Official Took Gifts from Oil Company, Misused Funds

A former Bureau of Land Management official is accused of misusing travel funds to attend the 2007 PGA Championship in Oklahoma as a guest of Williams Exploration and Production.

SANTA FE, N.M. (AP) — A former Bureau of Land Management official who oversaw one of the largest onshore mineral production areas in the United States for nearly a decade took gifts from an oil company and misused travel funds, according to details released Monday in a report from the U.S. Interior Department's Office of Inspector General.

The report, obtained by an environmental group through a records request, says former Farmington district manager Steve Henke took gifts from Williams Exploration and Production — golf tickets, lodging and meals — and solicited about $8,000 in donations from the company for his son's youth baseball teams.

Henke was also accused of misusing about $1,000 in BLM travel funds to attend the 2007 PGA Championship in Oklahoma as a guest of Williams E&P. In 2009, he attended the Masters Golf Tournament in Georgia with friends from the company but reimbursed them for some expenses. His annual financial disclosures did not mention any of the gifts, the report said.

However, investigators found no evidence of any corrupt or official acts Henke took to benefit the companies he oversaw.

Henke, who retired from BLM in May and was hired as the president of the New Mexico Oil and Gas Association, defended his record Monday and said no regulatory favors were exchanged with the industry.

"There was absolutely no quid pro quo of any sort, at any time during my tenure and that's really the bottom line," Henke told The Associated Press.

The U.S. attorney's office has declined to prosecute.

But environmentalists point to the case as another example of federal regulators being too cozy with the industry, akin to the government's relationship with BP prior to the Gulf oil spill.

"This IG report is a clear indication that conditions at BLM are just as bad" and allow "unethical activities when permitting onshore natural gas drilling," said Mike Eisenfeld of the environmental group San Juan Citizens Alliance.

The investigation into Henke started in 2009, but BLM state director Linda Rundell did not find out about it until Henke met with her at the end of April, four days after he was interviewed by the Office of Inspector General. BLM spokesman Hans Stuart said Rundell was "disappointed and angry" after meeting with Henke.

"BLM does not tolerate unethical behavior and as soon as the facts regarding this incident came to our attention we began addressing it right away," he said.

BLM employees undergo annual ethics training and Rundell issues reminders every quarter. Adhering to the agency's ethics policies are a key part of working for the agency, Stuart said.

Henke said he made a mistake by using travel funds for the first golf trip but he reimbursed the company for certain expenses from the second trip and that it was more than a dozen other children and coaches, not only his son, who benefited from the donations for the baseball teams.

Henke said his professional, personal and civic responsibilities often overlapped while he was district manager.

"That's part of living in a small town with an economy that is dominated by the oil and gas industry. Those are the folks who support the schools and civic activities," he said, adding he had personal friends who worked with Williams E&P, one of the top five producers in the San Juan Basin.

Henke said he prided himself on being "fair and straight" and that he improved environmental compliance during his tenure.

However, environmentalists have been critical of the pace of development in the San Juan Basin, home to one of the nation's largest natural gas fields, and the management plan BLM officials have developed for the region.

"We think that the activities documented in the IG report are the tip of the iceberg and that the U.S. attorney for the district of New Mexico and Department of Justice need to conduct an immediate investigation on decisions made by the Farmington BLM office and the BLM New Mexico State Office," Eisenfeld said.