Sex, Drugs and Oil?

Well the oil and gas industry is finally sexy! Unfortunately, it’s the sleazy variety that mixes sex for government deals.

The Interior Department revealed that “more than a dozen employees accepted gifts including ski trips, sports tickets and golf outings.” The investigators also “discovered a culture of substance abuse and promiscuity.”

The report also said that Gregory W. Smith, former director of royalty programs, had set the code of conduct by arranging deals that earned him $30,000, having inappropriate relationships with subordinates, and buying cocaine from another employee.

The case illustrates the problems when corrupt executives set the moral and ethical tone for an organization. One would hope that the implicated employees are terminated rather than given hand slaps.

The situation reveals an all too common problem where regulators and companies become too cozy. Most credible industry analysts would dispute the necessity of socializing to get industry intelligence. I doubt the pillow talk involved in-depth discussions of supply-demand fundamentals, the impact of futures speculation on prices, and the influence of rising demand in China and India.

On the positive side, maybe we will soon be watching a series on Fox. Come to think of it wasn’t there a show called “Dallas?’