Friday, September 12, 2008

Chevron At the Center of Federal Coke Sex Scandal

By Chris Thompson
Fri, Sep 12, 2008 at 7:44 AM

Did Chevron employees snort coke and have sex with federal agents responsible for leasing land to them for oil exploration? A new report from the Interior Department's Inspector General comes tantalizingly close to stating exactly that. Hit past the jump for all the sordid details, direct from the federal report!

There's an obscure branch of the federal government known as the Minerals Management Service. One of its duties involves leasing land to energy companies, who will explore and drill for oil. With billions of dollars at stake, it's not exactly kosher for Minerals Management Service employees to be too cozy with oil industry representatives. But as the report claims, Service employees partied it up with oil company officials, who paid the tab on meals, drinks, paintball games, and trips to fancy ski resorts. Two Service employees even had sexual relations with oil company employees, including one Chevron official. As the report concludes, "Sexual relationships with prohibited sources cannot, by definition, be arms-length."

The two party girls at the heart of the Chevron piece of the scandal are Stacy Leyshon and Crystel Edler; they were both working at the Service's Royalty in Kind office, which determines how much oil the feds will get from leases they sign with oil firms. Leyshon's a real piece of work; although a supervisor with the Service, with almost twenty years of experience with federal ethical guidelines, she nonetheless accepted gifts from Chevron on 45 separate occasions; the gifts included meals, drinks, an "appreciation dinner," and a paintball outing. In addition, Shell Oil treated Leyshon and Edler to golf and ski weekends in Keystone, Colorado, where Leyshon and Edler got so hammered they couldn't drive. Leyshon admitted to having what she calls "one night stands" with a Shell employee and an employee of an oil firm whose name she couldn't remember. When Leyshon wasn't busy enjoying the hospitality of oil industry executives, she made a little extra money on the side by selling dildos and other sex toys at "Passion Party" events she organized. Leyshon even handed out her Passion Party business card at the office, a violation of federal guidelines.

Crystal Edler worked directly under Leyshon, and the two ladies lived it up on Chevron's dime. Edler received $2,715 in gifts from Chevron and other oil companies, on 61 separate occasions. In addition, Edler had a sexual relationship with a Chevron employee and a Shell employee, with the knowledge and consent of her boss Leyshon. Edler also admitted to using cocaine, although she denied using the drug with Chevron employees.

What did Chevron get in return for this, um, generosity? Here's one example: at one point, Chevron trader Jeff Brough was the man responsible for preparing Chevron's bids on federal lands available for oil exploration. Brough had made a serious error on a bid, neglecting to include transportation costs; in essence, he drastically underbid on the lease, and Chevron could have lost a fortune on the deal, costing him his job. But Brough took his sob story straight to Edler and Leyshon, and the two agents let him adjust the bid to include transportation costs after the fact. Federal investigators discovered that this practice was common in the Service, and the bid adjustments almost always favored oil companies at the expense of the federal government. After examining 121 amendments, federal officials concluded that these changes alone cost the government $4.4 million.

Not bad for financing a few days of margaritas and hitting the slopes! Chevron officials refused to fully cooperate with investigation, offering paper records but refusing to allow their employees to be interviewed. If you'd like to read the whole report, just click here.

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