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By John Donovan of October 2009

Shell senior management pretends that it stands resolutely behind the anti-corruption pledges in the Shell General Business Principles.

This scandal had it all; bribes, drugs, sex and oil. As can be seen from the supporting evidence and articles below, Shell was a prime sponsor of the immoral and illegal activities, which also breached Shell’s claimed ethical code. Further proof that Shell General Business Principles are a complete fraud.

The Minerals Management Service (MMS) of the U.S. Department of The Interior and the Office of Inspector General initiated an investigation in 2006 after receiving allegations from a confidential source that improprieties were occurring within the Royalty in Kind Program (RIK). The following extracts in italics, not necessarily in original order, are taken directly from the official report.

In e-mails we retrieved from computer hard drives and network servers, we found numerous indications that many of the events that RIK employees attended with industry officials were purely social. For instance, e-mail from Shell Pipeline Company representative to RIK employee Crystel Edler, regarding attending “tailgating festivities” at a Houston Texans game, stated, ”You’re invited have you and the girls meet at my place at 6am for bubble baths and final prep. Just kidding…”

The Shell Pipeline Company representative’s previous e-mail inviting people to the event was laden with sexual innuendo such as, “We’ve always provided the patrons with beer on demand, but the ever-depleting supplies have dwindled beer storage to dangerously low volumes on occasion…. Although it’s a given that the horsemen will indeed ‘bring the meat to the table.’

In 2004, Shell provided Leyshon with lodging and paid for her ski costs in Keystone, CO. She also admitted to having a “one-night stand” with a Shell employee. She stated that this employee did not prepare Shell’s RIK bids. Leyshon told investigators that she ”had a hit every once in a while in reference to her use of marijuana but noted that this never occurred at the MMS office.

When interviewed, Michael Faulise, Director of Marketing for Shell Exploration and Production Company (Shell E&P), stated that he had worked for Shell since 2000… When asked, Faulise stated that he was unable to recall Leyshon ever paying for any lodging or meals provided by Shell.

We interviewed a senior crude oil trader for Shell Oil Trading Company regarding his relationship with Stacy Leyshon pursuant to a DOJ proffer agreement. The senior trader said he had heard Leyshon and Edler referred to by other Shell employees as the “MMS Chicks” who often drank too much and conducted themselves in an unprofessional manner.

In addition, our investigation disclosed that in 2004, Greg Smith became concerned that an RIK employee might have released confidential pipeline transportation rates to Shell. Apparently, a company official from Poseidon Oil had called Smith to complain that Shell had learned of the confidential transportation rate that Poseidon had negotiated with RIK. We also discovered emails sent among RIK Staff where Edler admitted to talking to “Mike” (Faulise) about the Poseidon deal. On May 6, 2004, Smith sent an e-mail to several RIK marketers including Edler that stated, “I have heard the details of our agreement with Poseidon … including the actual rate we agreed to … was communicated to Shell. If true, this ran counter to our promise to Poseidon to keep this information confidential.”

Edler admitted that she had used cocaine “in the past,” most recently in 2005. However, she claimed that she never used cocaine during business hours and that she never used cocaine with any MMS employees or industry representatives.

We interviewed Mike Faulise, Barbara Layer, and Alan Raymond of Shell, who all confirmed that Edler was an RIK employee they dealt with on both a professional and social basis. Both Faulise and Layer remembered her attending the annual Shell outings. During Faulise’s interview, we showed him a February 2004 e-mail he wrote to Edler stating, “Nobody will say anything about you being here for the night. As far as I’m concerned, you were in a hotel.” Edler responded, “ are sooo wonderful You know how much I totally adore you.”

Shell managers used immoral tactics directed against employees of a U.S. government department to seek commercial advantage. This included obtaining confidential, commercially valuable information belonging to a third party. Déjà Vue All Over Again.



Sex, Drugs, and Rockin’ Oil

Are we surprised to find out that the U.S. government employees who oversee offshore oil drilling turn out to be literally and figuratively ‘in bed’ with the oil industry?  A compilation of news stories about this scandal.

by Sterling D. Allan
Pure Energy Systems News

None of us in the renewable energy sector are surprised by the scandal that was announced Wednesday involving sex and drug favors to the U.S. Department of Interior personnel overseeing offshore oil drilling.

This embarrassing illustration of the cozy relationship between the Bush administration and the oil industry is now paraded before the world.  This unveiling of the wizard behind the curtain can be a positive thing for the quest to move toward renewable energy sources.

The day prior to the report’s release, President Bush had a private lunch with Interior Secretary Dirk Kempthorne, the man in charge of the agency at the heart of the scandal.  To be a fly on the wall during that meeting . . .

The allegations of scandalous behavior involve a dozen or so government employees in Denver and Washington.  Their task is to sell U.S. mineral rights to oil companies — contracts worth eight billion annually, providing one of the government’s biggest sources of revenue besides taxes.

According to the inspector general, they rigged contracts, and engaged in illegal moonlighting, drugs, sex and gift-taking from oil company representatives.

The report allegations include:

* An employee who attended a so-called “treasure hunt” in the desert with all expenses paid by an oil producer.

* A former supervisor who bought cocaine from a colleague, then boosted her performance award, had sex with subordinates and steered government contracts to an outside business where he also worked.

CBS News reported that “no one – from the oil companies to the workers allegedly involved – provided a response today other than to say they cooperated with the investigation, or appropriate action will be taken.”


Shell Sex and Drugs Scandal

U.S. Department of The Interior: Office of Inspector General: Investigative Report of Gregory W. Smith (Redacted) 7 August 2008 Pages 1 to 22 (By accepting the Shell gratuities in fiscal years 2003, 2004, and 2005, and by accepting the GWEC .
gratuities in 2002, 2003, 2004, and 2005, Smith violated federal ethics regulations that prohibited accepting
items valued in excess of either $20 per occasion or $50 in total from one source in a given year. )

U.S. Department of The Interior: Office of Inspector General: Investigative Report of MMS Oil Marketing Group – Lakewood (Redacted) 19 August 2008 Pages 1 to 31

Denver Post: Sex, drugs alleged in oil deals: 10 September 2008 (Many of the alleged misdeeds occurred when Gale Norton was secretary of the interior. Now a general counsel with Shell in Denver, Norton declined to comment, even when asked to address the portion of the reports dealing with the department she headed.)

The Denver Post: Interior Dept, scandal: Sex, Drugs alleged in oil deals: 10 September 2008

CNN: Sex, drugs, gifts uncovered in government oil probe: 10 September 2008

The New York Times: Sex, Drug Use and Graft Cited in Interior Department: 10 Sept 2008

Reuters: US gov’t workers in oil industry sex, drug scandal: 10 September 2008 Sex, Drugs and Oil: 10 September 2008

Wall Street Journal: Federal Oil Officials Accused In Sex and Drugs Scandal: 11 September 2008 (The report named four companies — Chevron Corp., a U.S. unit of Royal Dutch Shell PLC, Gary-Williams Energy Corp. and Hess Corp. — as gift givers.)

BBC News: US oil agency rapped over conduct: 11 Sept 2008

Reuters: US Interior Secy ‘outraged’ by oil-sex scandal: 11 September 2008

USAToday: Oil brokers sex scandal may affect drilling debate: 11 September 2008

CBS News: Sex Scandal Taints Oil Drilling Debate: 11 September 2008

Daily Telegraph: US government staff ‘had sex and drugs with energy firm employees’: 12 Sept 2008

Baltimore Sun: Viewpoint: Sex, drugs and natural gas royalties: 17 September 2008

Reuters: US House hearing looks into gov’t oil-sex scandal: 18 September 2008

The Wall Street Journal: Lawmakers Assail Interior Over Scandal: 19 September 2008

Investigative Report of MMS Oil Marketing Group -Lakewood (Redacted) for U.S. Department of the Interior: Office of the Inspector General: 19 August 2008

Investigative Report of Gregory W. Smith (Redacted) for U.S. Department of the Interior: Office of the Inspector General: 19 August 2008

CNN: Whistleblower: Oil watchdog agency ‘cult of corruption’: 14 October 2008

New York Times: Eight Years of Madoffs: 10 January 2009

Shell in U.S. Gov. Sex, Drugs and Corruption Scandal: 24 January 2009 (John Donovan article)

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