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After a week grilling oil executives over what caused the Gulf of Mexico oil spill, lawmakers are setting their sights on government regulators next week.

They'll be asking the watchdogs about just what kind of role they had in approving the ill-fated drilling operation, and why they weren't better prepared to deal with the disaster.

High on lawmakers' hit list is the Interior Department's Minerals Management Service, the agency that issues permits for offshore drilling. The agency has been hammered by critics ever since for lax oversight and a cozy relationship with the oil industry.

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An eye-opening series of reports in fall 2008 by the Department of the Interior’s inspector general disclosed a stunning level of corruption at the Minerals Management Service (MMS), and a coziness with industry officials that included a “culture of substance abuse and promiscuity” at the agency.

The inspector general concluded that officials in the MMS Royalty-in-Kind program “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.” The IG said that one-third of Royalty-in-Kind officials were taking bribes and gifts, and noted that former MMS officials received contracts from their friends still in the department. Out of 718 bid packages awarded by MMS between 2001 and 2006, 121 were modified by the agency — and all but three of the modifications benefited the oil companies.

The Government Accountability Office has issued recommendations to make MMS more efficient in gathering revenue, but they have yet to be implemented.

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President Obama may make a major proposal: breaking up the Minerals Management Service into two agencies. One of the agencies will continue to oversee the granting of leases or chartering of resources for exploration and extraction. The second agency, separate entirely from the first, will serve as a the government policeman overseeing industrial activities.

The MMS is famously corrupt and broken – taking away enforcement power from the part of the agency that is most prone to being (literally, at times) in bed with the oil and extraction industry is a part of a much-needed change.

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