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Spill happened. so now mms is on the hot seat. you will have to scrap the organization and rebuild it from the ground up. >> we will have more with professor brinkley after the break including his take on the white house slapping down former fema head michael brown's conspiracy claim, brown believing the white house wants this disaster to spread. the question, how many people on the terrorist watch list could walk into gun shops and buy firearms and explosives? 1 in a thousand? 1 in 10? how about 9 out of 10?

Them honest." >> reporter: it's hard to imagine how things could be worse for the mms. its 1700 employees are supposed to regulate the oil industry but a growing chorus says it's nothing short of a disaster. >> it's very clear you have a dysfunctional agency. you can't trust them. they showed they're too cozy with industry. >> reporter: too cozy indeed. two years ago, an agency found more than a dozen ethical failures, some having sex and drug use with company employees. >> they thought partying and accepting expensive tickets to hotel rooms somehow made it's easier for them to understand how ...

Worse than we think it is. we don't know, it seems to me, what oversight, if any, they had over bp in those early day, though the coast guard was on the scene, yon at what level the epa was overseeing it? do you know that? >> to a degree i know it. because this is such a politicized atmosphere. people have to understand, president obama has been for offshore drilling, for it in the 2008 campaign, just weeks before the bp oil spill, he was encouraging more oil exploration and possibly offshore drilling in places like virginia, florida, alaska. in addition to that, your earlier report on mms sho...

Called it unlikely. when bp sought for the psych, mms went along with it and gave the company a categoriry call exclusion from more strenuous environmental impact study and one executive says they are common. >> once you dig into it, they are treated with kid gloves in every respect. they are the least regulated industry from an environmental point of view, in the country. >> obviously, they will argue. >> they can't. >> reporter: we asked mms about the oversight over the wells. in a statement, they said speculation over the causes or implications of the deep water tragedy would be premature a...

Started working way too close with big oil. in fact, as the "washington post" is reporting, as you have seen, they gave category call exclusion, meaning they weren't even checking for some of the environmental measures, mms, on this very rig, the deepwater horizon rig they were supposed to. >> why be so cozy with this industry you're supposed to be regulating? >> because i think we were in a recession, starting with the beginning of the obama administration, april 2009. for a minute, people thought the obama administering might be a little stricter environmentally on offshore drilling but they...