Monday, May 10, 2010

BP: Power Broker In Washington, Master Of Disaster In Gulf, Texas And Alaska

For Tony Hayward, the CEO and his top lieutenants at BP, testifying before the first of six Congressional oversight committees this week will be a slam dunk. After all, the skids have been greased by a $16 million lobbying effort of Congress last year and $3.5 million so far this year.

A slam dunk, that is, compared to the inability of BP's engineers trying to cap a gusher pumping 210,000 of gaseous crude oil from a broken pipeline into the Gulf of Mexico since April 20.

It is not for me to say Congress is on the take from BP and other Big Oil  interests. But the oil interests have easy access to Congress and the White House that puts other lobbyists to shame.

At a hearing on oil spills in November 2009, Sen. Robert Menendez (D-New Jersey), an opponent of off-shore drilling, showed a picture of an oil rig on fire off the coast of Australia.

"These things happen," countered Sen. Mary Landrieu (D-Louisiana), a drilling proponent, who estimated there were 20,000 rigs in operation and "19,999 were not on fire." She does support the current investigations.

This illustrates the mentality in Congress. The sides are already drawn.

To say BP doesn't have clout in Congress is to deny the sun doesn't rise in the East. Consider these high-powered Washington superstars who have represented BP:

Dave Levinthal of the Center for Responsive Politics lists Leon Panetta (now CIA director), George Mitchell (now Obama's Middle East envoy), Christine Todd Whitman (the former EPA administrator), and Tom Daschle (the former majority leader) to serve on its various boards of advisers and "independent" panels.

Not only has BP been successful in swaying Congress in the past, this time it may have an ally in the Pentagon if Congress pushes too hard against the firm which calls itself BP for Beyond Petroleum after dropping the British Petroleum nomenclature in 2000.

You see, BP is the biggest supplier of fuel to the Pentagon with much of its oil going to military operations in the Middle East. It sold $2.2 billion in oil to the Pentagon last year, according to the Defense Energy Support Center. Who says the Pentagon wouldn't play the "national security" card if Congress really put the screws to BP by banning it from federal contracts?

One of Hayward's missions is to convince Congress to kill a bill that would increase BPs liability from $75 million to $10 billion for cleanup costs and economic damage to Gulf Coast businesses. In the past, BP and its cohorts have won almost every skirmish. And, it has promised repeatedly to pay all cleanup costs from the Gulf of Mexico oil slick.

Despite their public relations image as a "green" company, BP has a horrific track record of accidents in which Washington essentially looked the other way. Newsweek offers this assessment:

-- After a 2005 explosion of the country's third largest oil refinery in Texas City, the Chemical Safety and Hazard Investigation Board said the blast which killed 15 and injured 180 was caused by deficiencies "at all
level of the BP Corporation" and fined $50 million which two EPA investigators said was a mild slap on the wrist. Justice Department officials killed the investigation before it reached the top rung of the corporate ladder. The $50M fine was assessed in 2007 when BP reported $17.2 billion in profits.

-- In 2006 corroded pipes leaked about 775 barrels of crude on the Alaska tundra. The U.S. Attorney's office authorized a "surgical" subpoena for internal documents relating to the company's maintenance of the pipelines. BP complied in early 2007 with 62 million pages of documents for review by the four investigators. The Justice Department in Washington told the investigators to seek a misdemeanor complaint amounting to a $20 million fine. There was no "realistic chance of generating useful evidence," the Alaska U.S. attorney said.

-- In connection with those two spills, Jeanne Pascal, a lawyer in the EPA's Seattle office, wanted to sanction BP with debarment from government contracts unless they agreed to tighter controls over safety and maintenance. Again, Washington interceded. When "a major economic and political giant tells you it has direct access to the White House, it's very intimidating," says Pascal who retired leaving the unsigned debarment order on her desk.

So far this year, Congressional candidates have received $160,000 from BP employees and more than $1 million since January 2009 from its political action committees and BP lobbying groups.

Asking whether BP has direct access to Congress and the White House is as asking if the bear lives in the woods. If it were only that simple to cap the oil leak.

Readers comments are welcome as long as they remain civil. We reserve the right to delete any comments that are vulgar, libelous and totally irrelevant to this posting. -- Jer 

1 comment:

Inspector Clouseau said...

On the issue of what the BP execs knew about the blow out preventers, a little different perspective.

A corporation is a legal fiction entity. In doing business, the goal of that entity is to generate profits and try to stay afloat. Every decision is made in an effort to maximize profits, and is theoretically an educated guess. However, the reality is that some of the guesses are going to be wrong.

An entity does not have a mind or a conscience similar to that of a human. Even though humans run corporations, corporations are separate and apart from humans, somewhere between a human and an inanimate object.

Whereas a human will occasionally make a judgment call against his or her personal interest in pursuit of other goals, rarely will an entity do so because it is not really its money. It is the money or interests of others, the shareholders at risk, not the decision makers. It makes for a different dynamic.

As a result, fines, penalties, and lawsuits have to be figured into the economic mix as necessary evils. An entity will try to minimize them, or delay them if possible, but they know that they are always just around the corner. It's the nature of dealing with an entity when you're engaged, and then walking away from it and trying to live a human life. A human being does not generally approach life in this fashion.

Corporations are not human. They can't be. It's an inherent conflict of interest.