A U.S. Interior Department report made public this week raised questions about a federal Bureau of Land Management official’s behavior before he retired and took the top job with New Mexico’s largest oil and gas trade organization in 2010.
Allegations concerning Steve Henke’s conduct during his nearly nine-year tenure at the BLM office in Farmington, including the taking of gifts such as golf tickets and meals, have added fuel to complaints by advocacy groups about relationships between the oil and gas industry and those charged with managing public resources.
According to the report, dated June 1, 2012, but not mailed to Bureau of Land Management leadership until February 2013, it took federal investigators more than two years to examine Henke’s conduct. It took another three years before the report became public in a story published Wednesday by Environment & Energy Publishing, an online media company based in Washington, D.C.
The BLM said the agency did not take action because Henke was no longer employed by the BLM at the time the investigation concluded. The U.S. Attorney General’s Office declined to take any action as a result of the investigation.
The probe was launched in October 2010 after then-BLM Director Robert Abbey raised concerns about possible conflicts of interest after Henke left his post as the manager of the Farmington Field Office to take a position in which he would advocate for oil and gas industry interests. The Interior Department document says Abbey reported that Henke may have engaged in “certain questionable activities” while at the BLM, “to include activities which eventually led to his employment by [the New Mexico Oil and Gas Association].”
The more than 50-page report found “no evidence” that Henke violated conflict of interest laws by transitioning to the oil and gas industry role, but it found that “he may have violated agency policy, Federal laws, and the Standards of Ethical Conduct for Employees of the Executive Branch” in other ways during his years at the BLM.
Inspectors found that Henke accepted gifts and meals, failed to to financially disclose them and failed “to act impartially in the performance of his official duties.”
Henke may have influenced witnesses, including his wife and staff, to convey false information to inspectors that deterred and delayed their work, said Robert Knox, assistant inspector general for investigation for the U.S. Department of the Interior.
Federal investigators said polygraph tests led them to believe that entities, whose names were redacted in the document, “conspired with witnesses to mislead and obstruct our investigation, potentially violating Federal conspiracy and obstruction law.”
Some issues discussed in the report were first noted in a 2009 report by the Government Accountability Office, which said Henke had taken gifts and misused BLM funds for personal travel expenses.
Henke, the GOA said at that time, “was too close to unnamed oil and gas industry officials and made decisions to benefit companies based on personal relationships, rather than the good of BLM.”
Allison Sandoval, a spokeswoman for the BLM in New Mexico, said Wednesday that the bureau has policies in place that prohibit such behavior, but “We didn’t know that he was accepting improper gifts [while he was still employed by the BLM], so there were no actions we could take at the time.”
Between 2001 and 2010, Henke managed the Farmington District Office, which oversees both the Farmington Field Office and the Taos Field Office. It is one of the top two oil- and gas-producing regions in the state, with more than 20,000 oil and gas permits. As a result of these oil and gas lease sales, New Mexico consistently produces some of the highest revenues across all federal bureaus, and it was the highest national producer in 2015.
In April, after six years as president of the New Mexico Oil and Gas Association, Henke announced his retirement from that post, which paid an annual salary of more than $250,000. Ryan Flynn, who recently left his state Cabinet post as New Mexico Environment Department secretary, was announced as Henke’s replacement Friday. The movement of both men from regulatory positions directly to the helm of the association has been decried by industry watchdog groups.
Wally Drangmeister, a spokesman for the association, which represents more than 300 oil and gas companies in the state, said the newly revealed report had “absolutely nothing” to do with Henke’s retirement from the association.
“I’m not going to comment on anything related that report,” he said.
Asked about the implications of a state or federal regulator becoming the head of an industry group, he said, “We are an industry that is heavily regulated, that has an extreme amount of environmental resources and processes we follow. The fact that we would have someone who is knowledgeable, I don’t think there is any blurred line.”
Republican state Sen. Steve Neville, an Aztec-based real estate appraiser, said he knew Henke when he managed the Bureau of Land Management office in nearby Farmington. Neville said he had no direct knowledge of the investigation but that Henke “didn’t tend to be heavily biased against oil and gas, which tends to happen a lot in the last couple of years.”
“He was always perceived to be pretty reasonable, pretty rational when it came to regulating the oil and gas industry,” Neville said.
But others said Wednesday that the revelations about Henke are troubling and underscore problems in maintaining the public’s trust in environmental resource management when there is a “revolving door” between federal or state regulatory agencies and industry groups.
Chris Saeger, director of the Western Values Project, said the report “absolutely blurs the lines” between agencies like the BLM “and the people they’re supposed to protect.”
Kyle Tisdel, an attorney for the Western Environmental Law Center, said the BLM Farmington District has been fast-tracking oil and gas development for years through categorical exclusions that don’t consider the environmental impact of development.
“The relationship [Henke] maintained with the oil and gas industry throughout his tenure suggests he was cooperating at their behest and not in the public interest in terms of managing public resources in the San Juan region,” Tisdel said.
Mike Eisenfeld, an energy and climate manager with the San Juan Citizens Alliance, called the report “a pretty discouraging document” that raises a lot of questions, including, “Where has it been for three years?”
Justin Horwath contributed to this report.
Contact Rebecca Moss at 505-986-3011 or email@example.com.