Gusher In the Gulf, pt. 2

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.

 sdh666@hotmail.com; June 21, 2010

“Gusher In the Gulf”: BMac vs BP, Part 2

Americans’ understanding of the Deepwater Horizon debacle has evolved quite a bit over the last month since the rig exploded in the Gulf of Mexico. What was originally written off as an insignificant trickle of negligible volume (and not even publicly announced until two days after it began) is now widely recognized as a catastrophe of near-boundless scope. Even the best efforts of BP to cover-up the reality of what has occurred, among the other corporations with a piece of this action–like Transocean, Hyundai, Halliburton, Nalco, Goldman Sachs and others–have failed to obscure what should now be obvious: Massive environmental destruction is upon us, and this is happening because of the corruption of these companies and the elected officials they’ve bribed into submission.

Even President Obama, who is legally empowered to immediately sweep in and take control of a disaster of this scale, has been looking extremely weak on the issue, as Congress scrambles to obscure their own complicity in allowing BP officials to believe they could flout  the conditions of their lease with impunity. It appears, so far, that they were right, but that has been widely documented elsewhere.

Florida’s Attorney General, Bill McCollum, was just one of the public officials to be embarrassed by BP in the early days of the debacle. When McCollum endorsed BP’s efforts at a) cleaning up the spill, and b) fairly compensating Floridians who stand to lose billions, he did so based on a conference call with AGs from Louisiana, Texas, Alabama and Mississippi and cursory tour of the site. He was probably unaware, at the time, that BP was actively covering their own asses as he spoke; they made him look like he’d been paid off, which surely rankled.

McCollum has long been known as one of those pols who is always looking to move up. Barely an electoral cycle goes by without McCollum standing for some spot or other; he forfeited a very successful 20-year career in the House of Representatives to run, unsuccessfully, for the Senate seat won by Bill Nelson in 2000; four years later, he failed to win the seat won by Mel Martinez. As AG, he succeeded the much-maligned yet remarkably resilient Charlie Crist, who’s spent all year running for the Senate and has shown almost no tangible leadership during what should be a career-defining moment. Crist is certainly no Bobby Jindal–but Jindal, being an eyewitness to the post-Katrina fallout that tanked a number of political careers in his state, knows better than be project weakness (or, worse, distraction) in a crisis.

Of course, like his boss McCollum is also trying to do one job while running for another–Governor, again, this time against Florida CFO Alex Sink. His early, stupid endorsement of BP could have ended those aspirations, if our whole political system weren’t already greasy from BP’s largess. He has since reversed himself, in the grand Florida tradition, taking a position more like his original one: Don’t Trust BP!

To that end, he sent a letter to CEO Jack Lynch, dated May 20. He’s basically putting it out there now that the Gulf will still be full of oil as the summer hurrican season begins on June 1. Such a combination of potential factors has no known precedent, and it’s highly proactive of McCollum to put BP on the spot in advance about their massive potential liability. It’s worth noting, though, that at this writing BP has still not formally signed anything eliminating the existing cap on liability; that no one has yet forced them is, at best, suspicious.

BP Plays “Hide the Liability”, re: Gulf Coast

The explosion that destroyed Transocean’s Deepwater Horizon oil rig and sent millions of gallons of oil flowing into the Gulf of Mexico, where it currently threatens the livelihoods of thousands who make their living off the region’s fabled seafood life, has barely been investigated by authorities who are still powerless to stop the oil spill, nevermind discern its actual cause. As such, most of what the American People need to know remains unknown–the known unknowns, and the unknown unknowns, to paraphrase former SecDef “Rummy” Rumseld.

These two seemingly contradictory press releases issued through the office of Bill McCollum, the Attorney General of Florida, point to the fundamental shadiness of the whole situation. On the 4th, McCollum clearly states that Floridians should “not … sign any settlement documents from any companies or corporations” until they know the full extent of what remains inestimable damage from a spill that hasn’t fully impacted land yet. By the 6th, McCollum has spoken with British Petroleum and basically endorsed the company’s settlement efforts, even though the company had not yet legally codified the non-cap on claims.

In other words, BP may be encouraging people to make settlement claims based on early, unvetted estimates, allowing them to pay citizens off for far less than their real damages may amount to. By the time the full scope of the damage is understood, BP, Transocean, Halliburton and other culpable parties may be able to offset their expenses based on claims already paid out. And you can be sure that the relevant paperwork–which McCollum wisely advised people not to sign, at first–will contain legally-binding language a) prohibiting revealing of key details about the claim, and b) indemnifying BP against any future lawsuits by the signee, which amounts to a cap on claims.

All this will enable a coverup that began while the initial fire was still burning, a process of concealing not only the cause of an explosion that killed 11 people, but also an environmental catastrophe that may severely undermine the currently fruitless efforts to reverse the declining US economy. Note that McCollum’s flip-flop developed after a conference call that also included the Attorney Generals of Alabama, Mississippi, Louisiana and Texas, which means BP may have already gone a long way toward protecting their interests–and that’s more than can be said for the citizens of those states.

May 4, 2010
ATTORNEY GENERAL: FLORIDIANS AFFECTED BY DEEPWATER HORIZON OIL SPILL SHOULD BE BEWARE OF FRAUD

TALLAHASSEE, FL – Attorney General Bill McCollum today issued a consumer advisory regarding the Deepwater Horizon oil spill incident, encouraging Floridians to call the Attorney General’s fraud hotline at 1-866-966-7226 to report any incidents of fraud. Earlier today, Attorney General McCollum visited the Escambia County Emergency Operations Center in Pensacola and the Deepwater Horizon Unified Area Command Center in Mobile for briefings on emergency preparedness efforts in response to the oil spill in the Gulf of Mexico.

“Today, I witnessed first-hand the catastrophic oil spill sitting just off Florida’s coastline,” said Attorney General McCollum. “As state officials and residents prepare for the impacts the Deepwater Horizon spill is expected to bring to Florida’s sensitive coastal areas and the state’s economy, my office will continue providing as much information as possible to Floridians so they can protect themselves and their rights from various types of fraud related to this disastrous spill.”

The Attorney General McCollum also cautioned all Florida residents to not waive any rights or sign any settlement documents from any companies or corporations until they know the full extent of their loss, which may be significantly higher than the money being offered initially. The Attorney General noted that these offers could be premature or even fraudulent.

Additionally, in what could be one of the most significant environmental clean-ups in Florida’s history, Attorney General McCollum clarified that Florida statutes provide no cap on recoveries related to natural resources. During the past weekend, Attorney General McCollum met with the Attorneys General of Alabama, Louisiana, Texas and Mississippi to discuss a number of legal options to ensure costs and damages to Gulf coast states, businesses and residents are recouped.

Consumers can contact the Attorney General’s Fraud Hotline by calling the Attorney at 1-866-9-NO-SCAM (1-866-966-7226) or by visiting the Attorney General’s website at http://www.myfloridalegal.com. Additional information on the State Emergency Response Team’s response efforts can be found at http://www.floridadisaster.org.

May 6, 2010
ATTORNEY GENERAL: BP AMERICA PROMISES QUICK, EFFICIENT CLAIMS PROCESS WITH NO CAPS ON PAYOUT

TALLAHASSEE, FL – Florida Attorney General Bill McCollum today announced that the Attorneys General of the Gulf Coast states have been assured by the General Counsel of BP America that the company will memorialize its commitment to pay whatever is necessary to clean up the Deepwater Horizon oil spill as well as to compensate the states and their citizens and businesses for any losses due to the spill. The Attorneys General were also provided with detailed information about the claims process for the individuals and small businesses impacted by the approaching oil spill.

“What happened at the Deepwater Horizon oil well was a tragedy, not only in that human life was lost, but also because of the devastating impacts this event will likely have on our environment and economy for years to come,” said Attorney General McCollum. “BP has assured us it will do whatever it takes to make our states and their citizens whole, and I encourage them to continue working diligently to make the claims process expedient and efficient so our citizens and businesses can see immediate relief.”

On a lengthy conference call with the Attorneys General of Florida, Texas, Louisiana, Alabama and Mississippi, the General Counsel for BP America outlined the action items the company would take at the request of the Attorneys General. The company will respond immediately to yesterday’s letter from the Attorneys General, memorializing the commitment to cover all costs of the incident, without regard to any potentially applicable statutory caps on recoveries. The company will also provide a written summary of the claims process to allow states to educate their citizens and businesses about how to make quick and efficient claims.

BP America has stated that checks for claims will be sent out within 48 hours of the initial claim report. Daily reports on the claims received and processed will also be provided to the states for review. The toll-free number for the Claims Line is 1-800-440-0858, and more information is available online at http://www.deepwaterhorizonresponse.com