go work for the industry while overseeing it.

The once-obscure agency was thrust into the spotlight after the deadly explosion of the Deepwater Horizon rig off the Louisiana coast in April, and the subsequent oil spill that has dumped as much as 170 million gallons of crude into the Gulf of Mexico. The former MMS director was forced out May 27 amid concerns she was not moving fast enough to implement reforms.

Bromwich, 56, had no previous experience in the oil and gas industry before taking over the 1,700 employee agency three weeks ago. Still, he said he understands that offshore drilling is "an energy reality for us for the foreseeable future. Anybody who tries to stop that dead in its tracks is, I think, blinding themselves to the realities of what we need in order to make this country run and keep our economy going."

At the same time, he added, "We've just seen the incredible economic and human tragedy that's caused when the values of safety and regulation and environmental protection are not observed adequately, and when there is too much of a rush to drill, even when it is not safe."

Interior Secretary Ken Salazar has proposed restructuring the agency into three parts to avoid conflicts of interest. One division would focus on energy development, another on safety and enforcement and a third on revenue collection.

Bromwich said he hopes to work with Congress to sharply increase the number of drilling inspectors. Salazar recently told a Senate hearing he wants to quintuple the number of inspectors, from 62 to more than 300.

The number represents a drastic increase from Interior's budget request, but Bromwich said he believes Congress will be receptive.

"I think there's a real acknowledgment we need more inspectors now," he said. "There's no time to wait."

One way to do that is to recruit top graduates of petroleum engineering schools to join the agency. While government cannot match industry salaries that start at more than $80,000 a year, Bromwich said he hopes to boost pay for inspectors that now ranges from about $39,000 to $75,000 a year in Louisiana.

Just as Justice Department lawyers sacrifice higher salaries for a career in public service, Bromwich said he hopes to convince young engineers of the value of working "to ensure safe and environmentally sound drilling to move us into an energy future. I would think that would be appealing to people."

Defense attorney E. Lawrence Barcella, a former federal prosecutor, called Bromwich "extremely bright and almost compulsively thorough" and said his lack of experience in the oil and gas industry should not hamper Bromwich in his new job.

"As a white-collar lawyer, you've got learn new things in every investigation you do," Barcella said, calling Bromwich one of the best investigators he knows.

Industry executives and agency employees alike should prepare for a bulldog who sets high standards and expects others to meet them, Barcella said. "Whatever standard he sets is going to be black and white so they better meet it," he said.

A graduate of Harvard Law School, Bromwich was inspector general at the Justice Department from 1994 to 1999 and served from 2002 to 2008 as the independent monitor for the District of Columbia's police department, ensuring compliance with civil rights and other laws. He also led investigations into the Houston police crime lab and the FBI's conduct in the Aldrich Ames spy case.

Bromwich, whose Interior Department office is cluttered with boxes and framed pictures not yet hung on the walls, said he approaches his new job as a lawyer and investigator. One of his first actions was to create an internal investigations team to help him improve the agency's performance. The team would coordinate with Interior's inspector general to probe allegations of wrongdoing in the industry as well as among agency employees.

From his days at Justice, Bromwich said he learned that if you catch people at wrongdoing and punish them -- even put them in jail -- "there's a tremendous deterrent effect, not only on that company but on others."

His message to oil companies is direct: "We're going to jump on evidence of violations."

Word will spread quickly that the agency is more willing than in the past to issue fines and even jail terms for those who break the law, he said. "But if companies follow the rules and don't make misrepresentations and false statements they have absolutely nothing to fear from me."

That same message applies to his own employees, Bromwich said.

While some critics have urged mass firings, Bromwich said he does not intend to clean house at the drilling agency, which has offices ranging from Washington to Louisiana, Texas, Colorado and Alaska.

"The risk of saying 'off with their heads' across the board is you risk losing a tremendous amount of knowledge and expertise," he said. "But the truth is if people don't get the message that we are really stressing regulation and enforcement to an unprecedented degree they will have problems with me. There's a reason why we renamed the agency and put regulation and enforcement in the name."

[Associated Press; By MATTHEW DALY]

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