Obama names new head for troubled offshore oil regulator

NEW YORK (CNNMoney.com) -- President Obama on Tuesday appointed a former Justice Department official to overhaul the troubled government agency responsible for regulating oil and gas drilling in the Gulf of Mexico.

Michael Bromwich, a litigator and former Inspector General of the Justice Department, will oversee the effort to reform the Minerals Management Service, which has been criticized for catering to the interests of the industry it's tasked with policing.

"For a decade or more, the cozy relationship between the oil companies and the federal agency was allowed to go unchecked," President Obama said in a prepared statement. "That cannot and will not happen anymore."

The MMS, a little-known branch of the Interior Department, has been thrust into the spotlight since a drill rig exploded in the Gulf of Mexico and gave rise to the worst oil spill in U.S. history.

In addition to granting permits to drill in the Gulf, the MMS is responsible for establishing safety standards for the industry and collecting royalties from the oil and gas companies it oversees.

Obama, who discussed the oil spill in a televised speech late Tuesday, has said the agency has had a history of accepting assurances from the industry in lieu of adequate safety plans.

Lawmakers blasted the heads of the nation's top oil companies in a hearing Tuesday for, among other things, having faulty and nearly identical contingency plans for dealing with disasters like the Gulf Coast oil spill.

Bromwich will be tasked with implementing a reorganization of the MMS, announced by Interior Secretary Ken Salazar last month, aimed at curbing the agency's conflicts of interest.

Under the proposed reorganization, the MMS will be spilt into three divisions: the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue.

Salazar named Bob Abbey, the current head of the Bureau of Land Management, to be the interim director of the MMS last month following the resignation of Elizabeth Birnbaum, who had run the agency for less than a year. Abbey will soon return to previous position.