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Business
May 11, 2010

Will BP’s Washington connections help it now?

WASHINGTON DC, United States – WITH millions of dollars invested in campaign donations and an all-star lobbying team, BP executives could give an advanced class in how to build influence in Washington. But with millions of gallons of leaking oil bearing down on Gulf Coast beaches and bayous, they could also teach how to lose it.

Even pro-oil Republicans — whose 2008 vice-presidential nominee, Sarah Palin, made “Drill, Baby Drill!” a party rallying cry — are demanding answers. At least for the moment, it appears that whatever clout BP has accrued, the oil company is unlikely to get delicate handling from lawmakers investigating the oil rig disaster when oversight hearings begin this week on Capitol Hill.

“I’m sure it’s not helpful,” said Senate Minority Leader Mitch McConnell, a Kentucky Republican, asked what impact the spill would have on BP’s political influence. “This is a disaster of major proportions, and we need to get to the bottom of what happened.”

BP-related campaign and lobbying spending makes the political outlays of Toyota, another major foreign-based company under investigation by Congress for its failings on safety issues, look faint by comparison.

British-based BP, No 4 on Fortune magazine’s list of the world’s largest companies, spent US$16 million last year lobbying Congress and the federal government, and US$3.5 million in the first three months of this year. That was before its rig disaster led at least a half-dozen congressional committees to start investigating. Japanese automaker Toyota, No 10 in the Fortune ranking, spent US$5 million lobbying last year and US$880,000 in the first quarter this year.

BP employees donated at least US$160,000 to congressional candidates and their parties so far this election cycle. When campaign donations from BP’s lobbying corps of roughly three-dozen people and their firms’ political action committees, or PACs, are added to BP employees’ total, the political giving since January 2009 tops US$1 million, according to an analysis by The Associated Press. The firms lobby for multiple clients, not just BP.

President Barack Obama’s campaign was the top recipient of BP employees’ money in the 2008 election: US$71,000.

Asked about the donations, White House spokesman Ben LaBolt said Obama “didn’t accept a dime from corporate PACs or federal lobbyists”.

“He raised US$750 million from nearly four million Americans,” LaBolt said. “And since he became president, he rolled back tax breaks and giveaways for the oil and gas industry, spearheaded a G-20 agreement to phase out fossil fuel subsidies and made the largest investment in clean energy in American history.”

In a reflection of the Obama administration’s and BP’s mutual interest in developing fuel alternatives to gasoline, Obama named Steven Koonin, BP’s former chief scientist, the Energy Department’s undersecretary for science.

The other top recipients of BP employee 2008 election-giving both sit on the Senate Committee on Energy and Natural Resources, one of the panels investigating the spill. Obama’s Republican presidential rival, Sen John McCain of Arizona, received US$37,000. And US$16,000 went to a senator whose state is on the receiving end of much of the spilled oil, Democrat Mary Landrieu of Louisiana, according to figures compiled by the nonpartisan Center for Responsive Politics.

The oil and gas industry is a big employer in Louisiana. Landrieu supports offshore drilling and has repeatedly said rig fires are few and far between, a point she made at a committee hearing last November when Sen Robert Menendez, a New Jersey Democrat, displayed a photo of a summer blaze on a rig off Australia’s coast.

“The fact is, these things happen,” Landrieu said at the time, estimating there are about 20,000 such rigs. “So, 19,999 were not on fire.”

Landrieu doesn’t believe BP-related campaign cash is any reason to step away from the committee’s investigation, nor does she see any reason to give the money back, spokesman Aaron Saunders said, adding that she has called for a full investigation of the BP spill.

“I think her record speaks for itself,” Saunders said. Landrieu met last week with BP Group chief executive Tony Hayward.

The percentage of BP employee-giving that goes to Democrats has inched up since they took control of Congress and the White House. It has gone from 30 per cent Democrat and 70 per cent Republican a decade ago to a split of about 40 per cent Democrat/60 per cent Republican in the last election and so far this election cycle.

All of BP’s political spending, particularly on lobbyists, has given the oil company one thing it desperately needs — access to members of Congress to tell the story of the rig spill and response its way, and sophisticated navigators of Washington to help do it.

BP is working with the Brunswick Group, an international communications and crisis management firm, to craft its public response to the spill.

Su-Lin Nichols, a Brunswick director, said Hayward was in Washington last Monday and Tuesday and Hayward “is in regular contact with officials in Washington to ensure close co-operation” on the spill response. Brunswick has teams in Washington, on the Gulf Coast and in London, where Brunswick and BP have corporate offices.

BP’s Washington lobbyists include well-connected people from both major parties, some of them visitors to the White House.

Lobbyist Tony Podesta is a prolific Democratic fund-raiser and brother to John Podesta, who headed Obama’s transition team. Tony Podesta appears at least seven times in visitor logs released by the Obama White House. Six of Podesta’s visits were on behalf of clients, but he and his firm said none was BP related. The other visit was to Vice-President Joe Biden’s residence for a dinner in honour of the Greek Orthodox Church patriarch.

The White House confirmed that BP lobbyists have been to the White House complex, but said only two visits were BP related: Two of the oil company’s in-house lobbyists, Karen St John and Michael Brien, attended 2009 meetings on EPA standards, according to the Office of Management and Budget (OMB). The OMB accepts all requests for meetings during the review of such regulations and discloses the meetings.

BP declined to talk about its lobbying efforts or comment on White House visits.

BP has many other Washington connections:

* At least four lawmakers on committees investigating the spill reported family stock holdings in BP or two other companies involved in the rig disaster: Halliburton and Transocean, according to their most recent financial disclosure reports, filed last year.

Sen John Kerry, a Massachusetts Democrat, disclosed family stock holdings of up to US$15,000 in BP and US$65,000 to US$150,000 in Transocean. Asked whether he would recuse himself from the investigation in light of that, press secretary Whitney Smith called the question “preposterous”.

“Senator Kerry has been the Senate’s best environmental champion for more than 25 years and next week will unveil legislation to end our dependence on foreign oil,” Smith said.

* BP has had several Washington insiders on a company advisory council, including former Senate Democratic leader Tom Daschle, who served on Obama’s transition team on health care and was his original pick for health and human services secretary; former Republican Sen Warren Rudman; former New Jersey governor and former EPA administrator Christine Todd Whitman; former Clinton White House chief of staff Leon Panetta; and former Sen. Alan Simpson, a Wyoming Republican.

* The company counts current and former employees on at least three federal advisory panels: NASA’s Aerospace Advisory Panel, the National Petroleum Council, and the Energy Department’s Unconventional Resources Technology Advisory Committee.

* BP is a major federal government contractor and grant recipient. It has reaped at least US$8.6 billion in federal contracts and millions of dollars in grants since budget year 2000, according to figures compiled by the nonpartisan OMB Watch’s FedSpending.org.

* The company gave US$10,000 to US$25,000 to former President Bill Clinton’s foundation, his donor list shows.

Even before the disaster, BP’s activities put it at odds with government objectives on at least one issue: The US goal of starving the Iranian government of the money it needs to develop nuclear weapons. BP has interests in and is the operator of two oilfields and a pipeline outside Iran in which the National Iranian Oil Co and an affiliated entity have interests, BP disclosed in its 2009 annual report, adding that it complies with US trade sanctions on Iran.

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