Gusher In the Gulf, pt. 2: A national emergency, complicated by conflicts-of-interest.
Voters of Gulf states are maybe now regretting the poor decisions they’ve made in the booth in recent years. If we’d had better leadership, it’s possible that BP, etc. would not have gambled and lost on the Macondo Prospect, which has drained over $100 billion from public and private coiffers, bringing America’s fake recovery to a dead stop. The spill has become a magnet for all the preexisting theories of what comes next.
It will surely be months or years before the American People know the full truth about how this catastrophe came to pass, if indeed we ever really know. But there is a lot that we do know already:
*BP has actively lied at every stage of the process associated with the project. When applying for permission to drill the well, they knowingly overstated their ability to handle any leaks, spills or other problems that might occur. Given the unprecedented nature of the project itself (drilling so deep, though such a dense section of ocean floor), a layman might expect a number of contingencies to be put in place, but nothing of the sort ever happened. Instead, they cut corners repeatedly.
*BP estimated the project to take 51 days, but budgeted for 78, allowing for the possibility of construction time being extended up to 53%. This can be interpreted as further proof that BP officials were fully aware of the potential complications. Each day beyond day 78 cost BP approximately $1 million. The rig blew up and sank on day 80.
*Embattled BP CEO Tony Hayward (who made around $6 million last year) sold a third of his own stock just four weeks before the explosion. He was already aware of problems related to the Macondo Prospect.
*Goldman Sachs sold off 43.7% of its shares of BP stock, according to filings dated three weeks before the Deepwater Horizon explosion. Omitting (for legal reasons) any reference to the many overlapping insider connections between the two companies, they may have just interpreted Hayward’s move as a sign of trouble. The thing about the stock trades is that summer usually brings big profits for Big Oil; heck, even I drive a little bit this time of year!
*Goldman Sachs also owns Nalco, which makes the controversial oil dispersant Corexit. BP has dumped 3 million gallons into the Gulf so far, with mixed results. Some critics allege that BP used the stuff to push the greater amount of oil below the surface, thereby removing much of their potential liability.
*Halliburton, a company subcontracted by BP to help build the well, announced its purchase of Boots and Coots on April 9, 11 days before the rig blew up and 18 days past schedule on completion of the job. By that point BP, Transocean and Halliburton were already engaged in acrimonious debate as the project faltered. (Several of the key whistle-blowers on the Deepwater Horizon conveniently died in the explosion.) Maybe they deserve some credit; having seen BP’s reckless disregard for safety, and knowing what kind of forces they were trifling with, maybe Halliburton decided on a strategy of preemption? Dick Cheney would appreciate that!
*BP has given more money (over $77,000) to Barack Obama than any other politician of the last 20 years, even though Obama’s only been a national political figure for six years now. He reversed his position against offshore drilling after taking office, approving BP’s fraudulent bid for the project in question. But we can’t blame him for doing what everyone has always done.
*The Vanguard Group, an investment company that administers the two mutual funds through which President Obama maintains his personal wealth, is the biggest single holder of BP stock. Like Goldman Sachs, Vanguard also dumped a chunk of their stock at about the same time—over a million shares, but that amounts to only a fraction of the company’s total BP holdings.
At the very least, we can presume that industry insiders already knew what a problem the Macondo Prospect had become, and hedged their positions on BP with the expectation of major losses. The circumstantial cases to be made for insider trading, fraud, collusion, obstruction of justice and worse seem fairly obvious. The construction, explosion, burning and sinking of the Deepwater Horizon will make it very difficult, if not impossible, to properly investigate the actual rig, whether there was any evidence of sabotage or widespread safety violations and regulatory shortcomings. But the paper trail speaks for itself, even if the victims cannot.
email@example.com; June 21, 2010