The New York Timesleads with word that President Bush signed classified orders in July giving U.S. Special Operations forces permission to carry out ground operations inside Pakistan's border without approval from the Pakistani government. This marks an important shift for an administration that has repeatedly tried to work with the Pakistani government to target militants in its tribal regions and came about only after months of discussions between U.S. officials.

The Washington Post, Los Angeles Times, and the Wall Street Journal's world-wide newsbox lead with an Interior Department investigation that found "a culture of ethical failure" at the agency that is in charge of collecting billions of dollars worth of royalties from oil and gas companies. USA Todayleads with news that all air cargo will now be scanned for radiation at airports across the country. The 9/11 Commission had identified the lack of scanning as a clear vulnerability, even though no one knows of any information that would lead officials to think that terrorists are planning to smuggle radioactive material using planes. Some complained the program is nothing but a huge waste of money that could easily slow down commerce.

American officials who talked to the NYT emphasized that they will still inform Pakistan when ground attacks are carried out on its soil, but its permission will not be sought. The classified orders are described as a result of the exasperation felt by the Bush administration from the lack of action on the part of the Pakistani government at a time when all reports point to a growth of al-Qaida and Taliban operations within its borders. The move also reflects the fact that U.S. officials don't fully trust Pakistan's military and intelligence services, who are often accused of cooperating with the militants. The NYT deftly notes that it's not exactly clear "what legal authorities the United States has invoked to conduct even limited ground raids in a friendly country."

Meanwhile, the NYT reports on new details of last week's Special Operations raid in a village near the Afghanistan border and reveals that it "was more intrusive than had previously been known." The operation involved more than two dozen Navy Seals who were inside Pakistan for several hours and killed more than 20 suspected militants. Although one U.S. official says that the Pakistani government had hinted that it wouldn't oppose limited ground operations, Pakistan's top army officer was singing a different tune yesterday and said his country's sovereignty would be defended "at all costs." The paper notes that if a U.S. servicemember is killed or captured inside Pakistan, it would not only further strain diplomatic ties, but would also be celebrated as a huge victory by al-Qaida.

The Interior Department's inspector general described a free-for-all atmosphere in which more than a dozen current and former employees of the Minerals Management Service repeatedly accepted gifts and trips from industry representatives and directed contracts to favored clients. And that's just the G-rated part of the reports, which also detailed the party atmosphere at the Denver office of the royalty-in-kind program, where employees "frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relations with oil and gas company representatives," thus creating a "culture of substance abuse and promiscuity."

These reports were hardly the first time that the Minerals Management Service has come under fire for mismanagement and oversight failures. But, as the NYT notes, "the new reports go far beyond any previous study in revealing serious concerns with the integrity and behavior of the agency's officials." Even though the agency may have an obscure name that doesn't roll off the tongue so easily, it's important to remember that it not only issues drilling leases but also handles lots of money. In fact, it collects royalties that in some years amount to the largest source of revenue for the U.S. government besides taxes.

The reports' most lurid details are concentrated on the agency's royalty-in-kind program, which allows energy companies to pay the government in oil and gas instead of cash for drilling in taxpayer-owned land. The misconduct allegations that center around the program's former director, Gregory Smith, seem to be the most all-encompassing. Not only did he use his position to get lucrative outside work but also had sex with subordinates and purchased cocaine from an employee, which he frequently got delivered to his office. That's not to say he was the only one making questionable decisions. A couple of employees also had sex with industry representatives but continued to handle work involving those companies. When asked why she never told anyone that her objectivity might be compromised, one employee said that she "did not consider a 'one-night-stand' to be a personal relationship."

Unsurprisingly, it turns out that having these types of relationships with clients may have cost taxpayers money. Employees at the royalty-in-kind program repeatedly allowed energy companies to revise their bids after they had already been awarded and the vast majority of them favored the industry rather than the government.

"The activities at the [royalty-in-kind] office are so outlandish that this whole IG report reads like a script from a television miniseries—and one that cannot air during family viewing time," House natural resources committee Chairman Nick Rahall said.

Lawmakers who have been opposing calls to lift the ban on offshore oil drilling immediately seized on the reports to highlight one of the reasons why they think it would be a bad idea. "I warned publicly that we could not trust the oil companies … nor the federal watchdogs charged with keeping a watchful eye over them," Sen. Bill Nelson said. "Now, we have proof."