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Corporate and Political Corruption: The Lessons Not Learned From the Deepwater Horizon Disaster

Seventy-five percent of BP’s court fine is tax deductible, meaning that US taxpayers will foot most of the bill for the largest oil spill in history.

Day 30 of the Deepwater Horizon oil spill in the Gulf of Mexico; June 1, 2010. (Photo: Green Fire Productions)

As we approach the six-year anniversary of the Deepwater Horizon oil rig explosion that killed 11 people and devastated much of the Gulf of Mexico ecosystem, recent news stories paint a very clear picture that no one has learned anything from this disaster.

On Monday of this week, the US Department of Justice announced that BP will pay $20 billion in civil and federal penalties and fines resulting from its role in the oil spill. This total amount was approved by Judge Carl Barbier who has overseen much of the litigation from the Deepwater Horizon disaster. Judge Barbier ordered that the $20 billion, which includes a $5.5 billion Clean Water Act violation fine, be paid out over 16 years at a rate of $1.3 billion per year.

In response to the deal, Attorney General Loretta Lynch made the following statement: “Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken.”

But here’s the story that the Justice Department didn’t want the public to know: 75% of this fine is tax deductible for BP, meaning that US taxpayers will foot most of the bill for the largest oil spill in history.

The economic costs to the Gulf Coast are not yet fully calculated — some analysts say that it will take decades before the full cost is known — but what is known is that the money that BP has already paid in both civil suits and cleanup costs has not gone far enough to rebuild the Gulf Coast economy. Billions of dollars in tourism, commercial fishing, and environmental destruction have already been lost in the last six years, and the fishing industry may never fully recover.

And now the taxpayers — the victims along the Gulf Coast — will be forced to pay for the damage caused by BP, Transocean, and Halliburton. Sure, BP will take a hit for a few years, but the yearly fee is only a small fraction of their total yearly profits, especially when their government-sanctioned tax write-offs are factored into the equation.

As if sticking it to the victims wasn’t bad enough, politicians in Washington are trying to weaken draft safety standards to prevent another disaster of this caliber.

Republicans in Washington are working to ease yet-to-be-released rules on the oil and gas industries. Representatives Rob Bishop (R-UT) and Ken Calvert (R-CA) have sent a letter to the Office of Information and Regulatory Affairs asking the agency to re-evaluate the forthcoming safety measures and to reopen the public comment period on the rules. It is worth noting that Bishop’s top industry donors are oil & gas companies, which have given him a career total of $325,000, and Calvert has received a career total of $301,000 from the industry.

The rules — which the Interior Department’s Bureau of Safety and Environmental Enforcement is currently working to finalize — would require stricter safety standards, better equipment, and more stringent inspections of deepwater drilling operations in order to prevent another blowout.

In their letter, the Representatives say that the new rules would make the oil industry “unable to move forward on approving multi-billion dollar investments to develop our nation’s offshore energy resources.”

What they really mean is that the new rules would force drillers to fork over a few more dollars in order to prevent another environmental catastrophe.

In theory, the industry should welcome these new standards, as they have the potential to prevent another costly disaster. After all, the fiduciary duty of corporate CEOs is to make as much money as possible for shareholders (they are legally required to do this), so spending a few dollars here and there to avoid paying billions in federal fines and civil lawsuits should seem a justifiable and intelligent option.

But in today’s corporate methodology, costs of disasters are actually built into company budgets. We know today that BPhad already performed a cost-benefit analysis at their other factories where they figured out that it’s cheaper to pay off the victims of a disaster than it would be to implement new safety measures to prevent these disasters. And with friends like those in the Department of Justice and Congress, they understand that they can externalize the majority of any penalties that they incur.

The most disgusting part of the story is the spin and deception that has flowed from both politicians and BP itself since the early days of the oil spill.

The early attempts to mislead the public came from BP when they claimed that they had no way of measuring how much oil was flowing from the broken wellhead, even though they had bragged one year earlier about inventing the technology to do just that.

Then we had Republican Representative Joe Barton who apologized to BP for Congress’s allegedly harsh treatment of the company following the spill.

After that, BP put their PR machine into hyperdrive and began demonizing the victims along the Gulf Coast as “greedy.”Politico even let BP write an op-ed filled with fallacies about the “fraud” committed in the claims process and how the Gulf Coast was all cleaned up and oil-free.

And of course we had Republican Senator David Vitter from Louisiana who claimed that the moratorium on offshore drilling was killing the oil industry. The reality is that the offshore drilling moratorium only applied to the leasing of new deepwater rigs and didn’t affect any rigs currently in operation. The moratorium was quietly lifted a few weeks after the BP spill with very few safety caveats attached.

The truth is that BP is getting off the hook for their negligence that killed 11 people and destroyed the Gulf of Mexico for a generation. And their pals in Washington are the ones allowing this to happen.

Meanwhile, residents along the Gulf Coast are still seeing tar balls wash ashore, the fishing industry is still in shambles, and the negative health effects of the oil and the toxic dispersants used to clean it up continue to rise.

BP didn’t suffer as a result of the spill; Politicians didn’t suffer; The only suffering has been from the families of the 11 dead workers and the millions of people who saw the environment that they had grown up loving destroyed by a careless corporation hell-bent on making a few more dollars.

And judging by how things are currently going, it’s only a matter of time before the next disaster hits.

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