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BP: Class All the Way

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As you recall, BP was responsible for a tiny little oil spill in 2010 called the Deepwater Horizon disaster. This only crushed tourism to New Orleans for several months, made people afraid to eat Gulf Coast seafood, and reminded Americans for weeks of their reliance upon dirty energy (which they promptly forgot as soon as it wasn’t a story anymore). Not surprisingly, BP had to pay some damages for its actions. It settled a class action lawsuit for $4 billion. Now, as Michael Hiltzik reports, the company is bitter and angry and lashing out at people it doesn’t want to pay:

But in recent months BP has mounted a frontal assault on the settlement. The firm has placed full page ads in major newspapers, ridiculing supposedly fraudulent claims blithely paid by the settlement administrator, Louisiana lawyer Patrick Juneau — including $8 million to “celebrity chef” Emeril Lagasse.

Last week BP turned up the heat by sponsoring the daily Playbook web page and email blast aimed at Washington opinion makers, among many other people, by the Politico news website. Each day’s Playbook message from BP pinpoints a different, ostensibly absurd case with the tag line, “Would you pay these claims?” Sample: a $173,000 award to an “adult escort service.” (What, an escort service can’t be harmed by a fall-off in tourism?)

But that’s just the PR side of things. The company also has mounted an intensive legal attack on Juneau in federal court in Louisiana. It has obtained a restraining order preventing further payments for the moment and is seeking a permanent injunction so that the policies governing the settlement awards can be recrafted.

Nice. But I suppose this shouldn’t surprise us, not in a nation where corporations take greater control by the day, where the sheer whiff of responsibility to the public is something to be fought off like their corporate future depended upon it.

So far the courts are having none of it. And it’s unclear what the heck BP hopes to get out of it, since it is reminding everyone of their misdeeds. It agreed to the settlement. And no politician is going to defend BP here. It seems like a very bad corporate strategy, as Hiltzik points out.

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  • DrDick

    Come on now, Erik. You know as well as anyone that the modern corporation’s only obligation, moral or otherwise, is to maximize return to investors. Anything that interferes with that duty is clearly evil and unduly onerous.

    • Gwen

      Indeed. Why would BP care what the peasants think?

      • mike in dc

        “Corporate Social Responsi-what?”

        “I know what a shareholder is, but who are these ‘stakeholders’ you keep referring to?”

        • Lee Rudolph

          “The stakeholders are the guys flanked by pitchfork holders and illuminated by torch holders. Sir.”

          • Nathanael

            OK, I have to remember that one. May I use it?

      • ThrottleJockey

        I don’t think Emeril Lagasse is a peasant…at least not judging from his waistline. With 2 restaurants there though at least he has a rational claim. But $170K to an escort service? This is just pigs feeding at the trough. How about saving some funds for those who really got hurt?

        “The craziest thing about the settlement,” [plaintiff lawyer Kevin] McLean wrote in a solicitation letter, “is that you can be compensated for losses that are UNRELATED to the spill.”

        One of McLean’s clients, a real estate agent in Brandon, Fla., an hour from the Gulf, wants $80,000 from BP, reflecting a revenue dip in 2010 that “had nothing to do with the spill,” the attorney candidly admits. (The culprit was the bursting of the Florida real estate bubble.) Under the settlement, though, “that’s a good claim,” McLean says, “and we’re going to get paid.”

        He has millions of reasons to be confident. A construction company in northern Alabama, 200 miles from the coast, was recently awarded $9.7 million, even though it does no work near the Gulf of Mexico, according to court records. Attorneys are submitting claims on their own behalf. A law office in central Louisiana that actually enjoyed improved profits in 2010 collected $3.3 million.

        • elm

          Tourism to NO dropped due to the spill. I would imagine tourists are a major part of an escort services clientele. So it does not surprise me that an escort service (a completely legal industry even if it can be used as cover and a euphemism for an illegal industry) would have suffered significant economic costs due to the spill. Should the company not have filed for compensation because people might giggle?

        • rea

          And the thing is, BP could have taken the case to trial and made eveyone prove their claims. BP opted to settle instead, agreeing to pay a reduced amount to everyone who could show revenue dip during the relevant time period. THAT’S WHAT MAKES IT A SETTLEMENT–BP got something (a reduced payoff) in return for giving something (a reduced proof standard for damages). Now BP wants to take back what it gave while keeping what it got

          • DrDick

            They also saved much of the legal costs of litigation. They are just pissed off that people actually took them at their word.

        • Tristan

          Others have covered that BP already agreed to the settlement and that an escort agency (GASP SEX WORK? business? In NEW ORLEANS???) is in fact still a business, so I’m just going to mention this stunningly obvious IMPORTANT POINT: if BP hadn’t blown up an oil rig there wouldn’t be a ‘trough’.

        • DrDick

          That is rather a cheap shot frankly, and quite beside the point. Lagasse and the others lost business during this period and BP had agreed to pay for that. Lagasse is also a bush league minnow compared to BP, and they can certainly afford to pay all of the claims and more, though the top execs may have to forgo a few perqs for a month or two.

        • Attorney McLean’s letter referenced above was indeed absurd.

          Of course only those affected by the spill should be compensated. Just so happens that BP devised a formula to determine just that. Folks in the Gulf applied said formula. They sent in their claims based on same. Now BP dislikes said formula b/c their bean counters underestimated the harm they visited on the area’s economy. So instead of taking the blame, BP blames the very people it originally screwed. So we have a double screwing. Nice folks BP. I’d call them Bad People.

        • Learn the truth about Emeril and the escort service claim.

    • Pat

      Well, that’s true. And it’s a major foundation to modern capitalism. Unfortunately, a lot of corporate heads run their show as their own personal piggy bank. Like the old Calvin and Hobbes cartoon, every minute they can put off paying legal obligations like these is a good minute.

      Expecting any corporation to have a conscience or a sense of morality is a waste of time.

      • DrDick

        Which is why they need to be tightly bound and regulated, with draconian penalties for misdeeds not only for the corporation, but also for the sociopaths that run them.

    • carolannie1949

      No no no no, they don’t care about maximizing returns to investors, they only care about maximizing their personal payouts. Can’t say earnings, because they don’t earn anything, they just profit from our needs and wants

  • “And it’s unclear what the heck BP hopes to get out of it, since it is reminding everyone of their misdeeds.”

    If we learned only one thing from the Deepwater Horizon disaster and its aftermath, it’s that BP isn’t very well run. I’d just call this supporting evidence.

    • Barry

      “And it’s unclear what the heck BP hopes to get out of it, since it is reminding everyone of their misdeeds.”

      If there’s one thing that many corporations have correctly learned, it’s that even the grossest and best-publicized misdeeds don’t really cause harm. To them.

      • Nathanael

        *In the short term*.

        This is the problem. Corporate execs are seriously short-term thinkers. They’ve never paid attention to the long term. Well, being wanton criminals hasn’t hurt them since 1980… but 30 years is a short time.

        The massive misdeeds of the French nobility and royalty hadn’t hurt them for over 100 years when 1789 came around.

  • toberdog

    Originally, Kenneth Feinberg was the fund administrator. But he was removed and it’s not clear to me why that happened.

    • Lee Rudolph

      I’m betting that “Louisiana lawyer” has something to do with the new guy’s obvious expertise!

      • ThrottleJockey

        Really, could anyone be surprised by corrupt legal proceedings in the homeland of the Kingfish, Huey Long? A $173K to an escort service??? Seeing how BP already fucked over the coast, why pay to get fucked again?

    • elm

      He was originally hired by BP itself to administer their pre-lawsuit fund. During the lawsuit, the Plaintiff’s Steering Committee wanted someone else appointed, claiming he wasn’t giving out enough money.

  • montag2

    BP is not about to be one-upped by Exxon-Mobil (which, to date, has managed to get its fines for Exxon Valdez disaster reduced–a couple of times, including by the Supreme Court, IIRC–and which, even after what seemed to be a final decision on the matter, still hasn’t paid up.

    They can throw lawyers at this for thirty years and still save some money by doing so, so that’s exactly what they’re going to do. Attack ads are just a means of working the refs.

    The simplest solution, of course, would be to declare them eco-terrorists and throw them out of this country, but we save that appellation for our own citizens fighting the oil companies….

    • mpowell

      Yeah, but I don’t think this is going to work for BP the way it did for Exxon. The BP spill directly impacted way too many people…

      • Barry

        Yes, but people who (a) matter and (b) would fight back?
        Most of them would happily lick sludge off of a BP exec’s shoes than even *think* bad thoughts about their Masters.

        • montag2

          Umm, I kinda doubt that BP execs would let their Gucci-clad feet come within a thousand miles of, ick, sludge. When it comes to trudging in sludge, or licking it, for that matter, that’s a job for the little people.

        • mpowell

          The point is that it’s not remotely comparable to the Exxon spill which was an environmental problem but didn’t directly hit the pocketbook of a huge tourism industry. In aggregrate, the voters do matter.

    • postmodulator

      God, that’s like the lawsuit in Bleak House. There are attorneys with two decades of experience who have worked on it for their entire career.

    • Nathanael

      “The simplest solution, of course, would be to declare them eco-terrorists and throw them out of this country, but we save that appellation for our own citizens fighting the oil companies”

      Given the new Bush II/Obama precedents, the President could just declare them terrorists, kill all the Exxon and BP execs and lawyers with drones, and seize the companies as “proceeds of terrorism”.

      The fact that they don’t is informative.

    • Throw them out of the country. Interesting, that is exactly what the new novel The BP Corollary advocates. Former BP insider Rick Lacey, in this fictionalized account of the Deepwater Horizon disaster, lobbies for the extension of The Monroe Doctrine to include corporate misdeeds.

  • Peterr

    Obviously, the British are still nursing a grudge over Andrew Jackson and that whole Battle of New Orleans mess.

    British Petroleum is merely trying to right a historical wrong, before the 200th anniversary rolls around in Jan 2015.

    • ajay

      The White House is looking really nice these days and only very slightly flammable.

      • Peterr

        It’s also conveniently located between halfway between the offices of the US Oil & Gas Association and the Association of Oil Pipelines. The former sits a couple blocks to the east on K Street and the latter just a few blocks to the west on I Street.

        It’s all good.

    • allium

      The bioweapons division does see promise in those alligator cannons.

  • postmodulator

    And no politician is going to defend BP here.

    Is this intended as a factual statement? There were politicians defending BP before the hole was plugged.

    • Domino

      Wasn’t there some Republican from Texas who actually apologized to BP?

      • postmodulator

        Yeah, I had to Google it, but it was Joe Barton. Google also tells me he later apologized for the apology.

        • Pat

          And we think conservatives never apologize!

    • Rob in CT

      I thought of that too.

      Most politicians will probably avoid defending BP. But the “smear the beneficiaries of the settlement” approach can be used w/o overtly praising BP. Also, too: lawyers are scum, therefore we need “tort reform” (settlement caps). Politicians will be on those.

      • DrS

        Right, which is why you find out about some of the ‘dubious’ claims, or even just claims paid out to less desirables, like the escort service claim.

        Similar to Solyndra. A drop in the bucket is the corporate corruption that matters, not the billions given to oil companies.

        Anecdotes over data.

      • ThrottleJockey

        This reminds me of the WTC victim’s fund where the multi-millionaire traders at Cantor Fitzgerald got paid millions by taxpayers and the poor minimum wage slobs who waited tables at Windows on the World got $20K and a kick in the ass.

        Oh, fuck it, I’m 1,800 miles away but I may as well as submit a claim too. I visited the Gulf once. I was drunk & it was Mardi Gras, but fuck it, someone owes me. I spent $300 on that weekend and I don’t remember a damn bit of it!

    • NorthLeft12

      Agree 100% with your comment. Give them time and the elected right wing douchecanoes will be out in full force railing against the people receiving settlements as undeserving and greedy.

      Because we know that greed is bad for us peons.

  • The firm has placed full page ads in major newspapers

    I originally assumed none of these papers are with in a hundred miles of the impacted area, but this is BP we’re dealing with, so I wouldn’t be surprised if they sent the ads and a post-dated check to every paper in La.

  • rea

    What I don’t understand–BP has a legal issue in front of a federal judge regarding the meaning of a settlement. Why does it make sense to these people to take out ads in newspapers arguing the issue? Do they think that will help?

    • postmodulator

      I thought about this and came up with two possibilities:

      1) Obviously their ads are targeted at Washington opinion makers, if they’re in Playbook. They may be thinking they can get some fuckstick to insert language indemnifying BP in some bill in exchange for a sinecure at BP afterwards. (It’s happened before. Doesn’t even have to be a legislator, some staffer will do fine.)

      2) Like a lot of people inside a bubble, they may genuinely think that they’re victims of a horrible injustice, and that if they can just get their message out, the country will feel so guilty they’ll stop asking for money.

    • Mudge
  • Peterr

    Curiously, BP’s Gulf Spill-related “Investigations and Legal Procedings” page on the company website doesn’t say much abot their backpedalling on the settlement they agreed to.

    They’re quick to trumpet phrases like “BP has agreed . . .” (repeated multiple times in various forms) and verbs like “cooperate,” but then there’s this little nugget buried at the end:

    These agreements were approved by the court in December 2012 and in January 2013, although BP is challenging a recent ruling by the court regarding the interpretation of certain protocols established in the economic and property damages settlement agreement.

    Yes, says BP, we agreed to the settlement, but we don’t agree on the meaning of what we agreed to.

    This is where the judge should remind them that this is why they pay the big buck to their corporate lawyers, so that they know what it is they are signing BEFORE THEY SIGN IT.

    • montag2

      And here we have the corporate equivalent of “backsies!”

      They’ll be “diligently processing claims” at a glacial pace until every one of the claimants is dead, with a $9/hr clerk pressing the “DEL” key on the appropriate file each time an obituary comes in. Then they’ll start over anew with the heirs.

      By the time this whole thing is done, there won’t be any oil anywhere and BP will have changed their name to British Peat and will be overcharging for peat and mule dung.

  • Lurking Canadian

    Is prostitution legal in Louisiana? I can certainly see how a drop in tourism would harm the revenue stream of an escort service, but I confess myself surprised that they have legal redress in the courts to recover the loss.

    Yes, yes, I know escort services aren’t actually prostitution providers, but that distinction (as I understand it) requires that the authorities not look at it very closely. Applying for court-ordered remedies of lost income seems to be a good way to get yourself looked at very closely.

    • Rhino

      Don’t make the mistake of thinking the actual working girls will see any compensation.

      This isn’t compensation going to honest whores, this is going to pimps…

  • Samuel Knight

    BP is pressing their luck on this IF the Feds are willing to counter-attack. They had a long list of prior criminal convictions before the Deepwater Horizons’ Oil Spill. They’re guessing that the Feds don’t like to fight.

    And that they won’t be willing to just say they’re lying and their misleading.

  • Bruce Vail

    Let’s never forget that the spill was a result of an explosion on the Deepwater Horizon drilling rig that killed 11 workers, some of whom were apparently incinerated in a most horrible fashion.

    “Fire On The Horizon” by Jon Conrad and Tom Schroder is especially good.

  • Scott Lemieux

    But the money is totally being used to pay people millions of dollars to people who deliberately poured lukewarm coffee on themselves!

  • Roger Ailes

    “including $8 million to ‘celebrity chef’ Emeril Lagasse.”

    BAM!

    • Rhino

      A man running a business which, in the aftermath, kept staff on despite not having any customers, worked hard to place their employees with restaurants in other cities.

      Or are restauranteurs employing hundreds of people somehow illegitimate to receive compensation?

  • Roger Ailes

    $173,000 to a Louisana escort service.

    Someone’s Vitter bitter.

    • postmodulator

      That was extremely well done.

    • Rhino

      Well played indeed.

  • Pingback: BP: Class All the Way | MemePosts()

  • Ian

    Michael Hiltzik is a fucking treasure. How he keeps his job in the business section (!) of a Tribune-owned newspaper is beyond me.

    • He’s definitely on the short list of the best reporters working in newspapers.

      • elm

        I actually just discovered him today between your link and Scott’s in the ACA story. Going over some of his archives, I’m thinking you’re right. I’ll have to remember to check him out more frequently.

  • Mike G

    Corporations are people too. Sociopathic bullying asshole people.
    No wonder Rmoney was so fond of them, they have a lot in common.

  • Nathanael

    This isn’t strategy.

    This is the behavior of, as Mike G says, “Sociopathic bullying asshole people.”

    They feel that they deserve to be bowed down to and they will throw fits if they aren’t bowed down to. They will actually sabotage their own company in order to do this.

    If you’ve read _Theory of the Leisure Class_, this behavior from BP’s executives will make perfect sense to you. It’s crazy behavior, but it’s a form of learned craziness which is endemic in the upper class.

  • Sociopath BP: Mike G and Nathanael refer to corporations as sociopathic. My novel, The BP Corollary, makes the case that BP in particular is a sociopath. It explains how it happened and compares BP’s actions convincingly to the characteristics of a sociopath. Any lawyer wanting to make that case in court is welcome to use the book’s logic.

  • BP’s cost-cutting mentality is re-asserting. Not long ago a page like this would have been littered with BP advertising. Instead, there’s an Amazon ad that includes my anti-BP novel, The BP Corollary. This is an opportunity to strike back and try to set public opinion right. BP spent $100 million to perpetuate a fiction. As the media feels BP advertising money dry up, we should find it easier to get publicity for the truth!

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