As leaders of the Senate's Energy and Natural Resources Committee, Sen. Jeff Bingaman, D-N.M., and Wyden asked the inspector general to examine these issues last year.
"The improper activities detailed in this report are extremely troubling," said Bingaman, chairman of the Senate panel, in a statement today. "From my vantage point, this investigation raises very serious questions about management and organization at the Interior Department. American taxpayers deserve to have confidence that their interests are being protected when it comes to collecting royalties from the production of public oil and gas resources, especially given the potential for expanded domestic drilling."
Sen. Chuck Schumer, D-N.Y., chairman of the Senate Joint Economic Committee, said in a statement, "Unfortunately for U.S. consumers, this IG report has it all -- sex, drugs and Bush administration officials once again in cahoots with Big Oil. The Department of Justice and the Interior Department should prosecute those involved in this unseemly case to the fullest extent of the law. It is a flagrant abuse of the public trust."
ABC News' Z. Byron Wolf contributed to this report.