Head of agency overseeing offshore drilling quits

WASHINGTON Thu May 27, 2010 3:27pm EDT

WASHINGTON (Reuters) - The head of the embattled Minerals Management Service that oversees U.S. offshore oil drilling quit her job, Interior Secretary Ken Salazar announced on Thursday.

Liz Birnbaum leaves an agency tainted with scandal and incompetence, with its workers accused of having a cozy relationship with the oil companies they regulated.

MMS workers accepted gifts, had sex and did drugs with employees of the oil companies they were supposed to keeping an eye on, according to government officials.

Many U.S. lawmakers and environmental groups say the lax regulation by MMS of offshore drilling was partly to blame for the explosion last month of the Deepwater Horizon drilling rig leased by BP.

Salazar previously announced he would break up the agency into three divisions: one to collect royalties from oil companies drilling on federal leases, one to lease the federal tracts and one to inspect drilling rig and production platforms to enforce regulations and ensure they were operating safely.

The Friends of the Earth environmental group called Birnbaum's departure a "scapegoat firing," but Salazar said she resigned on her own.

Birnbaum sent a short two paragraph resignation letter to Salazar on Thursday morning.

Representative Nick Rahall, the chairman of the House Natural Resources Committee, said Birnbaum's departure does not "address the root problem" at MMS or the need for better regulation of offshore drilling.

"She has only been the public face of MMS for 11 months and the most serious allegations occurred prior to her tenure. This might on the surface be a good start but must not be the end game," he said.

(Reporting by Tom Doggett; Editing by Marguerita Choy)

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