Debarment for BP? Don't Be Fuel-ish!

The long-running ad campaign of British oil giant BP rebrands the company as “Beyond Petroleum.” What many are now wondering is if the company should really be called “Bullet Proof” for its ability to continue receiving lucrative federal contracts despite an abysmal performance and integrity history.

The Washington Post reported this week that, despite BP’s mounting legal troubles stemming from the Gulf of Mexico well explosion and oil spill, it remains the Pentagon’s fuel supplier of choice with contracts currently valued at more than $800 million. In fact, according to the Post, “at least one big contract” with the Department of Defense (DoD) was signed after the disastrous chain of events in the Gulf began on April 20.

BP’s contracting status was on thin ice even before the Gulf tragedy. Jeanne Pascal, a former lawyer at the Environmental Protection Agency (EPA), recently told the Corporate Crime Reporter that EPA was looking into debarring BP last year, but pressure from DoD caused the agency to back off.

“The Defense Energy Support Center told me that BP was supplying 80 percent of the fuel going to the U.S. military in Iraq,” Pascal told Corporate Crime Reporter. “That’s a very substantial need.”

So far, DoD and EPA are the only two departments looking into debarring BP. However, the Post reports that EPA has shelved its debarment deliberations until the Gulf investigations are concluded, and DoD has no intention of taking any action until EPA makes its decision.

Maybe POGO can help DoD and EPA make up their minds. According to our Federal Contractor Misconduct Database, BP has 52 instances of misconduct since 1995 (the most of any contractor in our database) for which it has paid $1.6 billion in fines, penalties, settlements and judgments. Before the Gulf tragedy, BP’s most notorious misconduct incident in recent years was the 2005 explosion and fire at its Texas City refinery which killed 15 and injured hundreds. That refinery alone accounts for nine separate instances in our database and over $477 million in penalties, including civil and criminal damages and fines for workplace safety and environmental violations. There was also “Black Thursday,” when BP racked up over $380 million in penalties in five separate instances on one day in October 2007.

BP certainly isn’t “Beyond Punishment,” but the prospect of a company-wide debarment for such a crucial military supplier? That would “Be Preposterous.”

-- Neil Gordon

Comments

[Observer V]

Crude oil and its refined products are the quintessential commodities. If you debar BP and buy from, say, the US affiliate of Shell or ExxonMobil or Marathon or any other oil wholesale source or distributor anywhere, you could well be buying petroleum products sourced from BP or refined from BP crude. Given its global reach, it is hard to avoid doing business with the company no matter where you buy.