Women of the Spill – and the Oil Men Who Love Them

Be The One,” a campaign urging citizens to petition the Congress toward passing and funding a comprehensive Gulf Coast restoration plan, has drawn criticism from some who point to the group’s corporate oil and gas industry backers.

Brenden DeMelle and Jerry Cope reported in The Huffington Post on July 28, “a group of oil companies including BP, Shell, ExxonMobil, Citgo, Chevron and other polluters are using a front group called ‘America’s Wetland Foundation’ and a Louisiana women’s group called Women of the Storm to spread the message that U.S. taxpayers should pay for the damage caused by BP to Gulf Coast wetlands, and that the reckless offshore oil industry should continue drilling for the ‘wholesale sustainability’ of the region.”

Be The One draws on celebrity endorsements from Sandra Bullock, Dave Matthews, Lenny Kravitz, Emeril Lagassi, John Goodman, Harry Shearer, Peyton and Eli Manning, Drew Brees, and other stars with connections to New Orleans. To her credit Sandra Bullock – who bought a mansion in the city’s posh Lower Garden District several years ago – withdrew her endorsement of the campaign after learning about the role of oil and gas companies in funding the America’s Wetland Foundation. But the influences of corporate oil and gas goes much deeper into this campaign than just America’s Wetland Foundation and its fiscal supporters.

Women of the Storm is the coordinator of Be The One, and the group’s founder Anne Milling has said she sees no problem with the grassroots organization’s partnership with America’s Wetland Foundation. DeMelle and Cope noted, however, that Anne Milling is married to King Milling, chairman of America’s Wetland Foundation, making the relationship between her community group and the industry front group more than cozy. They go on to note other partnerships between the two organizations and their overall coordination of a single message: restoring the Gulf and making the region “sustainable” means keeping the oil and gas spigots flowing at full force.

How is it that Women of the Storm came to be such a pro-oil interest group? Truth is, Women of the Storm was never a grassroots organization. It began as an elitist post-Katrina lobby that emphasized broad social and economic issues related to reconstruction of the city and region. Women of the Storm was founded by Milling and other mavens of New Orleans’ uptown elite, who convened strategy meetings in their St. Charles and Audubon Place mansions to create a kind of women’s auxiliary group, one that would keep Congress’ attention on southern Louisiana, and support the corporate and political campaigns run by their husbands to restore the region’s dominant extractive and environmentally destructive industries as quickly as possible. From its very beginning, Women of the Storm was a pro-oil and gas lobby by virtue of its leadership, positions they would or would not take on major legislation. They were also strong supporters of tax credits and the major housing assistance program that cut checks to homeowners, but left renters with nothing.

Women of the Storm organized press conferences, wrote letters, held vigils and used their direct access to the media and the Louisiana Congressional delegation to lobby Congress for key pieces of post-Katrina legislation that would facilitate the rebuilding of New Orleans and the regional economy – along specific lines, of course. One of these bills resulted in greatly expanded deepwater exploration and drilling, with the promise that billions of federal royalties from well production would be turned back over to Louisiana and other Gulf states by 2017, creating a new revenue stream for the region’s legislatures. The funds are supposed to be used for coastal restoration programs, but, so far, the states have seen piddling amounts. The point of the law for the oil and gas industry, however, was to open up vast new reaches of the Gulf. Women of the Storm chalked it up as a political victory. More than a few of their husbands and family members chalked the bill up as another profit-making opportunity.

Anne’s husband R. King Milling isn’t just chairman of America’s Wetland Foundation, president of the Whitney Bank and its parent company, Whitney Holding Corporation from 1984 to 2007, R. King Milling personifies the elite of New Orleans. His bank, the largest in Louisiana, finances the oil and gas industry and depends upon its growth. Whitney Bank capital is heavily vested in offshore production, chemical refining, shipping, and other sectors of the economy that have been directly responsible for the destruction of the marshes and swamps. The wetlands used to provide safety from storms, food and a home for the millions who live along the Gulf Coast. Now, after decades of oil industry assault, they are dying. Whitney Bank holds major investment stakes in oil industry firms like Hornbeck Offshore Services, which operates a 66-acre dock in Port Fourchon, hauling drilling mud, fuel and lube to rigs like the Deepwater Horizon. Upriver assets held by Whitney Bank include chemical refineries like CF Industries, which operates one of the nation’s largest petrochemical fertilizer factories in Donaldsonville, Louisiana. (Whitney Holding Corp., “Quarterly Holdings or Combination Report by an Institutional Money Manager,” Securities and Exchange Commission, form 13F, March 31, 2006.)

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As the oldest bank in New Orleans, Whitney was there during the first days of the oil rush. The bank and its holding company profited smartly from the expansion of oil and gas drilling into the swamps after World War II. Whitney made loans to the multitude of companies cutting canals and dumping spoil banks through the wetlands, building drilling rigs and establishing services. In other words, Whitney Bank quite literally financed the destruction of Louisiana’s wetlands, building a fortune for its shareholders and executives along the way.

In 2009, Whitney Bank noted in its annual report that it had:

“approximately $894 million in loans to borrowers in the oil and gas industry, representing approximately 11% of its total loans outstanding as of that date. The majority of the bank’s customer base in this industry provides transportation and other services and products to support exploration and production activities.” [Whitney Holding Corp. “Annual Report,” Form 10K, December 31, 2009, Securities and Exchange Commission.]

As Whitney Bank’s Annual report states, “If there is a significant downturn in the oil and gas industry generally, the cash flows of Whitney’s customers’ [sic] in this industry would be adversely impacted. This in turn could impair their ability to service their debt to the Bank with adverse consequences to the Company’s earnings.” (Whitney Holding Corp. “Annual Report,” Form 10K, December 31, 2009, Securities and Exchange Commission.)

Because of the bank’s exposure in real estate and other sectors of the economy, Whitney Holding Corporation was the recipient of a $300 million TARP bailout in December 2008. Whitney Bank President John C. Hope, III explained, “we see TARP as an insurance policy,” he said. “That when all this stuff is finally over, no matter how bad it gets, we’re going to be one of the remaining banks.”

By June 2010, the bank’s executives judged that the Deepwater Horizon’s short-term impact on their investments in offshore oil would be “minimal.” However, the situation could rapidly change if the moratorium on deepwater drilling remained in place because 56 percent of the bank’s oil and gas loans were for “exploration & production” and “drilling and pre-drilling,” with only 44 percent invested in supply and transport services to currently operating platforms. (Whitney Holding Corp, “Whitney Holding Corporation 2nd Qtr. 2010 Results,” Securities and Exchange Commission, form 8-K, June 30, 2010.) Even these latter categories would be impacted, however, as the demand for services could flatten or decline with fewer large OCS wells requiring supplies from Louisiana’s gargantuan oil port in Fourchon. Whitney executives concluded:

“Loans outstanding to the O&G sector totaled $762 million, or approximately 10% of total loans at June 30, 2010. Based on discussions with customers in this industry, and currently available information, management expects minimal near-term impact to their business operations and to the performance of our loans in this portfolio sector. Management’s current assessment could change depending upon the length of the moratorium on deepwater drilling in the Gulf and the ultimate impact of this disaster on the cost of drilling operations in the future.” [Whitney Holding Corp, “Whitney Holding Corporation 2nd Qtr. 2010 Results,” Securities and Exchange Commission, form 8-K, June 30, 2010.]

R. King Milling owns 306,321 shares of Whitney Holding Corporation stock. In April of 2010, days before the Deepwater Horizon exploded and sank into the Gulf, Whitney Holding Corporation shares were valued at $15.29 each. R. King Milling’s holdings were worth roughly $4,632,000. As of July 21, the bank’s shares had hit a 52 week low, trading at $7.41.

NASDAQ traders had devalued the bank partly because of the Deepwater Horizon disaster and uncertainty about the future of oil and gas drilling in the Gulf. Milling’s current ownership stake in the company has been devalued by half. On July 14, Whitney Bank posted the largest loss of any corporation in the exchange at the close of trading – an 18 percent drop. (Associated Press, “Nasdaq stocks posting largest percentage decreases,” July 14, 2010.)

Financial industry analysts have been projecting steep loses for Whitney Bank since the gusher began flowing. (Reuters, “Corrected: Oil spill muddies bank M&A in U.S. Gulf,” July 15, 2010.) Anne and R. King Milling’s connection is only one of many in the oil soaked region and its elite, all of whom – as Judge Martin Feldman taught us – seem to have a finger in one oil well or another.

Women of the Storm Executive Committee member Rebecca Currence came to New Orleans in the early 1960s with her newlywed husband Richard. Richard earned a law degree from Tulane, and immediately established himself as a rising star in offshore Gulf oil and gas production. (“Woman of the Storm,” Wake Forest Magazine, June, 2008.) With stints running operations at Tidewater Marine Services, Gulf Fleet Marine Corporation and even Zapata Gulf Marine Corporation (famously begun by George H. W. Bush in 1953), Currence spent four decades running offshore drilling companies as far away as Africa and the North Sea.

Currence has owned major stakes in offshore oil and gas companies like Tidewater, Ambar, Inc., Gulfmark Offshore, and made an honorary appearance at Tidewater, Inc.’s 54th annual shareholder’s meeting in 2010. Along with the Milling’s Whitney Bank, Currence has owned stock in Hornbeck Offshore Services, Inc. Hornbeck is now owned by Tidewater, having been bought out in the late 1990s, an acquisition that helped catapult the company into the billion-dollar club.

Tidewater remarked about the Deepwater Horizon disaster in its 2010 annual report: “the recent rig catastrophe in the Gulf of Mexico could have a significant impact on exploration and production activities in United States coastal waters that could adversely affect the U.S. operations of the Company.” Tidewater concluded:

“Among the possible future consequences of this event are additional regulatory oversight and control with respect to offshore drilling, a potential ban or restriction on oil and gas exploration in certain offshore areas, particularly deepwater drilling, and an increase in insurance premiums for casualty insurance that may be more difficult to obtain. Any such development could reduce demand for the company’s services in the U.S. GOM. The events in the U.S. GOM may also have ramifications in foreign exploration areas, which could adversely affect our international operations as well, although it is impossible to assess at this time.” [Tidewater, Inc. “Annual Report,” Form 10K, March 31, 2010, Securities and Exchange Commission.]

Lucky for Tidewater, the Currences and the Millings, the moratorium on deepwater drilling was lifted by a judge with investments in offshore oil.

Upset with critics who have unmasked big oil’s front group America’s Wetland Foundation and the dubious message being promoted in their Be The One campaign, the Women of the Storm have posted a rebuttal on the home page of their web site:

“There’s a saying, often attributed to Mark Twain, that ‘a lie can be halfway around the world before the truth gets its boots on.’ We want you to know the truth at www.restorethegulf.com, in the face of misleading information and poor reporting that’s out there in the blogosphere. The Restore the Gulf campaign was created and funded entirely by Women of the Storm. We received support from many organizations, though it should be noted that the campaign has received no money whatsoever from either America’s Wetland Foundation (AWF) or any oil companies.”

So, would Women of the Storm still have us believe that their money and interests are in no way connected to any “oil companies”?