"Last month, the Interior Department's inspector general, Earl E. Devaney, told the House Natural Resources Committee that he was disappointed that two now-retired employees -- former oil royalty office chief Gregory W. Smith and former associate director Lucy Querques Denett -- were not prosecuted.

Investigators allege that Smith, 56, was among a group of more than a dozen employees who took gifts from clients; was involved in illicit sexual relationships with subordinates; purchased cocaine at his office; and arranged improper outside consulting deals that allowed him to earn more than $30,000.

The inspector general's reports also accused Denett, 55, of improperly arranging a million-dollar deal for two retired employees, both of whom have pleaded guilty to federal conflict-of-interest charges. Denett and Smith have declined to comment on the reports.

In a letter (PDF) to House Judiciary Committee Chairman John Conyers Jr. (D-Mich.), the attorney general's office said it lacked evidence in one case and "reviewed" the other case before deciding not to prosecute either Denett and Smith.

"Department prosecutors agreed with the DOl IG agents that there was insufficient evidence of criminal misconduct to support a prosecution with regard to one matter," wrote Keith B. Nelson, the principal deputy attorney general. "After consultation with the DOl IG, thorough investigation, and careful review by experienced career prosecutors in the Criminal Division's Public Integrity Section, we declined further action on some matters.""

Get the Story:
Investigations: Justice Says It Lacked Evidence to Charge Federal Oil Royalties Officials (The Washington Post 10/22)
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OIG Reports:
Gregory W. Smith | MMS Oil Marketing Group - Lakewood | Federal Business Solutions Contracts

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