25 Years After Exxon Valdez, BP Was the Hidden Culprit

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ValdezCleanUpPalastBy Greg Palast. Republished from TruthDig.

A crew cleans up oil six years after the Exxon Valdez spill in Prince William Sound, Alaska. Photo by James McAlpine, © Palast Investigative Fund.

Two decades ago I was the investigator for the legal team that sold you the bullshit that a drunken captain was the principal cause of the Exxon Valdez disaster, the oil tanker crackup that poisoned over a thousand miles of Alaska’s coastline 25 years ago on March 24, 1989.

The truth is far uglier, and the real culprit—British Petroleum, now BP—got away without a scratch to its reputation or to its pocketbook.

And because BP’s willful negligence, prevarications and fraud in the Exxon Valdez spill cost the company nothing, its disdain for the law, for the environment and for the safety of its workers was repeated in the Gulf of Mexico with deadly consequences, resulting, two decades later, in the Deepwater Horizon disaster.

Just this month, the Obama administration authorized BP to return to drilling in the Gulf.

It would be worth the time of our ever-trusting regulators to take a look at my Exxon Valdez BP files. They would see a decades-long pattern of BP’s lies, bribes and cover-ups that led, inexorably, to the Deepwater Horizon blowout—and that continue today within BP’s worldwide oil operations.

Here is a sample from my files on BP from the original Exxon Valdez fraud and racketeering investigation:

Fraud No. 1: The Emergency Sucker Boat fraud

Containing an oil spill—preventing spilled crude from spreading to the shore—is not rocket science.

As the principal owner of the Alaska Pipeline and Terminal, BP, not Exxon, was designated by law to prevent oil spilled by the Exxon Valdez from hitting the beach. It was BP’s disastrous failures, more than Exxon’s, that allowed the oil to devastate Alaska’s coast.

To contain a spill all you need are rubbers and suckers. It works like this:

If a tanker, oil rig or pipe bursts open, you surround it with a giant rubber skirt known as “boom.” Then you suck the oil out through vacuum hoses on board special “containment” ships. The containment ship, which lays out the boom and skimmer hoses, is the firetruck of oil spills. You simply don’t let tankers out of port unless a containment ship is ready to roll. It’s against the law.

But the law has never meant much to BP.

In May 1977, as the first tankers left Valdez, BP executives promised the state of Alaska that no tanker would leave port unless there were two containment barges at the ready and loaded with boom, with one placed near Bligh Island.

In fact, on March 24, 1989, when the Exxon Valdez ran aground, right at Bligh Island, the containment barge was far away in Valdez, locked in a dry dock, its boom and hoses under Alaskan ice. As a result, by the time the emergency oil spill vessel got to the stricken ship, the oil slick was a hundred miles in circumference and beyond control.

Two decades later, I watched fireboats uselessly spraying the burning oil on the Deepwater Horizon. Once again there were no BP skimmer barges, no boom surrounding the rig. Just as in Alaska, the promised spill containment operation was a con. By the time the Navy set out 400 miles of rubber boom days later, the slick was already as big as Cuba and slathering the Gulf shores.

Recently, Chevron and other big oil giants, now drilling the Gulf, have printed a series of full-page ads in papers across America touting their new state-of-the-art oil spill containment operations. Hey, thanks. But these are the same vessels BP and its fellow Gulf drillers promised before the Deepwater Horizon blew apart.

Fraud No. 2: Ghost Crews

There’s no sense having a firetruck without firemen. And so, years before the Exxon Valdez grounding, Alyeska, the oil company consortium headed by BP, promised the U.S. Department of the Interior and the U.S. Congress, under oath, that the oil shipper would employ a trained and equipped crew around the clock to jump from helicopters, if needed, to contain an oil spill. My clients, the Chugach Natives of Alaska, agreed to give up ownership of the land under the Port of Valdez to the oil companies in return for those jobs.

The night the Exxon Valdez grounded, Chugach Natives watched from the beach at nearby Tatitlek Village as the tanker headed into the reef. They could have prevented the disaster—but they were helpless: BP had fired them.

In my team’s investigation for the Chugach, we discovered that, to save money, BP’s Alyeska simply drew up lists of nonexistent emergency spill response workers or wrote down names of untrained, unequipped dockworkers: an imaginary crew to man phantom emergency ships.

Fraud No. 3: Phantom Equipment

And the rubber boom? That was a phantom as well. BP’s Alyeska had promised that too, in writing. The equipment was supposed to be placed along the tanker route including Bligh Island—exactly the spot where the Exxon Valdez grounded.

And so, it was no surprise to me that 21 years later in the Gulf there were neither skimmers nor boom at the site of the Deepwater Horizon. The equipment was there, as in Alaska, only on paper.

Indeed, part of BP’s Gulf Coast response plan was a photocopy of the Alaska plan, including ways to wash down Arctic seals.

Cover-Up, Threats and Bribery

Did BP’s top executives and partners know of the ghost response teams and phantom equipment ruse? Yes, we have the documents and insiders’ testimony. Just three examples from my bulging file cabinet:

In a confidential letter dated April 19, 1984, Capt. James Woodle, BP’s commander of the port at Valdez, warned that “due to a reduction in manning, age of equipment, limited training and lack of personnel, serious doubt exists that [we] would be able to contain and clean up effectively a medium or large size oil spill.”

In response, BP threatened him with a file on his marital infidelities (fabricated), fired him, then forced him to destroy his files.

Ten months before the Exxon Valdez spill, BP’s Alyeska chief, Theo Polasek, told a secret meeting of the top executives of the Alaska group oil companies (including BP, Exxon and ConocoPhillips) that containing an oil spill “at the mid-point of Prince William Sound [is] not possible with present equipment.” But no change was made. Polasek was denied the funds needed to protect the mid-Sound—exactly where the tanker grounded.

In September 1984, before the Exxon Valdez disaster, BP’s shipping broker, Charles Hamel, was so concerned at what he saw as an immediate danger in Alaska that he flew by Concorde to London to warn BP’s chiefs of the looming emergency. In response, BP hired ex-CIA operatives to tap Hamel’s phone and intercept his mail. BP’s black ops team even ran a toy truck with a microphone into the air vents of a building where he was speaking with a congressman. (Ultimately, BP’s spooks were captured by a team of Navy SEALs.)

BP Gets Off Cheap

The team of attorneys representing the Natives and fishermen whose lives were destroyed by the tanker spill chose to hold back the true and ugly story of systematic fraud and penny-pinching negligence by BP and its partners. We focused instead on the simpler story of human frailty and error—“drunken skipper hits reef.”

We didn’t have a choice: Oil company chiefs had told our clients—Natives who were out of cash, isolated and desperate—that they wouldn’t get a dime unless we agreed not to use the “f-word”: fraud. Exxon would withhold payment for 20 years.

We buried the fraud charges—yet Exxon still didn’t pay for 22 years. By that time, a third of the Natives and fishermen in the lawsuit were dead.

And BP? Who said crime doesn’t pay? BP walked away with a nominal payment to Alaska’s Natives, fishermen and towns of $125 million—100 percent of it covered by insurance.

And that’s what led, years later, to the incineration of 11 men on the Deepwater Horizon and 600 miles of Gulf coastline still poisoned today.

BP and other oil companies have a clear motive for these safety games: skimmer barges, crews, equipment and operations cost billions of dollars a year worldwide to man and maintain. It’s cheaper to lie, cover up and buy the favor of politicians and regulators.

In London, BP executives told me on camera of their systematic bribery of presidents and their minions in the new Caspian Sea oil states. (Bribery charges against one bagman were dropped when in 2010 the National Security Agency acknowledged that it had authorized the bribes.)

But it’s not just “over there” that BP spreads its largesse. BP’s original sweetheart oil leases in the Gulf and the light hand of regulators were doubtless the result of favors—monetary and sexual—that the company lavished on U.S. regulatory agents at the Minerals Management Service, an agency that President Obama shuttered in response to the Deepwater Horizon blowout.

There’s also the monetary and political love laid upon America’s powerful. Although a foreign company, BP’s chief in Alaska, Bob Malone, became a co-chairman and fundraiser for George W. Bush’s election campaign.

Polluted Shores, Polluted Politics

In 2010 for the U.K.’s Channel 4 Television, I returned to Alaska with filmmaker Richard Rowley. In the quiet rivulets of the islands within Prince William Sound, we picked up gobs of oil with the telltale chemical markers of the Exxon Valdez. Then we flew to the Gulf Coast with Alaskan oil spill biologist Rick Steiner—and found miles and miles of BP’s oil oozing under beaches the company and the Obama administration had already declared clean.

Yet just last week, BP was awarded more tracts to drill in the Gulf even as its onetime vice president for Gulf exploration, David Rainey, stands trial on felony charges of obstruction of Congress.

It is clear that neither BP, its partners nor this administration can be trusted to safely punch more miles-deep holes in the Gulf of Mexico. As long as oil companies can pad their bottom line by scoffing at the law, as long as they can cheaply pollute the political process, the next disaster is not a matter of if, but when.

Palast’s investigation of BP opens his latest film, “Vultures and Vote Rustlers.” Prerelease editions are available on DVD and download for a donation to Palast’s foundation for investigative reporting.

And read the complete untold story of the Exxon Valdez and Deepwater Horizon disasters in Palast’s “Vultures’ Picnic,” BBC Newsnight’s Culture Program’s Book of the Year.

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