Denver-based Gary-Williams Energy is one of four firms embroiled in a sex, drugs and ethics scandal involving a government agency that handles billions of dollars in oil and gas royalties.
Gary-Williams paid for thousands of dollars in meals, drinks and golf outings for officials of the Minerals Management Service’s Royalties- in-Kind division from 2002 to 2006, according to a report released Wednesday by federal investigators.
The royalties division markets and sells crude oil to firms such as Gary-Williams, an independent oil and gas company with refining operations.
Were limits exceeded?
“(You) cannot market oil and get top dollar sitting in an ivory tower,” Gary-Williams vice president Don Hamilton told federal investigators about agency employees attending industry events.
Another Gary-Williams executive, Rob Saunders, told investigators he felt taking individuals out for meals made them more comfortable “assigning open credit” to the company in conjunction with the oil it purchased.
“When it comes to the gift-giving, there are usually certain limits that are placed,” said John Holcomb, a professor of business ethics and legal studies at the University of Denver. “It gets to the issue as to whether or not the favors went well beyond the limits and therefore constituted an actual bribe.”
The gifts provided by Gary-Williams often exceeded standards set by the Office of Government Ethics, which states that employees can’t accept gifts of more than $20 from prohibited sources.
Holcomb said companies often have their own ethical standards.
Smallest firm among accused
Privately held Gary-Williams was founded in the 1950s by Samuel Gary, an active philanthropist who serves as the firm’s chairman. The company has an exploration arm and operates a refinery in Oklahoma that produces gasoline, diesel fuel, military jet fuel and asphalt.
With 275 employees, it is the smallest of the firms swept up in the scandal. The others are industry giants Shell, Chevron and Hess.
Gary-Williams spokeswoman Sally Allen declined to comment Wednesday because the company had not seen the report.
In total, Gary-Williams paid for more than $2,900 worth of meals, drinks and gifts for six Royalties-in-Kind workers on 43 occasions, according to the report. The gifts included tickets to PGA Tour events and entries into company- sponsored golf tournaments.
Some agency workers admitted to using drugs or having sex with employees at energy companies, but Gary-Williams wasn’t named as one of those companies.
Andy Vuong: 303-954-1209 or avuong@denverpost.com
