As Interior Turns

An eight-year soap opera in which federal officials screwed the environment, the taxpayers, and each other.

  • Gale Norton

  • Jack Abramoff

  • J. Steven Griles


There's plenty in Washington for the new administration to clean up, but perhaps the biggest messes can be found in one agency: the Department of Interior. Over the last eight years — mostly between 2001 and 2005 — the agency charged with managing millions of acres of public land has been racked by scandal. During a veritable orgy of ethical lapses, federal coffers were deprived of oil and gas royalties, fragile species denied protection, and industry given yet more power to wreck public land in the name of greed. The questionable behavior was department-wide, but three major spheres of controversy stand out: The corruption around J. Steven Griles; the "Minerals Management Service Gone Wild" scandals; and Julie MacDonald's enthronement of ideology over biology. 

Some may dismiss the incidents as just a few bad apples spoiling the barrel. But the patterns suggest otherwise — in every case, either ideology or money or both were allowed to triumph over common sense. Former lobbyists and industry executives held too many top posts, and links to property-rights and pro-industry organizations were too strong. Interior Secretary Gale Norton was heavily involved in ideologically hard-right causes before she entered public service, and then went to work for the oil industry afterward. Griles was a lobbyist, Rejane Burton the former vice president of an oil and gas exploration company, and so on. In recent weeks, some of these same officials have "burrowed" into — or been shuffled around —- the agency, transformed from political appointees into career employees. That will just make this mess harder to clean up.

Here are some of the stars and other players — in As Interior Turns.

Once upon a time, Jack Abramoff was a very powerful lobbyist. He could raise money for himself (including millions of dollars in fees from his clients), and for others (more than $100,000 for the Bush campaign). He urged his clients — including various Western tribes —- to donate huge chunks of cash to politicians and to political appointees' pet organizations. In exchange, he provided enviable access to government officials. If this sounds corrupt, it's because it was, and Abramoff finally got caught and was convicted of defrauding Indian tribes and corrupting public officials. He brought plenty of folks down with him, including J. Steven Griles, a top dog at Interior, lobbyists and politicians. He never worked directly for the Bush administration (though they seemed to be working for him, at times), but he has become the primary symbol of the corruption by money of politics during the last eight years.

J. Steven Griles was a leading man in As Interior Turns, holding the number-two spot in the agency and ending up in bed with everyone from Jack Abramoff to the coal and electric power industry, to (literally) Italia Federici. He first worked for the feds in the 1980s under James Watt, at the U.S. Office of Surface Mining. In 1995, he founded J. Steven Griles and Associates, a lobbying group that eventually became part of National Environmental Strategies, another lobbying group that worked for the  mining and fossil fuel sectors. In 2001, he became Gale Norton's deputy. At the time, he signed onto a special agreement that allowed him to continue being paid (about $1 million) by his former lobbying firm, as long as he didn't meet with former clients; he did anyway. He hung out with officials from the National Mining Association, and pushed for looser mountaintop-removal mining standards. He met with Edison Electric Institute folks, and tried to ease federal clean air rules on power plants. All the fun came to an end when Griles was caught in Abramoff's sticky web — he helped Abramoff navigate Interior on behalf of his clients. Griles resigned in 2004, and two years later pleaded guilty to obstruction of justice. Though Griles is gone, his legacy remains: Mountaintop removal rules were recently eased up by the Bush administration.

Italia Federici was never a part of the Department of Interior, but her tentacles reached into the agency in more ways than one. Federici and Griles began a relationship in 1998, which continued in some form or another after Griles became Norton's lieutenant. Federici then served as a liaison between Abramoff and Griles; in return, Abramoff funneled at least $500,000 from his clients to Federici's charity, the Council of Republicans for Environmental Advocacy, which Norton helped start in the late 1990s. Federici pleaded guilty in 2007 to obstructing the investigation into Jack Abramoff.

Sue Ellen Wooldridge was Norton's deputy chief of staff and then counselor before being appointed Interior solicitor in 2004. Then in 2005 she became U.S. assistant attorney in charge of environment and natural resources. She also secretly dated Griles while both were working for the feds (they later got married). In 2005, Griles, Wooldridge and ConocoPhillips executive Don Duncan bought a $1 million beach house together. Wooldridge later gave ConocoPhillips extra time to pay millions of dollars in fines. She resigned under the cloud of scandal in 2007.

Matthew McKeown was yet another private-property-rights ideologue who moved into Interior in 2001, at the beginning of the Bush reign. As one of Interior's top legal eagles, he played a large — if unseen — role in getting the Bush agenda implemented on the ground. (He later moved to the Justice Department along with Wooldridge.) He had a primary role in the Healthy Forests Initiative, publicly bashed the Endangered Species Act, negotiated settlements that gutted the Northwest forest plan, and negotiated an agreement between Interior and the state of Utah making it easier for the state to control roads that cross federal land. As Bush prepared to leave office, McKeown was converted from a political appointee to a civil service post, meaning he'll remain in Interior under Obama.

­­Rejane "Johnnie" Burton was the director of the Minerals Management Services, the agency responsible for collecting billions of dollars of royalty payments from oil companies that operate on federal land. She oversaw MMS during a time when staff members were cavorting with one another and oil industry officials, and as energy companies skirted some $1 billion in royalties that should have gone into federal coffers. She resigned in 2007.

Donald Howard, Jimmy Mayberry and Milton Dial were all MMS officials during the Bush administration, and they all pleaded guilty. Howard accepted a hunting trip from an oil industry contractor, and Mayberry and Dial violated conflict-of-interest laws.

Greg Smith directed MMS's Royalty in Kind Program, which accepts oil and gas from energy companies in lieu of royalties for drilling on public land. The program was expanded in the late 1990s at industry's behest, after the straight cash royalty program was tightened up to prevent chronic under-collection from oil companies. The program is set up to have very little oversight. (The Government Accountability Office characterized it as operating under an "honors system.") Which was good for Smith, because he apparently had other things on his mind. A federal investigation revealed this year that during his tenure, Smith took drugs with and coerced subordinates into having sex with him. On one occasion, he pestered an employee for cocaine, settling finally for methamphetamines, which he snorted off a toaster oven. Smith also accepted golf outings, drinks and meals from employees of Shell, Chevron and Gary Williams Energy Corp. Meanwhile, he was moonlighting as a salesman for Geomatrix, an environmental services company that sometimes works for oil companies. From his MMS office, he made sales pitches to various energy companies — some of which he was supposed to be collecting royalties from — on behalf of Geomatrix, according to federal investigators.

Smith wasn't the only one with dirty hands in the Royalty in Kind branch of the Minerals Management Service. Federal investigators found that at least 1/3 of the staff were hanging out with and accepting gifts from oil industry folks between 2002 and 2006. At least one RIK staffer had a one-night stand with a Shell employee. During that same time, according to the GAO, the MMS could not account for the cost or benefits of the RIK program. Apparently staff was so busy taking ski trips and going to parties on the oil industry's dime that they forgot to keep track of whether those same oil companies were paying adequate royalties. In spite of these problems, Interior has tried to expand the program.

By the time she resigned in 2007, Julie MacDonald had become one of the most notorious of the many notorious Interior officials. MacDonald first came to Interior in 2002 as an advisor. Then, in 2004, Norton promoted her to the powerful post of deputy assistant secretary for fish, wildlife and parks. In just a few years, she did more to tinker with her own scientists' findings, and thereby derail protections on endangered species, than anyone in the history of Interior. MacDonald's subordinates suffered under her — she "bullied, insulted and harassed the professional staff," according to a federal investigative report — and she did the same to wildlife. The arroyo toad, white-tailed prairie dog, Preble's jumping mouse, Canada lynx, southwestern willow flycatcher and other species lost protection or critical habitat thanks to MacDonald. (The agency later reconsidered some of MacDonald's decisions.) She was also in cahoots with the conservative Pacific Legal Foundation and the California Farm Bureau, to whom she disclosed confidential info while at Interior.

E-mails reveal that MacDonald was working closely with Steven Quarles, a prominent lobbyist for forest, mining, agricultural and development interests, and former Interior official. One message from Quarles to MacDonald requested a meeting to "secure easy ‘yeses' to outrageous requests." Quarles continues to work with the Crowell and Moring lobbying firm, with clients such as the Village at Wolf Creek, Plum Creek, Anglogold and Rio Tinto.

A Government Accountability Office investigator testified to Congress that other Interior officials should have been examined as part of the MacDonald investigation, including Craig Manson, Brian Waidmann, Todd Willens and Randal Bowman. Though the three were never actually accused of wrongdoing, some did their part aboveboard to stick it to endangered species. Willens was once senior staff advisor to Richard Pombo, the notorious California congressman who attempted to gut the Endangered Species Act. While at Interior, he pushed to remove the Florida manatee and other species from endangered species protection. Willens left Interior in 2008 and — you don't say!? — became a lobbyist.

In spite of the fact that the most salacious scandals happened on her watch, former Interior Secretary Gale Norton has stayed above the fray. Bush appointed Norton, a one-time libertarian, protegee of James Watt and member of various right-wing think tanks, in 2001. During her years in Interior, the BLM issued drilling permits at a record pace. Norton favored drilling in the Arctic National Wildlife Refuge, voided critical habitat on millions of acres, increased the number of snowmobiles in Yellowstone, and so on and so forth. She resigned in 2006, just as the Abramoff/Griles connections were coming to light. Abramoff never directly rubbed off on her, but there are many links: Federici, for example, tried to arrange a 2001 meeting between Norton and Lovelin Poncho (Abramoff client and Coushatta tribal chairman). Eventually, the two met at a Council of Republicans for Environmental Advocacy fund-raising dinner that Abramoff helped coordinate. After leaving Interior, Norton went to work for Shell, and Dirk Kempthorne took her place. Most of the dirtiest scandals stopped after she left, but Interior has continued its questionable approach to the environment, stripping protection from endangered species, opening up 1.9 million acres to oil shale development, pushing through last-minute rules that favor industry, trying to lease thousands of acres for energy development -- even right next to national parks -- and blocking a congressional attempt to stop uranium mining next to the Grand Canyon.



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