WASHINGTON (Reuters) - U.S. lawmakers unveiled legislation on Wednesday that would suspend a federal program that collects and sells oil and natural gas from energy companies drilling on federal lands until the Interior Department conducts an extensive review of its operations.

The Interior Department’s Minerals Management Service, which runs the royalty-in-kind program, came under fire last week after its inspector general reported that employees used illegal drugs, had sex and accepted gifts from workers at the oil companies they were hired to oversee.

The royalty-in-kind program collects and sells about $4 billion a year in oil and gas turned over by energy companies as royalties for using federal land.

Democratic Senators Bill Nelson of Florida and Robert Menendez of New Jersey said they offered the bill to rein in unethical behavior.

“If we need to put on the books -- don’t take money and drugs from the oil industry -- that’s what we’ll have to do to stop the influence peddling,” Nelson said in a statement.

“The whole sordid affair shows how much sway big oil holds over the government,” he added.

The bill bars Minerals Management Service employees from accepting any gifts from members of the oil industry. Under the legislation any gift received by an employee would be considered an illegal gratuity and a crime punishable by 2 years in prison.

In addition, more Minerals Management employees would be required to file public forms disclosing finances and past employment. Employees would not be allowed to have any investments in the oil industry.

If the bill passed, the Interior Department would have to shelve its royalty-in-kind program until it issues a report to Congress on the accuracy of its royalty collection.

Minerals Management would also need a training program to certify that employees understand ethics laws and regulations. The legislation would also require an ombudsman oversees the Minerals Management Service’s progress.

In light of the scandal involving Minerals Management Service employees, the House Natural Resources Committee will hold a hearing on Thursday on federal oil and gas royalty collections.