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A Punishment BP Can’t Pay Off

What is missing is a criminal prosecution that holds BP individuals responsible.

Protective oil booms try to keep oil from the BP Deepwater Horizon spill from coating the wetlands along the Louisiana coast on June 11, 2010. It has been two years since the rig explosion led to the largest oil spill in U.S. history and the death of 11 workers. (Saul Loeb/AFP/Getty Images)

This story was published as an op-ed in The New York Times.

Two years after a series of gambles and ill-advised decisions on a BP drilling project led to the largest accidental oil spill in United States history and the death of 11 workers on the Deepwater Horizon oil rig, no one has been held accountable.

Sure, there have been about $8 billion in payouts and, in early March, the outlines of a civil agreement that will cost BP, the company ultimately responsible, another $7.8 billion in restitution to businesses and residents along the Gulf of Mexico. It's also true the company has paid at least $14 billion more in cleanup and other costs since the accident began on April 20, 2010, bringing the expense of this fiasco to about $30 billion for BP. These are huge numbers. But this is a huge and profitable corporation.

What is missing is the accountability that comes from real consequences: a criminal prosecution that holds responsible the individuals who gambled with the lives of BP's contractors and the ecosystem of the Gulf of Mexico. Only such an outcome can rebuild trust in an oil industry that asks for the public's faith so that it can drill more along the nation's coastlines. And perhaps only such an outcome can keep BP in line and can keep an accident like the Deepwater Horizon disaster from happening again.

BP has already tested the effectiveness of lesser consequences, and its track record proves that the most severe punishments the courts and the United States government have been willing to mete out amount to a slap on the wrist.

Prior to the gulf blowout, which spilled 200 million gallons of oil, BP was convicted of two felony environmental crimes and a misdemeanor: after it failed to report that its contractors were dumping toxic waste in Alaska in 1995; after its refinery in Texas City, Texas, exploded, killing 15, in 2005; and after it spilled more than 200,000 gallons of crude oil from a corroded pipeline onto the Alaskan tundra in 2006. In all, more than 30 people employed directly or indirectly by BP have died in connection with these and other recent accidents.

In at least two of those cases, the company had been warned of human and environmental dangers, deliberated the consequences and then ignored them, according to my reporting.

None of the upper-tier executives who managed BP — John Browne and Tony Hayward among them — were malicious. Their decisions, however, were driven by money. Neither their own sympathies nor the stark risks in their operations — corroding pipelines, dysfunctional safety valves, disarmed fire alarms and so on — could compete with the financial necessities of profit making.

Before the accident in Texas City, BP had declined to spend $150,000 to fix a part of the system that allowed gasoline to spew into the air and blow up. Documents show that the company had calculated the cost of a human life to be $10 million. Shortly before that disaster, a senior plant manager warned BP's London headquarters that the plant was unsafe and a disaster was imminent. A report from early 2005 predicted that BP's refinery would kill someone "within the next 12 to 18 months" unless it changed its practices.

Such explicit flirtation with deadly risk was undertaken as part of Mr. Browne's effort while chief executive to expand BP as quickly as possible. Mr. Browne relentlessly cut costs, including on maintenance and safety. Then he hastily assembled a series of acquisitions and mergers between 1998 and 2001 that added tens of thousands of employees, blurred chains of command and wrought chaos on his operations. His methods — and the demands of Wall Street — became overly dependent on quantitative measures of success at the expense of environmental and human risk.

After each disaster, Mr. Browne pledged to refresh his focus on safety, investment in maintenance and commitment to the environment. His successor, Mr. Hayward, followed suit, saying that BP's culture had to change. But the Deepwater Horizon tragedy — which bears many of the same traits as the company's past accidents — shows how difficult it has been for the company's leaders to shift BP's corporate values and live up to their promises.

The question becomes: did they try hard enough, and did the mechanisms of oversight, regulation and law enforcement work sufficiently to provide a recidivist organization the deterrent that could guarantee its compliance?

After its previous convictions, BP paid unprecedented fines — more than $70 million — and committed to spend at least another $800 million on maintenance to improve safety. The point was to demonstrate that the cost of doing business wrong far outweighs the cost of doing business right. But without personal accountability, the fines become just another cost of doing business, William Miller, a former investigator for the Environmental Protection Agency who was involved in the Texas City case, told me.

The problem then (and perhaps now) is that it is the slow pileup of factors that cause an industrial disaster. Poor decisions are usually made incrementally by a range of people with differing levels of responsibility, and almost always behind a shield of plausible deniability. It makes it almost impossible to pin one clear-cut bad call on a single manager, which is partly why no BP official has ever been held criminally accountable.

Instead, the corporation is held accountable. It isn't clear that charging the company repeatedly with misdemeanors and felonies has accomplished anything.

At more than $30 billion and climbing, the amount BP has paid out so far for reparations, lawsuits and cleanup dwarfs the roughly $8 billion that Exxon had to pay after its 1989 spill in Prince William Sound in Alaska. And BP will likely still pay billions more before this is finished.

And yet it is not enough. Two years after analysts questioned whether the extraordinary cost and loss of confidence might drive BP out of business, it has come roaring back. It collected more than $375 billion in 2011, pocketing $26 billion in profits.

What the gulf spill has taught us is that no matter how bad the disaster (and the environmental impact), the potential consequences have never been large enough to dissuade BP from placing profits ahead of prudence. That might change if a real person was forced to take responsibility — or if the government brought down one of the biggest hammers in its arsenal and banned the company from future federal oil leases and permits altogether. Fines just don't matter.

I suppose local cops could drag the CEO in on charges of Negligent Homicide, but I don’t see that sticking (“it’s a big company,” I hear the lawyer saying, “and my client’s orders were to get safety under control.  It just happened too late.”).  And the DoJ is completely impotent.

The EPA move would solve the problem for now (in a Whack-a-Mole kind of way, until the next company becomes the worst), but that was under consideration more than a year ago and went where, exactly?

Honestly, I think the shareholders are the best bet.  Yes, BP has record profits, but they could have doubled them if this dingbat hadn’t been in charge.  That’s about the only way to get rid of people like this.

Is there anything—anything—I as an average citizen can do that would have impact? Let’s get out of the way the pathetic—writing my representative—and the extreme—chaining myself to an oil platform. Does trying to minimize my carbon footprint help? How about donating a few dollars to an appropriate nonprofit?

I believe this reporter; I agree with his conclusions.

What can I do about it?

And one reason speculators are bidding oil prices up, so the likes of BP can recoup some or all, plus, of the cash lost because of the blowout, and then some!!
Companies now rarely collapse or fold from major mistakes or corruption, the onus is now on the consumer, that’s free market capitalism!!!

Clark Baker (LAPD ret)

April 20, 2012, 2:55 p.m.

Numerous published reports demonstrate that drug companies pay more than $1 billion in fines every year for illegally pushing drugs that kill or injure more than a million Americans ANNUALLY.  But when a drug company can pay a $4 billion fine for a drug that generated $20 billion in sales, the mortality and fines become nothing more than a calculated cost of doing business.

As long as these corporations donate to elected officials who control regulators and law enforcement, these behaviors will continue to occur.  Until CEOs, CFOs and COOs are fined and imprisoned - and criminal enterprises are shut down and liquidated, this will continue to occur.

Great reporting as usual, Abrahm.  EcoWtach broke a great story yesterday by Greg Palast called “BP Covered Up Blow-out Prior to Deepwater Horizon”  Palast & EcoWatch reported: “Yesterday, Ecowatch.org revealed that, in September 2008, nearly two years before the Deepwater Horizon explosion in the Gulf of Mexico, another BP rig had blown out in the Caspian Sea—which BP concealed from U.S. regulators and Congress.” 

We need to hold them responsible. Keep up the good ProPublica and all the journalists out there who have not let this story die. 

And everyone needs to check out The Big Fix by Josh & Rebecca Tickell: this incredibly powerful film is being released this weekend and reveals the huge coverup still going on with the Deep Water Horizon oil spill.

The best way to prevent these disasters is to have serious whistleblower protection.
The workers a the front line of defence in preventing this but they know what will happen if they speak up.
Deepwater Horizon survivor Daniel Baron on CNN stated
“You could call time out for safety,they wouldn’t fire you for it but they would find another way to fire you for it”
This was in front of four other survivors and all agreed with him.
It’s true there is no protection for whistleblowers for i am one.I was fired six weeks after i contacted OSHA and even on the day i was fired wich was exactly one year before Deepwater my employer was so arrogent they sent into a Sunoco Refinery a five ton machine i just locked out unsafe where even the manufacturer has a recall out on the problem i uncovered.I provided OSHA every piece of company documentation they commited this act with a picture of the lockout tag hanging on the machine.OSHA only attacked us.There was a DOL offical that provided me with inside info that only DOL would have known for they obviously knew they were lying where i used it on 14 diffrent timelined dates to proove that my employer lied to there federal investigators not only that it clearly showed they also conspired to lie.The perpetrators even faxed me on six of those dates documentation that hung themselves with cover sheets with there names, dates on them .This is just the tip of what we provided DOL and they did everything not to protect us.We had great work records there as well and we warned them for years(timelined) before we contacted OSHA.
Just to get to one point in our case was the second OSHA 11(C) investigator who turned out to know my brother and felt comfortable talking and did he,He told us that he got the first case in the U.S under the new seaman protection act that was created ater deepwater.Well he told me he didn’t give this program much hope either for like he told us"Gregg it’s like any other buisness,we have to show a certin level of success,they only want slam dunk cases” This was just part of what he told us.
There is almost no protection for whistleblowers and this should act as a warning for anyone who is thinking about coming forward.
I’m losing my home and everything i worked hard for all my life with no where to go.I have a great wife and two children and it’s killing me watching them go through this.Trust me keep your mouth shut if you ever want to work again.
Gregg S
PROUD NAVY DAD

Clark Baker (LAPD ret)

April 20, 2012, 5:48 p.m.

Gregg:

Your comments are haunting and my heart goes out to you.  When I went through retaliation, I thought that it was an isolated incident.  I now know that law firms like Horty-Springer and O’Melveny & Myers build bogus cases and destroy the careers of honest employees.

I’ve learned that employees MUST use extreme caution when exposing corruption in the workplace.  Unless you do EVERYTHING right and find the right law firm, you are more likely to get hurt than the people you report.  And when you get hurt, you become an example of what happens to those who speak out.

You can read about my case at http://exlibhollywood.blogspot.com/2005/05/whats-in-name.html

I heard there has been some babies born without brains who lived around those kind of spills, many years ago. Around that same place, the gulf….particularly Texas border with it. Was it BP who has done all that spilling just to jack up prices and using other people’s lives for it? Or are many of the other corporate killers that moved to Mexico also guilty of it as well?

Mary Galbraith

April 20, 2012, 7:45 p.m.

Ya know, it’s so easy to take shots at BP.  While I have no love for BP, what about all the folks in Louisiana and the Federal Government who were supposed to be REGULATING BP and making sure the big oil giant doesn’t go around cutting corners and creating unsafe environments?

On the BP payroll??

I quit buying their gas when I discovered the covert nature of their radiological recipies going into the atmoshere from combustion emissions.

Making the fine equal to the company’s profits for a number of years might make an impression. Also fining the top executives (after all, “the buck stops here”) everything they earn except a modest living wage (maybe the average salary of a lowest level worker in the company) might make an impression, also

There is a culture in this nation that believes money can buy anything aqnd even government is not above this philosophy! The list goes on with many private,corporate and government agencies just buying their way out of crime but if a homeless person steals a loaf of bread,then it’s off to the slam for years! Until leaders are held accountable,and I mean personally accountable,for their actions then the mentality of,“we can buy our way out of anything"will continue!

Who wins when companies like Arthur Andersen or Lehman Brothers disappear?  Certainly the employees suffer job loss, and not all of thrm can be at fault,...

Making responsible managers personally accountable in proportion to the harm they do to society or the environment sounds like a much better idea, but is it feasible?  In Europe we have the “limited” companies, where the core concept is not ruining the entrepreneur personally, if I understood it right.  But criminal acitvity should be considered separately from ineffective business decisions!

I think the only way to really keep corporate misbehavior down is to have real consequences to the corporate entity for malfeasance by their executives and employees.  This means “corporate jail”, e.g., delisting from the the stock exchanges, suspension of corporate privileges, automatic disbanding of boards, or immediate receivership by the government for a period of time.  If these kinds of consequences were out there for private enterprise, corporate boards, shareholders, and investors would actually think very carefully about the people they decide to put in charge.

Clark Baker (LAPD ret)

April 26, 2012, 3:24 p.m.

Sam - you have a good idea except that industry lobbyists have paid legislators to allow corporate felons to form shell companies to admit guilt.  Those shells typically pay fines that represent a fraction of the revenue generated by their scams.  This short video report describes how it’s done:

www-DOT-omsj-DOT-org/corruption/how-drug-companies-get-away-with-murder

This article is part of an ongoing investigation:
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The BP oil disaster in the Gulf has had untold health, economic and environmental effects.

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