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Words of its critics, rubber stamps the oil industry's action and unable to enforce safety regulation. in 2000, they issued a safety alert calling for offshore drillers in the u.s. to have an additional backup system called and acoustic switch that could prevent oil blowouts like the one in the gulf. they went so far to call it a quote essential component. just three years later after complaints from the oil industry, mms determined it wasn't so essential after all, saying it was too costly and effective, never mind bp is required to use it on rigs in two other countries. stuart smith is an en...

They've shown that they're too cozy with industry. >> reporter: too cozy indeed. two years ago internal government investigation discovered ethical failures by a dozen mms employees. some were even having sex and using marijuana and cocaine with oil company employees. >> it was very clear, they thought that partying, drinking, accepting expensive tickets and hotel rooms, somehow made it easier for them to understand the business of how much ore and oil and natural gas was being taken out. >> reporter: cnn has reviewed hundreds of pages of documents and government reports dating back almost ten...

Regulation. in 2000, they issued a safety alert calling for offshore drillers in the u.s. to have an additional backup system called and acoustic switch that could prevent oil blowouts like the one in the gulf. they went so far to call it essential component. just three years later after complaints from the oil industry, mns determined it wasn't so essential after all, saying it was too costly and effective, never mind bp is required to use it on rigs in two other countries. stuart smith is an environmental attorney who has won dozens of cases against the oil industry and representing fisherme...

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've shown they're too cozy with industry. >> reporter: too cozy indeed. a year ago, an agency found more than a dozen ethical failure, some having sex and drug use with employees. >> it was very clear, they thought that partying, drinking, accepting expensive tickets in hotel rooms made it easier for them to understand the business of how much ore and oil and natural gas was bein...