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25–224 PDF 2017

EXAMINING GAO FINDINGS ON DEFICIENCIES AT 

THE BUREAU OF SAFETY AND ENVIRONMENTAL 

ENFORCEMENT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

THE INTERIOR, ENERGY, AND ENVIRONMENT 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MARCH 21, 2017 

Serial No. 115–3 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Jason Chaffetz, Utah, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Trey Gowdy, South Carolina 

Blake Farenthold, Texas 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 

Val Butler Demings, Florida 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Peter Welch, Vermont 

Matt Cartwright, Pennsylvania 

Mark DeSaulnier, California 

John Sarbanes, Maryland 

Jonathan Skladany, Majority Staff Director 

Rebecca Edgar, Deputy Staff Director 

William McKenna, General Counsel 

Melissa Beaumont, Professional Staff Member 

Kiley Bidelman, Clerk 

David Rapallo, Minority Staff Director 

SUBCOMMITTEE ON THE INTERIOR, ENERGY, AND ENVIRONMENT

Blake Farenthold, Texas, Chairman 

Paul A. Gosar, Arizona, Vice Chair 

Dennis Ross, Florida 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Stacey E. Plaskett, Virgin Islands 

Jamie Raskin, Maryland 

(Vacancy) 

(Vacancy) 

(III) 

C O N T E N T S 

Page 

Hearing held on March 21, 2017 ............................................................................ 1 

WITNESSES 

Mr. Richard T. Cardinale, Acting Assistant Secretary for Lands and Mineral 

Management, U.S. Department of the Interior 

Oral Statement ................................................................................................. 4 

Written Statement ............................................................................................ 6 

Mr. Frank Rusco, Director, Natural Resources and Environment-Energy 

Issues, Government Accountability Office 

Oral Statement ................................................................................................. 10 

Written Statement ............................................................................................ 12 

APPENDIX 

Questions for the Record for Mr. Richard Cardinale, submitted by Mr. 

Farenthold and Ms. Plaskett ............................................................................... 38 

Questions for the Record for Mr. Frank Rusco, submitted by Mr. Farenthold .. 45 

(1) 

EXAMINING GAO FINDINGS ON DEFICIENCIES 

AT THE BUREAU OF SAFETY AND ENVIRONMENTAL ENFORCEMENT 

Tuesday, March 21, 2017 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON THE INTERIOR, ENERGY AND

ENVIRONMENT

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The subcommittee met, pursuant to call, at 2:05 p.m., in Room 

2154, Rayburn House Office Building, Hon. Blake Farenthold 

[chairman of the subcommittee] presiding. 

Present: Representatives Farenthold, Comer, Plaskett, and 

Raskin. 

Mr. FARENTHOLD. The subcommittee on the Interior, Energy, and 

Environment will come to order. 

Without objection, the chair is authorized to declare a recess at 

any time. 

The chair notes the presence of our colleague—oh, we don’t note 

the presence of anybody because there is not anybody else here— 

there we go. 

The chair notes the presence of our colleagues from the full Committee of Oversight and Government Reform. We appreciate your 

interest in the topic and welcome your participation today. I ask 

unanimous consent that all members of the Committee on Oversight and Government Reform be allowed to fully participate in today’s hearing. 

Without objection, so ordered. 

Well, good afternoon. Today, our subcommittee is going to examine the management deficiencies that have led the Government Accountability Office, or GAO, to once again—and the Bureau of Safety and Environmental Enforcement, or BSEE as it’s known, to its 

high risk list. While this report notes that BSEE has made an effort to resolve some of the issues previously outlined by GAO, 

there’s still substantial room for improvement. And today we will 

explore the lingering issues in hopes that we can determine some 

comprehensive solutions. 

Before we got to these issues, I would like to thank the GAO and 

its staff for the hard work they’ve done in this issue area. And I’m 

especially glad to note that the GAO has a new report on the subject that it released just this morning. And I look forward to hearing more about that from Frank Rusco of the GAO appearing here 

today. Thank you for coming. 

2 

I would also like to thank Mr. Richard Cardinale, the acting Secretary for Lands and Minerals at the Department of the Interior. 

Mr. Cardinale is a career employee who has extensive experience 

in the Office of Land and Minerals. I’m also thankful that he is 

here today as well to provide this perspective from the last several 

years and shed some light on what’s going on at BSEE. Thank you 

for coming. 

Leadership seems to be a continual problem at BSEE since its 

formation after the Deepwater Horizon incident. Several whistleblowers, and now the GAO, have highlighted these issues. Data 

supports that GAO’s conclusion as the 2016 Employee Viewpoint 

Survey found that regional personnel scored BSEE’s leadership at 

42.7 out of 100. Current acting director Margaret Schneider, who 

spent 30 years at the Environmental Protection Agency before joining BSEE in 2010, has been specifically mentioned as one of the 

problems. 

The GAO has found a disconnect and, more importantly, a distrust between BSEE headquarters and its region. BSEE leadership 

has consistently hired contractors to try to fix its problem rather 

than using its own knowledgeable and experienced personnel. This 

distrust has caused significant duplication and reduced the agency’s efficiency. These problems are so deep that some regional staff 

were discouraged from talking with the GAO and some were even 

concerned about retaliation. 

Another problem facing BSEE is Integrity and Professional Responsibility Advisor, a group that exists to investigate allegations 

of misconduct and unethical behavior. This group follows unclear 

and inconsistent guidance, which appears to have undermined 

trust in its activities. Regional staff are concerned that this group 

is abusing its power and retaliating against employees, thereby deterring employees from speaking up and inhibiting agency transparency. 

These problems with leadership and trust have trickled down effects throughout BSEE’s portfolio. The GAO found a number of duplicative measures that have been fruitlessly implemented, which 

have resulted in a loss of valuable time and revenue. For example, 

BSEE hired two separate contractors to conduct simultaneous environmental risk assessments. This, unfortunately, resulted in two 

uncoordinated reports lacking quality. Had the two groups communicated with one another during their assessments, the final reports could have been substantially improved. Not only is this an 

inefficient way to run an agency, it’s a waste of taxpayers hardearned dollars. 

Despite these problems, I’m hopeful Secretary Zinke will ride in 

and be able to take a good look at the Bureau staff and put in a 

leadership team at BSEE to fix the divide between headquarters 

and the region. 

I’ll now recognize the ranking member, Ms. Plaskett, for her 

opening statement. 

Ms. PLASKETT. Thank you so much, Chairman. And thank you, 

gentlemen, for being here this afternoon. 

Nearly 7 years ago, an explosion on Deepwater Horizon offshore 

oil rig caused 11 crewmen deaths and leaked approximately 4.9 

million barrels of oil into the Gulf of Mexico. This spill caused imVerDate Sep 11 2014 14:44 Jun 13, 2017 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\VIC\25224.LOC 25224
3 

mense environmental and economic damage to the Gulf region and 

its residents for which BP paid out nearly $62 billion. 

A special commission was formed to investigate the explosion. 

The Department of the Interior Inspector General also investigated, as did Interior’s Outer Continental Shelf Safely Oversight 

Board. Each issued reports making a number of recommendations 

to Interior to ensure the safety of offshore rigs. 

The newly formed Bureau of Safety and Environmental Enforcement, or BSEE, was tasked with implementing these recommendations. Among other suggestions, the report recommended that Interior, quote, ‘‘develop an inspection program with strong representation at all levels of the bureau,’’ quote, ‘‘identify sufficient inspection coverage, including reassessing the risk space and self-inspection approaches, and conduct advanced planning of inspections to 

allow inspectors time to prepare for each inspection and ensure efficient use of resources,’’ end quote. 

Yet GAO, the Government Accountability Office, report released 

in 2016, 5 years after many of these recommendations were issued, 

found that BSEE continues to face deficiencies in its investigation, 

environmental compliance, safety enforcement capabilities, and 

that ‘‘undermine its ability to effectively oversee offshore oil and 

gas development.’’ 

Now, a year later, GAO has issued another report indicating that 

BSEE is not doing everything it can to protect workers. The report 

found, for example, that BSEE halted pilot testing of risk-based inspection initiative, which was developed in 2012, due to deficiencies 

that GAO attributed to mismanagement of initiatives from the beginning. Why? That’s why we’re here at this hearing to understand 

the why, what the problem is, and not merely just to state, for you 

to inform us of that, but also to give us recommendations to how 

we can help BSEE best carry out its mission. 

This initiative would have ensured the most dangerous rigs were 

inspected with more frequency and diligence, possibly saving lives. 

Workers lives are at risk, and BSEE must implement GAO’s recommendations soon. The findings of the inspector general and 

Oversight Board reports point to the important role of the Federal 

Government in protecting the lives of offshore oil workers. 

As our new President fulfills his campaign promise to lift the restrictions on the production of shale, oil, natural gas, and clean oil, 

those restrictions must not be worker safety regulations. And government agencies like BSEE must properly inspect drilling sites 

and stringently enforce the rules. This is particularly important 

given the Interior Department’s recent announcement that will 

offer 73 million acres offshore in the Gulf to new oil and gas developments later this year. We cannot afford BSEE not to do its job 

and ensure that American workers lives are safe. 

Thank you, Mr. Chairman. 

Mr. FARENTHOLD. Thank you very much. 

We’ll now recognize—first, I want to let you know that any member who would like to submit a written statement is welcome to do 

so in the next 5 legislative days for which I’ll hold the record open. 

We’ll now recognize our panel of witnesses. I’m pleased to welcome Mr. Richard Cardinale, acting Secretary for Lands and MinVerDate Sep 11 2014 14:44 Jun 13, 2017 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\VIC\25224.LOC 25224
4 

eral Management at the U.S. Department of Interior, and Frank 

Rusco from the GAO. Welcome to you both. 

Pursuant to our committee rules, all witnesses will be sworn in 

before they testify. Would you please rise and raise your right 

hands. 

Do you solemnly swear or affirm that the testimony you’re about 

to give will be the truth, the whole truth, and nothing but the 

truth, so help you God? 

Thank you. Please be seated. 

Let the record reflect that both witness answered in the affirmative. 

In order to allow time for discussion, we’d appreciate it if you’d 

limit your testimony to around 5 minutes. Your entire written 

statement will be made part of the record. You’ll see a timer in 

front of you that will count for 5 minutes. Green light means you’re 

good to go; the yellow light means hurry up, you’re about out of 

time; and the red light means stop. 

So I guess we’ll start with Mr. Cardinale. You’re recognized for 

5 minutes. 

WITNESS STATEMENTS 

STATEMENT OF RICHARD T. CARDINALE 

Mr. FARENTHOLD. You’re going to need to turn on your microphone, please, sir, and get real close. We bought the budget mics 

in order to save the taxpayers some money. 

Mr. CARDINALE. Can you here me? 

Mr. FARENTHOLD. You’re good now. 

Mr. CARDINALE. Okay. Mr. Chairman and members of the of the 

subcommittee, thank you for the opportunity to discuss leadership 

and management at the Department of the Interior’s Bureau of 

Safety and Environmental Enforcement. We appreciate the subcommittee’s interest in the efficient and effective functioning of 

government and the valuable service the GAO provides to that end. 

My name is Richard Cardinale and I am currently the acting assistant Secretary for Land and Minerals Management at the Department, stepping into this role as chief of staff for the assistant 

Secretary’s office. I have been the chief of staff to the assistant Secretary for Land and Minerals Management, the office that oversees 

BSEE, for the past 10–1/2 years. I was in my current position when 

the Bureau of Safety and Environmental Enforcement was established on October 1, 2011. We take seriously the insights and recommendations from the ten reports the GAO has issued concerning 

BSEE. 

BSEE has asked that the GAO consider the clarifications, updates, and new information the Bureau has provided in its response to the most recent draft report examining several of BSEE’s 

programs for offshore oversight and internal management. We appreciate that BSEE still faces challenges internally and how it develops and communicates management initiatives. The assistant 

Secretary’s office will continue to provide guidance to the Bureau 

to help address these challenges. 

Externally, we believe the Bureau has made great strides in effectively serving the American public and working productively 

5 

with the industry that it regulates, as well as our many stakeholders. During the past 5–1/2 years, BSEE has taken many constructive steps toward creating a stable and mature organization, 

while continuing to carry out its mission-critical goals of promoting 

safety, environmental responsibility, and resource conservation on 

the Outer Continental Shelf. 

In 2016, the Bureau approved over 700 permits and conducted 

over 20,000 offshore inspections. The Bureau also continues to have 

an unprecedented level of engagement with industry and other 

stakeholders to address the many recommendations made as a result of the investigation stemming from the Deepwater Horizon 

tragedy. Those investigations produced 11 reports, resulting in 353 

recommendations for industry, government, and others to improve 

offshore safety. Two hundred seventy five of the recommendations 

dealt with reforms to Federal oversight of offshore oil and gas development. 

Due in part to the Bureau’s hard work, the Department has addressed 217, or 80 percent of these recommendations. BSEE has 

also received a combined total of 93 recommendations, 37 from the 

GAO and 56 from the Department’s Office of the Inspector General. 

BSEE has been successful in closing 80 of these recommendations, 

including 29 from the GAO and 39 from the OIG’s New Horizon report. 

BSEE has also developed major safety and regulatory reforms 

that have contributed significantly to an improved safety culture in 

the offshore environment. BSEE is a relatively new agency with a 

critically important mission. It has been the subject of review by 

both the GAO and the OIG. Throughout these reviews, the Bureau 

has demonstrated a consistent commitment to responding thoughtfully to recommendations and to improving areas where—that were 

underdeveloped under its predecessor organizations. 

In an effort to assess its progress and address these and other 

challenges, in August 2016, BSEE engaged the National Academy 

of Public Administration to conduct an independent evaluation of 

the organization. The outcome of this study was made publicly 

available last Friday, and provides tangible steps that BSEE can 

take and has taken to improve its oversight, management, and 

communication capabilities. 

I thank the subcommittee for the opportunity to testify on behalf 

of the Department, and I’ll be happy to answer your questions. 

[Prepared statement of Mr. Cardinale follows:] 

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Mr. FARENTHOLD. Thank you very much. 

Mr. Rusco. 

STATEMENT OF FRANK RUSCO 

Mr. RUSCO. Thank you, Chairman Farenthold and Ranking 

Member Plaskett and members of the committee. I’m pleased to be 

here today to discuss our recent reports on the Bureau of Safety 

and Environmental Enforcement. 

Before I go into my formal written statement, I want to say that 

I agree with a lot of what Mr. Cardinale has just said, that over 

the years, BSEE has done a very good job of responding to numerous recommendations from a number of bodies, including GAO. 

Our most recent look at BSEE has been looking at their leadership initiatives and their restructuring process, and we have found 

serious deficiencies there, but that does not reflect a broad critique 

of what BSEE has been doing in the regions with its regional management and staff, who I think are doing, by and large, an excellent job. They’re hampered, though, by leadership failures, and 

that’s what I’m here to talk about today. 

In our last two reports looking at BSEE’s restructuring efforts 

and its leadership effectiveness, we have found a longstanding deficiency in the leadership in BSEE headquarters that has hindered 

its ability to effectively and efficiently administer its mission. 

BSEE leadership’s failure is primarily the result of its mistrust and 

poor communication with its knowledgeable regional managers and 

staff. Time and again, BSEE has chosen consultant studies and 

headquarters-led projects instead of in-house expertise and experience. This has cost the Bureau precious time and the taxpayer precious dollars to achieve very little of substance in the past 5 years. 

I have three examples from our past work that highlight BSEE’s 

repeated efforts to restructure the Bureau without adequately obtaining input and advice from its regional management and staff. 

First, BSEE has taken a number of steps to strengthen the permitting and planning process to ensure better well-designed drilling practices and oil spill response capabilities. And Congress has 

appropriated additional funds to enable BSEE to hire more inspectors. However, while stating the Bureau’s philosophy of creating 

national leadership of key BSEE missions, BSEE headquarters 

inexplicably moved its environmental compliance unit from a national to regional reporting structure and also left numerous congressionally funded environmental compliance positions unfilled for 

years, despite demonstrated need for these positions. 

These actions reduced the Bureau’s ability to share expertise 

across offshore regions, and left the Gulf of Mexico region without 

the environmental compliance staff needed to perform its oversight 

responsibilities. Instead of acting to fix these deficiencies, BSEE 

leadership spent over $1 million on consultant studies to assess environmental risk, rather than using the in-house expertise resident 

in BSEE’s regional offices. 

Second, in 2012, BSEE identified the need for performance measures to provide it with data, to evaluate the efficiency and efficacy 

of its programs and activities. Subsequently, BSEE began an initiative in 2014 to develop performance measures for its key programs 

by hiring a consultant to perform two sequential studies. These 

11 

contracts generated 12 recommended performance measures, delivered in 2016, none of which were implemented. 

In 2016, BSEE began what they described as a multiyear internal effort to develop performance measures. In December 2016, 

BSEE completed a report that identified 17 performance measures, 

but the Bureau has yet to finalize or implement these measures to 

inform management decisionmaking. 

What these three efforts have in common is a lack of 

implementable results and the fact that the efforts were done from 

headquarters largely without the benefit of the experience and talent within the BSEE regions. 

Third, starting in 2012, BSEE leadership sought to develop a 

risk-based inspection’s regime, but they did so without appropriate 

input and in consultation with the regional managers and staff, 

who for many years have been involved in previous attempts to 

identify risk factors and implement risk-based inspection practices. 

BSEE hired outside consultants to inform their approach to riskbased inspections.This 3 year contract led to a risk assessment 

model and inspection protocol that BSEE tried to implement in a 

pilot in 2015. However, the pilot failed to identify useful risk factors, and only after these deficiencies were identified did BSEE 

begin to involve the regional managers and staff. Even then, instead of working with regional managers and staff to develop a better model, BSEE leadership decided to change its focus and reduce 

expectations for its risk-based inspection approach. 

BSEE’s leadership, lack of trust, and communication with regional managers and staff again led to waste of taxpayer money in 

a still deficient risk-based inspection regime. 

I’m going to end there, and I would be happy to answer any of 

the questions you may have. 

[Prepared statement of Mr. Rusco follows:] 

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Mr. FARENTHOLD. Thank you very much. 

And I’ll get started with a couple of questions. Mr. Cardinale, I’m 

kind of troubled by the number that—the leadership on a national 

level only scored a 42.7, based on what the people in the field actually doing the work said. I mean, that’s an F minus. What’s—what 

do you attribute that to and what’s being done to fix it? 

Mr. CARDINALE. We don’t disagree with you on that score. I think 

part of the issue had been a lack of engagement with subject matter experts from the field. That, as I understand it, has changed. 

And specifically with Secretary Zinke’s leadership, who wants to 

empower and engage, as he calls it, people on the front lines, those 

who are implementing policy decisions and carrying out operations, 

we are—— 

Mr. FARENTHOLD. It had to be more than, oh, heck, they just 

don’t listen to me. What else have you found there? 

Mr. CARDINALE. Well, I can’t speak with any specificity to the 

reasons these employees gave, but I do feel that everything that I 

have seen suggests that we needed and we are now embarking on 

doing a better job of engaging employees and communicating with 

them, bringing them in early on in the effort. The Bureau has undertaken some leadership initiatives that are designed to bring 

people from the field into headquarters for detail opportunities, 

which we think will build trust and promote better communication. 

The Bureau is also in the process of developing a new intranet 

tool which is designed to post information more quickly and facilitate engagement sooner in the process. 

Mr. FARENTHOLD. Mr. Rusco, did you all find anything in particular, besides—you pointed out the excessive use of outside consultants. I used to work in radio, the staff used to never like the 

consultants. But what else did you see in there besides the overuse 

of consultants? And what generated this lack of trust in communications? 

Mr. RUSCO. Well, I think it just stems largely from just pure cultural differences and mistrust between the headquarters folks and 

the people in, particularly, the Gulf of Mexico. And the headquarters does not respect or trust them and does not listen to 

them. And when we 2 years ago started—or 2–1/2 years ago started 

doing this most recent work, we went and we said, well, we’re 

going to look at your management initiatives. And the response 

was, well, you’re going have to run through this liaison. Every 

piece of information you want has to be approved by the deputy director directly. 

Most of the things we asked for were deemed to be predecisional 

and not available to us to do our audit work. And these were things 

like years’ old consultant reports. 

Whenever we went to the Gulf and did our field work and we 

talked to people, there was a minder with us that was reporting 

back to headquarters, and that really cut back on what people were 

willing to tell us. And they told us that in private, afterwards. But 

they would not speak frankly and openly. 

Mr. FARENTHOLD. Was it a sense of a fear of retaliation and intimidation? 

Mr. RUSCO. There was a concern about that. 

27 

Mr. FARENTHOLD. Because this committee is committed to making sure that whistleblowers have the opportunity to report their 

problems and, you know, has shown a strong support for things 

like your GAO reports and internal inspector general’s—it’s pretty 

clear that the policy, at least of the government, at least coming 

out of this committee, is we want to hear from the rank and file 

folks that are doing the job. 

Mr. RUSCO. And I will say that, over the years, when we have 

gone into the field and talked to the people on the front lines, doing 

the work, we get straight answers, we get good information, and 

they tell us what’s working and what’s not. And that’s what most 

of our recommendations are based on. 

Mr. FARENTHOLD. Mr. Cardinale, I’m about out of time, but we’re 

talking a lot about the issues in the Gulf of Mexico region. I assume that’s the largest of your regions based on the bulk of offshore oil and gas activity. 

Mr. CARDINALE. That’s correct, Mr. Chairman. 

Mr. FARENTHOLD. Can you tell me about the basic sizes of your 

different—what your different regions are and the sizes? 

Mr. CARDINALE. I don’t have that information available to me. I 

do know that, in terms of specific number of employees, the organization numbers about 880 employees. About 140 of them are inspectors. Its largest region is in the Gulf of Mexico. There’s also a 

regional office in Camarillo, California, and one in Anchorage, Alaska. 

Mr. FARENTHOLD. Do you know how many of that 800 are in 

Washington, D.C.? 

Mr. CARDINALE. I don’t, but I’d be happy to—— 

Mr. FARENTHOLD. If you’d give me those numbers. I’d be interested. Again, it seems to me if your largest region only has, you 

know, 100 plus, we may be a little top heavy there too. It might 

be something worth looking at. But I don’t want to get that without 

the numbers. 

So at this point we’ll go to the gentlelady from the Virgin Islands 

for her line of questioning. 

Ms. PLASKETT. Thank you. 

You know, it was very interesting reading the GAO’s report, 

which paints still a troubling picture at BSEE of failing to properly 

implement programs. The report points to several instances where 

BSEE’s leadership failed to implement several key strategic initiatives to improve its internal management. What’s particularly troubling to read is that BSEE has not been able to make progress on 

approving its offshore safety and environmental oversight because 

of these deficiencies. 

Mr. Cardinale, in your written testimony, you state that BSEE 

is now fully staffed. If that’s so, when did that occur? 

Mr. CARDINALE. That’s occurred over the last couple of years. I 

think there are a culmination of reasons for it. BSEE has improved 

its recruitment and retention practices and has benefited from a 

full suite of tools to help recruit and retain employees. I think also 

the downturn in the market has resulted in the closure of a number of companies, and as a result, a number of employees have migrated from the private sector to the Federal sector. 

28 

Ms. PLASKETT. And so you’re also not maybe having the high 

turnover of employees leaving that you had previously? 

Mr. CARDINALE. That’s correct. 

Ms. PLASKETT. When you talked about the other achievements, 

you talked about retaining that technical expertise in the suite of 

availability. I know earlier you talked about the intranet services 

that you used. What are some of the other accomplishments that 

you believe BSEE has been able to implement? 

Mr. CARDINALE. I think BSEE is working to build its inspection 

force through investigating opportunities to create a certification 

program for training its inspectors. As I mentioned earlier, we are 

trying to foster engagement with the field at the earliest possible 

opportunities, including bringing people in from the field to get the 

benefit of their insight and expertise in the day-to-day operations 

of policy development. 

We are also just trying to foster better communication. At this 

time, there’s an offshore inspector’s conference going on in Lafayette, Louisiana, and the acting director is there now. This is the 

perfect opportunity to interact with the people in the field to get 

their perspectives, to better understand what challenges they are 

facing, and what we can do at headquarters to try to help address 

those challenges. 

Ms. PLASKETT. So you talk about this better communication. Is 

there something that is just going to be—how is this going to be 

implemented if what we understand is there’s a cultural difference 

between those at headquarters and those in the field? If you think 

that—you know, and I have great confidence in the charisma of our 

new Secretary of Interior, my former classmate, Secretary Zinke, 

but how do you believe that that is going to be able to drive it down 

into the regional levels? 

Mr. CARDINALE. I think the perspective of the administration is, 

in fact, to ensure that we are more efficient and more effective. 

And in order to do that, I think we need to engage, at the earliest 

possible opportunities, with the people that are in the field and 

give them the resources and the tools they need to do their jobs 

and to carry them out effectively. 

Ms. PLASKETT. And, you know, I’m sure this is something that 

you were trying to do 3 years ago. What is going to be different this 

time? Is it because of the new tools that you have? I really need 

to understand what has dynamically changed. 

Mr. CARDINALE. I think the management focus is fundamentally 

outward facing towards the field, more engagement with the people 

that are actually implementing the policies, and more engagement 

with them in the development of the policies. 

Ms. PLASKETT. Would that also be, Mr. Rusco, implementing 

risk-based inspections? Would that be part of the policies and procedures? 

Mr. RUSCO. I hope so. And I hope that what Mr. Cardinale says 

is correct. What we have seen is not that. We have seen the headquarters leadership staying in D.C., not engaging with the field, 

and not trying to learn what their business is about. And I think 

that that’s—— 

Ms. PLASKETT. So what kind of—you know, you give very concrete recommendations. Do you go as far as to say how many times 

29 

a year individuals from the headquarters should be out in the regional offices? 

Mr. RUSCO. No, we haven’t made that kind of specificity. 

Ms. PLASKETT. You did talk, though, in the risk-based inspection. 

How difficult should it be for BSEE to address the deficiencies that 

the report noted? 

Mr. RUSCO. It shouldn’t be that difficult. The BSEE inspectors 

and the management in the Gulf has been working on risk factors 

and on various iterations of risk-based inspections for years, since 

the 1990s. For a long time, they didn’t have enough inspectors to 

even do their annual inspections, so they didn’t have extra inspectors to go around and make additional risk-based inspections. But 

now that they’re staffed up in inspectors, they have the ability to 

do that. 

So it was puzzling to us when BSEE turned around after the 

model built by their consultant failed. Instead of fixing that model, 

they changed their focus and reduced the scope of risk-based inspections. We think that’s a mistake. 

Ms. PLASKETT. Okay. Thank you. 

I’ve run out of time. But, Mr. Chairman, I’m just hopeful that we 

will do an assessment of this in the months to come, and this will 

not be the only discussion we have with the witnesses today. 

Mr. FARENTHOLD. All right. I see we’ve got Mr. Raskin here. We 

don’t have anybody on our side. 

Do you have some questions you’re ready to go with? If not, I can 

do my second round and come back to you. 

Mr. RASKIN. Mr. Chair, if you would take your second round and 

come back to me, that would be great. 

Mr. FARENTHOLD. All right. That will give you a little bit of time 

to get settled. I understand. 

So I’ll toss this out to whichever one of you gentlemen wants to 

answer. BSEE was created in the wake of Deepwater Horizon to 

protect the Gulf from another environmental disaster. And riskbased inspection sounds like the way to go, and you have spent, in 

BSEE, a fair amount of money getting some expert input on what 

to do about risk based and what the risks are. I mean, it’s a pretty 

highly technical field.I imagine you could go to the safety folks that 

work at various competing companies. I’m assuming that’s how 

that was developed. 

Can you tell me a little bit about what’s involved in risk-based 

inspection and why—to me, it seems like the only way to go. Mr. 

Cardinale, do you want to take a stab at that? 

Mr. CARDINALE. I’ll be happy to respond, Mr. Chairman. 

Mr. FARENTHOLD. You need to turn your mic on. 

Mr. CARDINALE. I’ll be happy to respond, Mr. Chairman. I think 

it’s important to note that the risk-based inspection strategy is not 

designed to supplant or take the place of BSEE statutory obligations to inspect 100 percent of facilities in the offshore environment. It is—— 

Mr. FARENTHOLD. But I want you to go into the ones you’re worried about twice a year instead of once a year, I mean, just in broad 

general terms. 

Mr. CARDINALE. Understood. I think that it’s important to point 

out that the risk-based model that was developed, we have found 

30 

to have been very, very accurate. Over the past 3 years, that model 

has identified the top 20 percent of high-risk facilities that are out 

in the Gulf, and those have accounted anywhere from 80 to 89 percent of the major incidents that have taken place out there. 

I think it’s also important to point out that the risk-based inspection strategy was designed as a pilot tool, and as such, it is supposed to be iterative in nature. 

I recognize that when the team that identified the facilities in 

the first round put that list together, three of the facilities on the 

list were later determined to be shut in. Two of those were not inspected; one was because it was determined that even being a shutin facility, there was merit to doing an inspection and gaining the 

information and insight that would come through the risk-based 

pilot. Subsequently, three additional facilities were identified, and 

the next phase of inspection is ongoing. 

Mr. FARENTHOLD. And what about working with industry? We’ve 

seen a great success in OSHA through cooperative industry programs like VPP. Have you all—I mean, what’s your relationship 

with industry? I imagine they’re no more eager to have another 

problem than y’all are. 

Mr. CARDINALE. I can’t speak to the specific incidence of engagement, but I will tell you that, just generally, we view engagement 

with the industry to be of primary importance. I think it’s critical 

that we get insight from industry about the policies that we’re developing so that we can better understand what their challenges—— 

Mr. FARENTHOLD. Mr. Rusco, did you all look at all the interaction with industry? 

Mr. RUSCO. Over the years, yes, we have. There is a lot of interaction in the inspection community between industry and the inspectors. We have some concerns about where that has gone in recent years with the addition of law enforcement inspections going— 

inspectors going along with those inspections. But for many years, 

the inspections have been along the lines of a safety culture perspective. So you go out, you have an incident, you find something, 

you try to figure out what the root cause is, you try to figure out 

what can we do to make that not happen. You communicate any 

serious problems to the industry from the regulator. And that’s the 

way it goes. We are concerned about the effects of adding a law enforcement component to that, though. 

Mr. FARENTHOLD. So by law enforcement, rather than working to 

fix something, you end up getting fined. Is that how that—I’m just 

trying to narrow it. 

Mr. RUSCO. Yeah. So I’m sorry, I’ll be more clear. After the Deepwater Horizon, there was this inspection unit that you referred to 

in your opening remarks that was looking for internal conflicts of 

interest between BSEE employees and the industry. They did not 

find any to speak of. So instead of wrapping that up and sending 

that component off to do nothing, they transformed it. Now, they 

have inspectors who have a law enforcement background, who are 

hired to do that first function, who are now taking part in regular 

inspections of offshore facilities. 

Mr. FARENTHOLD. So it’s a different—rather than a safety culture, it’s a law enforcement culture within that. 

31 

Mr. RUSCO. When we talked to one of the inspectors in the Gulf, 

I asked him point blank, I said, what happens when you go out 

there and, you know, you’re a police officer, you go out there and 

you start questioning folks? And he said they lawyer up. That’s the 

opposite of a safety culture. 

Mr. FARENTHOLD. Right. And I appreciate that. 

BSEE is a relatively new organization, relatively small number 

of employees. So I guess the same issue with these former law enforcement folks—and we’ll put some of the employees in—some of 

whom are management employees who seem to have some leadership issues. What issues do you face dealing with employees who 

either aren’t good at their jobs or because of a change within the 

organization—looks like you’re moving people into things that they 

may not be well suited for. Do you have an issue with having to 

relocate employees? Or what do you do about getting rid of people 

whose usefulness within the organization is not what it used to be? 

What do you do with your problem personnel, as a short answer 

to that question? 

Mr. CARDINALE. Well, there are established policies and guidelines—— 

Mr. FARENTHOLD. Is your mic on? 

Mr. CARDINALE. Yes. 

Mr. FARENTHOLD. Okay. I’m sorry. Again, we have the budget 

mics. You need to really get close. 

Mr. CARDINALE. There are established policies and practices for 

dealing with employees who are not performing. Employees are all 

under annual performance plans. They’re all rated and reviewed to 

ensure that they are meeting all of the critical elements in their 

performance plans. And so the established practice is to follow the 

applicable HR guidelines when an employee is not meeting those 

standards. 

Mr. FARENTHOLD. Do you have the ability to fire somebody? 

Mr. CARDINALE. I think that ability exists, but, again, that has 

to happen through a process that may—— 

Mr. FARENTHOLD. It takes how long? 

Mr. CARDINALE. It can take a while. It’s designed to ensure that 

employees have due process. 

Mr. FARENTHOLD. All right. The issue is always how much process is due. 

Mr. Raskin, I went a little bit long, but I will be generous with 

your time as well. 

Mr. RASKIN. Mr. Chairman, thank you very much. 

And welcome, gentlemen. 

I want to take this opportunity to talk about challenges that 

BSEE has had in hiring and retaining the inspectors that it needs 

to ensure worker and environmental safety. The GAO has shown 

that hiring compliance staff has been a tough spot for BSEE that 

has undermined the Bureau’s performance. In February 2016, GAO 

reported, quote, BSEE has not met its goals for monitoring operator compliance with environmental standards, primarily because 

it does not have enough staff to accomplish its workload. GAO 

identified several sources, including BSEE’s own annual compliance activity reports, that said it needs up to 30 compliance staff 

to effectively carry out its mission. And you had funding for 30 poVerDate Sep 11 2014 14:44 Jun 13, 2017 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 E:\VIC\25224.LOC 25224
32 

sitions, but GAO reported that BSEE left 9 critical positions open 

as of November 2015, even with the funding to fill those positions, 

rolling over millions of dollars of environmental oversight funds 

from year to year. 

So, Mr. Cardinale, let me ask you, why did BSEE roll over millions of dollars in environmental oversight funds in fiscal years 

2013, 2014, and 2015, rather than use them to hire the requisite 

environmental compliance staff? 

Mr. CARDINALE. Thank you for your question, Congressman. I 

think that BSEE has, in fact, over the last year or so, managed to 

staff up as a result of a variety of factors, anticipating that it would 

need a full complement of inspectors. I think they were reticent to 

spend money that they knew they would need as they staffed up. 

As a result of changes in the market, as well as BSEE’s use of 

a full suite of recruitment and retention tools, I’m pleased to say 

that the compliance inspection team is now fully staffed. 

Mr. RASKIN. Okay. Well, let me shift over to you then, Mr. Rusco. 

Do you believe that BSEE is taking the steps that are needed to 

implement the GAO’s recommendation that BSEE develop a plan 

to address the inadequacy of their staff? 

Mr. RUSCO. Well, we’ll be following up on that. A couple of things 

have happened in the last couple of years, in general, in the hiring 

front. BSEE was able to get special authority through OPM to pay 

closer to market salaries for certain key staff, and that has helped 

them hire people. 

The specific issue with the environmental compliance staff and 

the open positions, that was entirely a leadership decision not to 

hire those. Those were not staff that you would have had trouble 

hiring in previous years. I don’t know the extent to which those positions have been filled because we haven’t looked at it since the 

2016 report. 

Mr. RASKIN. Okay. So, Mr. Cardinale, let me come back to you. 

Was that a mistake to make that strategic decision originally not 

to hire that staff? And what’s the plan now for making sure that 

there is sufficient staff through hiring and retention activity? 

Mr. CARDINALE. Congressman, I can’t speak to whether or not it 

was a mistake. It does appear that, in hindsight, those resources 

could have been utilized for that purpose. I think the plan now is 

to ensure that we are, in fact, fully staffed and that our people on 

the front lines have all the resources they need to do their jobs. 

Mr. RASKIN. Are you subject to a hiring freeze, the general Federal hiring freeze now? 

Mr. CARDINALE. Yes. 

Mr. RASKIN. So does that freeze into place those original erroneous decisions that were made about not hiring a full complement? 

Mr. CARDINALE. I don’t know the specifics of the impacts of the 

hiring freeze. But I would imagine that, at least for the time being, 

we would be restrained from hiring additional personnel. 

Mr. RASKIN. Okay. Let me just quickly shift over to talk about 

the future of Interior safety and environmental regs. In 2012, 

BSEE implemented a new safety regulation for offshore rigs, the 

drilling safety rule which radically overhauled what were the radically inadequate regs that led to the Deepwater Horizon explosion. 

33 

The new rule required secondary blowout preventers to ensure that 

one blowout preventer would not be there and just not be able to 

do the job, so it was a backup. This possibly would have prevented 

the Deepwater Horizon situation. 

However, President Trump has talked about easing regulations 

on oil, gas, and coal producers. Is the drilling safety rule one of the 

regs that President Trump plans to repeal, and do you have anything to say about that, Mr. Cardinale? 

Mr. CARDINALE. I am not aware of any plans currently underway 

to repeal that rule. What I will say is that worker safety and the 

protection of the offshore environment and conservation of the resources have been and will continue to be our top priority. 

Mr. RASKIN. Okay. Thank you very much. 

I yield back, Mr. Chairman. 

Mr. FARENTHOLD. Thank you very much. 

We’ll now go to the gentleman from Kentucky for 5 minutes. 

Mr. COMER. Thank you, Mr. Chairman. 

My first question is for Mr. Rusco. When GAO was conducting 

its previous investigation of the BSEE, what level of cooperation 

did you all receive from the Bureau? 

Mr. RUSCO. During our first investigation along this line of restructuring and leadership initiatives, we found a very unusual degree of resistance from BSEE leadership. So we were kept from information that would have normally been given to us directly. And 

everywhere we went to talk to people, we were followed by a minder who reported directly back to headquarters what was said in the 

meetings. 

Mr. COMER. What was the source of the problem? 

Mr. RUSCO. The minder reported directly to the deputy director. 

I don’t know that that’s the source of the problem, but I know 

that’s where they reported. And I know that all the information we 

got had to go through the deputy director before it came to us. 

Mr. COMER. Is it correct that this level of cooperation improved 

for your most recent work? 

Mr. RUSCO. Yes, it did. After that report, and after we raised this 

issue with access with our congressional clients, and there was 

some discussions behind the scenes, the then assistant Secretary 

for Lands and Minerals had a conversation with BSEE leadership 

and us in the room and said there will—that this will not go on, 

and during our second investigation, it was much better. 

Mr. COMER. So who was it that made sure that happened? 

Mr. RUSCO. That was the assistant secretary. 

Mr. COMER. Mr. Cardinale, you were chief of staff in the Office 

of the assistant Secretary for Land and Minerals, correct? 

Mr. CARDINALE. That’s correct. 

Mr. COMER. It appears your office was able to greatly improve cooperation with the GAO. What steps did you all take to make this 

happen? 

Mr. CARDINALE. Thank you for your question, Congressman 

Comer. I think part of what happened, just generally, is beginning 

in the previous administration, and certainly continuing into this 

administration, there is a recognition that the work that GAO does 

is extremely valuable, and that it is important that we provide the 

GAO with the utmost cooperation in facilitating their reviews so 

34 

that we can get the benefit of well-informed, thoughtful recommendations. 

Mr. COMER. Okay. Let me back up. The deputy director that you 

are referring to, is that Margaret Schneider? 

Mr. RUSCO. Yes, that is. 

Mr. COMER. Okay. Mr. Cardinale, will the agency and BSEE 

leadership commit to giving this Congress and the GAO ready access to data information and staff it needs to interview to do its 

oversight work? 

Mr. CARDINALE. Yes, Congressman. 

Mr. COMER. Okay. Well, thank you. 

Mr. Chairman, I yield back my time. 

Mr. FARENTHOLD. Will the gentleman yield for just one second? 

Mr. COMER. Yes, sir. 

Mr. FARENTHOLD. And, Mr. Cardinale, the minder that was talking to the assistant—or the deputy director, Ms. Schneider, what’s 

her position now? 

Mr. CARDINALE. She is currently serving as acting director. Like 

a number of senior career employees who are asked during the 

transition period, myself included, she is serving temporarily as the 

acting director. 

Mr. FARENTHOLD. All right. Thank you very much. 

Mr. Raskin, did you have any more questions? 

Mr. RASKIN. I did. 

Mr. FARENTHOLD. You have another 5 minutes. 

Mr. RASKIN. If I may. Thank you very much, Mr. Chairman. 

One general question I have is, the bottom line for most Americans is simply what are the chances of another Deepwater Horizon 

event? Have we been systematically reducing the prospects of another Deepwater Horizon? 

Mr. CARDINALE. Yes, I think we have. I think the events of that 

tragedy have informed a better and more effective way of conducting our oversight. We’ve taken a hard look at some of the elements that led to that tragedy, and I think that we have done a 

better job. 

Mr. RASKIN. And can you explain what that original bureaucratic 

resistance was to staffing up, hiring the requisite experts, and 

making the strongest approach? 

Mr. CARDINALE. I think my initial response to that would be that 

we—the Bureau was, in fact, in its early days, seeking to develop 

a mission that in some areas had previously not been carried out 

by predecessor organizations. I can only speculate, and I wouldn’t 

at this point speculate. 

Mr. RASKIN. Okay. Let me go to another question then. According 

to the Outer Continental Shelf Lands Act, the Bureau of Ocean Energy Management is required to develop a 5-year oil and gas leasing plan. The current plan was finalized earlier this year by the 

Obama administration before leaving office, and it runs until 2022, 

and it struck a balance between the economic development and environmental imperatives. 

Does this administration intend to make changes to this plan? 

And if so, what would they be? 

35 

Mr. CARDINALE. At this point, I don’t know the specifics, but I 

do know that the administration is, in fact, taking a look at the 

plan that was finalized at the end of the last administration. 

Mr. RASKIN. Okay. Well, Mr. Chairman, obviously this is a President who said he wants to promote deregulation. What we don’t 

know at this point is what specific regulatory changes might be 

forthcoming from the administration in this field and how they 

would affect the environment and affect workers. And I hope this 

subcommittee, under your leadership, will continue to use its oversight powers to evaluate the deregulatory actions in terms of their 

implications for the environment and for workers. 

With that, I yield back to you, Mr. Chair. 

Mr. FARENTHOLD. Thank you very much. 

I just have a couple of quick questions to wrap it up. Mr. Rusco, 

after reviewing your work and hearing the testimony here, it appears that the leadership at BSEE has created a malfunctioning 

work environment, whether it’s distrust between headquarters and 

regional personnel mismanagement, failed initiatives, wasted 

money, fear of retaliation. Would you agree with this characterization? And if so, what do you think—why do you think the environment has become so poor? 

Mr. RUSCO. I do agree with that. Unfortunately, and in terms of 

the root cause, well, I think it lies squarely in the leadership of 

BSEE. I mean, I think that they created an environment where 

they did not seek the advice and counsel of the experts in the field, 

and instead they created a culture where there was a fear of retaliation for anyone who said something different than what they 

were trying to do. And that really stopped organizational change in 

its tracks. 

And as a result of that, we had cleared Interior from the highrisk list in terms of restructuring, but in this last year, we put 

them back on, and it’s entirely for this leadership failure. 

Mr. FARENTHOLD. And what effect do you think this environment 

and these problems are having on overall safety and oversight mission that BSEE has? 

Mr. RUSCO. Well, I think that if BSEE, instead of spending 3 

years and a lot of money on a risk-based approach to inspections, 

had gone to the field and said, you know, you guys have a lot of 

experience in this, let’s build a risk-based approach together, they 

would have had one that worked the first time and they’d have one 

right now up and running that worked. 

Mr. FARENTHOLD. And have you seen any improvements in the 

work environment since the beginning of the new administration? 

Mr. RUSCO. We haven’t been doing any audits in there, so I 

can’t—— 

Mr. FARENTHOLD. Mr. Cardinale, has anything started to change 

since the administration changed? Microphone, please. 

Mr. CARDINALE. I think there’s always been a strong commitment 

on the BSEE workforce, as there is with all Federal employees. I 

do think that, as Secretary Zinke assembles his management team, 

that there’ll be a renewed focus on employee engagement and empowerment and ensuring that people on the front lines have the 

tools they need to get the job done and that we hear from them. 

36 

Mr. FARENTHOLD. All right. And, Mr. Rusco, do you believe leadership changes at BSEE could help address some of these issues? 

Mr. RUSCO. Yes, I do. 

Mr. FARENTHOLD. Anything else you think could help, that you 

haven’t mentioned so far? 

Mr. RUSCO. That it’s not necessarily the case that every leader 

has to know everything about an organization to be an effective 

leader, but they have to want to learn. And they have to go out and 

find out what their mission is and they have to find out from the 

people who do it. So whoever takes over, that’s what they have to 

do. 

Mr. FARENTHOLD. All right. Finally, from a congressional standpoint, is there anything particular that you think Congress could 

or should do to improve this situation? And I’ll let you both take 

a stab at that. Mr. Rusco? 

Mr. RUSCO. At this point, I think the agency has the authority 

and the ability to make any changes it needs to make. If they don’t 

make those changes, then I would have a different answer. 

Mr. FARENTHOLD. And I’m always nervous asking somebody from 

an agency, because the answer is usually, ‘‘give us more money.’’ 

Other than money, Mr. Cardinale, what can we do for you? 

Mr. CARDINALE. I’m in agreement with Mr. Rusco. I think BSEE 

has the authorities it needs to do its job, and I’m looking forward 

to the leadership coming in and charting the course ahead. 

Mr. FARENTHOLD. All right. Great. 

Mr. Raskin, if you don’t have anything else, I’d like to thank our 

witnesses for being here, and appreciate your service to our country. 

And with that, we are adjourned. 

[Whereupon, at 2:59 p.m., the subcommittee was adjourned.] 

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