Rein in Irresponsible Oil Drillers

Government Shouldn't Have Been Doing Business with BP in the First Place

David Madland and Karla Walter detail why “high-road” contracting would help prevent low-road disasters such as the BP oil catastrophe.

Read the full column (CAP Action)

Current regulations require that the federal government only do business with responsible businesses, but as the BP oil catastrophe illustrates, existing policies and procedures are woefully inadequate. As a result, BP PLC, which has a long record of breaking environmental, safety, fraud, and antitrust laws, was allowed to sign new lease agreements and get billions of dollars in new contracts. This puts workers, the environment, and taxpayers in harm’s way.

The “high-road” contracting proposal supported by the Center for American Progress Action Fund would ensure that the government has the power and information it needs to avoid doing business with irresponsible companies in order to prevent tragedies like the BP oil gusher from happening again.

Well before the explosion on the Deepwater Horizon oil drilling rig in the Gulf of Mexico, BP had a long history of lawbreaking that should have warned the federal government to refrain from entering into risky deals with the company. A complete record of BP’s violations is available at the Project on Government Oversight’s Federal Contractor Misconduct Database, but here are just a few examples:

  • A hole in BP’s Prudhoe Bay pipeline caused the largest ever oil spill on Alaska’s North Slope—200,000 gallons—in 2006, resulting in the temporary disruption of oil supplies to the United States. Investigators found that BP ignored warnings about corrosion in its pipelines and cut back on precautionary measures to save money. BP agreed to plead guilty to a violation of the Clean Water Act and paid $20 million in criminal fines, community service payments, and criminal restitution. Four years earlier, BP paid $150,000 in fines and penalties to Alaska’s Department of Environmental Conservation for delays in installing leak detection systems for the Prudhoe Bay crude oil transmission lines.
  • BP agreed to defer prosecution in 2007 for a one-count criminal information, which charged the company with conspiring to violate the Commodity Exchange Act and to commit mail fraud and wire fraud after traders for the company conspired to manipulate and corner the market for one type of propane. BP paid $303 million as part of the agreement, including $100 million in criminal penalties.

Read the full column (CAP Action)

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David Madland

Senior Fellow; Senior Adviser, American Worker Project

Karla Walter

Senior Fellow, Inclusive Economy