Workers and Taxpayers Beware | Rena Steinzor

A scant five days before the Department of Interior opens a new round of bids for oil leases in the
Gulf of Mexico, the EPA has blinked, pronouncing BP, the incorrigible corporate scofflaw of the new
millennium, once again fit to do business with the government.
To get right to the point, the federal government's decision that BP has somehow paid its debt and
should once again be eligible for federal contracts is a disgrace. Not only does it let BP off the hook,
it sends an unmistakable signal to the rest of the energy industry: That no matter how much harm
you do, no matter how horrid your safety record, the feds will cut you some slack.
Back in 2012, the agency's intrepid staff had finally gotten permission to pull the trigger on the
company, de-barring it from holding any new U.S. contracts on the grounds that it was not running
its business in a "responsible" way. Undoubtedly under pressure by the Cameron government and
the U.S. Defense Logistics Agency, BP's most loyal customer, the EPA settled its debarment suit for
a sweet little consent decree that will try to improve the company's sense of ethics by having
"independent" auditors come visit once a year.
To review the grim record: BP, now the third-largest energy company in the world, is the first among
the roster of companies that have caused the most memorable industrial fiascos in the post-modern
age.
Its best-known disaster, the explosion aboard the Deepwater Horizon, a drilling rig moored in the
Gulf of Mexico that BP had hired to develop its lease of the Macondo well, killed 11 and deposited
205 million gallons of crude oil along the southern coast of the United States -- the worst
environmental disaster in American history.
In a troubling precursor, another explosion killed 15 and injured 180 at the company's Texas City
refinery in July 2005. This incident happened even after the plant manager there had gone on
bended knee to John Manzoni, BP's second in command worldwide, to plead for money to address
severe maintenance problems that jeopardized safety at that plant after a consultant surveying
refinery workers reported that many thought they ran a real risk of being killed at work. Those fears
were warranted, it turned out.
Also in 2005, 200,000 gallons of oil spilled from a BP pipeline on Alaska's North Slope.
Voluminous investigations by private and government sources attributed all of these incidents to
frenetic growth as the huge corporation's larger-than-life CEO, Lord John Browne, and his handful of
top aides, nicknamed the "Teenage Mutant Ninja Turtles," raced through the late 1990s and early
2000s to transform BP into the largest oil company in the world. BP swallowed American
competitors like Amoco and Atlantic Richfield but neglected to knit management of the two
companies together effectively. As top managers in London eyed the accumulation of burdensome
debt that accompanies breakneck acquisitions, they decided to cut costs with ruthless intensity. To
enforce these strictures, top executives in London retained tight control over expenditures, down to
the lowest levels of BP's international operations.
Grim warning signs emerged that better-looking, investor-friendly financials were being produced at
the expense of safe and efficient operations at all of BP's facilities. Billions in deferred
maintenance costs were mounting, turning equipment that was already past-its-prime dangerous.
Frontline supervisory jobs were cut, leaving potentially high-hazard processes unsupervised.
Contractors did shoddy work, but BP employees were not around to discover it. Troubled
managers began to send warnings back to headquarters, even commissioning reports by outside
consultants on worker morale and safety concerns, only to be ignored when bolstered by this
evidence, they appealed to top management for less drastic cuts.
BP lawyers settled three separate criminal cases against the corporation during the period leading
up to the Macondo explosion and signed record-breaking civil settlements for violations of worker
safety and environmental laws. But it often ignored the terms of such agreements. For example,
after Texas City, it paid $20 million in penalties for violations of worker safety laws. When
government inspectors revisited the plant a few years later, though, they discovered the company
had not complied with the vast majority of the reforms it had been ordered to implement. New
penalties of $50 million were assessed, but the Macondo blowout proved that worker safety
continued to be a low priority.
For a while, it looked as if the blowout would be the straw that broke the camel's back. BP sold $38
billion in assets to pay for spill cleanup, government penalties, and individual claims. It plead
guilty to multiple counts of federal criminal violations, paying a stratospheric $4 billion in
fines. The federal government debarred the company, prohibiting it from receiving new leases to
drill for oil in either the Gulf of Mexico or Alaska. For two years after the incident, company
executives carefully kept a low profile, waiting for all the negative attention to die down.
Then in a startling turnaround, the giant company emerged from two years of adopting a hangdog
public posture and instead pivoted 180 degrees onto the offensive. It began placing full-page ads in
the New York Times and other major newspapers asserting that the alleged "victims" of the
Deepwater Horizon spill were taking advantage of its great generosity. Senior managers, especially
Robert Dudley, its first American CEO, have pronounced the company ready to assume business-a-
-usual: "I think we have done an enormous amount to change the shape of BP and the portfolio and
the way it manages risk. After that terrible accident in 2010, we had no choice. But that also allowed
us to refocus almost our purpose as a company."
How long should BP have remained on probation, barred from doing business until the American
workers and taxpayers have some confidence it has really changed? How about the same time period
during which it insulted our trust -- at a minimum, the five years between Texas City and Macondo,
with the Alaskan oil spill in between.