Wide-Ranging Ethics Scandal Emerges at Interior Dept. As Congress prepares to debate expansion of drilling in taxpayer-owned coastal waters, the Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal — including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct. In three reports delivered to Congress on Wednesday, the department’s inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service, which collects about $10 billion in royalties annually and is one of the government’s largest sources of revenue other than taxes. “A culture of ethical failure” besets the agency, Mr. Devaney wrote in a cover memo. The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch. The investigations are the latest installment in a series of scathing probes of the troubled program’s management and competence in recent years. While previous reports have focused on problems the agency has had in collecting millions of dollars owed to the Treasury, the new set of reports raises questions about the integrity and behavior of the agency’s officials. In one of the new reports, investigators conclude that a key supervisor at the agency’s minerals revenue management office worked together with two aides to steer a lucrative consulting contract to one of the aides after he retired, violating competitive procurement rules. Two other reports focus on “a culture of substance abuse and promiscuity” and unethical behavior in the service’s royalty-in-kind program. That part of the agency collects about $4 billion a year in the form of oil and gas rather than cash royalties....