Daily Archives: April 20, 2012

Greg Palast on the BP Coverup

PART 2: BP Covered Up Blow-out Prior to Deepwater Horizon

Greg Palast

Evidence now implicates top BP executives as well as its partners Chevron and Exxon and the Bush Administration in the deadly cover-upwhich included falsifying a report to the Securities Exchange Commission. 

Yesterday, Ecowatch.org revealed that, in September 2008, nearly two years before the Deepwater Horizon explosion in the Gulf of Mexico, another BP rig had blown out in the Caspian Sea—which BP concealed from U.S. regulators and Congress.

Had BP, Chevron, Exxon or the Bush State Department revealed the facts of the earlier blow-out, it is likely that the Deepwater Horizon disaster would have been prevented.

Days after the Deepwater Horizon blow-out, a message came in to our offices in New York from an industry insider floating on a ship in the Caspian Sea. He stated there had been a blow-out, just like the one in the Gulf, and BP had covered it up.

To confirm this shocking accusation, I flew with my team to the Islamic republic of Azerbaijan. Outside the capital, Baku, near the giant BP terminal, we found workers, though too frightened to give their names, who did confirm that they were evacuated from the BP offshore platform as it filled with explosive methane gas.

Before we could get them on camera, my crew and I were arrested and the witnesses disappeared.

Expelled from Azerbaijan, we still obtained the ultimate corroboration: a secret cable from the U.S. Embassy to the State Department in Washington laying out the whole story of the 2008 Caspian blow-out.

The source of the cable, classified “SECRET,” was a disaffected U.S. soldier, Private Bradley Manning who, through WikiLeaks.org, provided hot smoking guns to The Guardian.

The information found in the U.S. embassy cables is a block-buster.

The cables confirmed what BP will not admit to this day: there was a serious blow-out and its cause was the same as in the Gulf disaster two years later—the cement (“mud”) used to cap the well had failed.

Bill Schrader, President of BP-Azerbaijan, revealed the truth to our embassy about the Caspian disaster:

“Schrader said that the September 17shutdown of the Central Azeri (CA) platform…was the largest such emergency evacuation in BP’s history.  Given the explosive potential, BP was quite fortunate to have been able to evacuate everyone safely and to prevent any gas ignition. … Due to the blowout of a gas-injection well there was ‘a lot of mud’ on the platform.”

From other sources, we discovered the cement which failed had been mixed with nitrogen as a way to speed up drying, a risky process that was repeated on the Deepwater Horizon.

Robert F. Kennedy Jr., president of Waterkeeper Alliance and senior attorney for Natural Resources Defense Council, calls the concealment of this information, “criminal. We have laws that make it illegal to hide this.”

The cables also reveal that BP’s oil-company partners knew about the blow-out but they too concealed the information from Congress, regulators and the Securities Exchange Commission. BP’s major U.S. partners in the Caspian Sea drilling operation were Chevron and Exxon.

The State Department got involved in the matter because BP’s U.S. partners and the Azerbaijani government were losing more than $50 million per day due to the platform’s shutdown. The Embassy cabled Washington:

“BP’s ACG partners are similarly upset with BP’s performance in this episode, as they claim BP has sought to limit information flow about this event even to its ACG partners.”

Kennedy is concerned about the silent collusion of Chevron, Exxon and the Azerbaijani government. “The only reason the public doesn’t know about it is because the Azerbaijani government conspired with them to disappear the people who saw it happen and then to act in concert, in collusion, in cahoots with BP, with Exxon, with Chevron to conceal this event from the American public.”

Kennedy’s particular concern goes to the connivance of the State Department, then headed by Secretary of State Condoleezza Rice, in the cover-up and deception. Chevron, noted Kennedy, named an oil tanker after Rice who had served on the oil company’s board of directors. “BP felt comfortable—and Chevron and Exxon—in informing the Bush State Department, which was run by Condoleezza Rice,” he said, “and they felt comfortable that that wasn’t going to come out.”

The U.S. Securities Exchange Commission requires companies to report “material” events. BP filed a “20-F” report in 2009 stating, “a subsurface gas release occurred below the Central Azeri platform,” suggesting a naturally occurring crack in the seafloor, not a blow-out. This contradicted the statements of three eyewitnesses and the secret statement of BP’s Azerbaijan President in then WikiLeaks cable.

“The three big actors, Chevron, Exxon and BP all concealed this from the American public,” concludes Kennedy. “This is a criminal activity.”

And why would the Azerbaijan government cover up a disaster costing it $40 million to $50 million a day? According to another insider, Les Abrahams, it has to do with at least $75 million in bribes that he paid to Azeri officials in Baku.

Abrahams was a BP executive in Baku in the 1990s working simultaneously, at BP’s insistence, with MI6, British intelligence. We met with Abrahams in London who told us he was joined in his payoff runs by BP’s CEO and Chairman Lord Browne who insisted on handing over a “sweetener” himself.

BP refused to be interviewed for this investigation, but did answer our questions in writing. The company will neither confirm nor deny the 2008 Caspian Sea blow-out. As to the failure to tell Congress and US regulators and the SEC about the blow-out, BP states only that it informed the government and regulators of Azerbaijan.  However, the company does implicate its partners (Chevron and Exxon). BP states it, “shared the facts of its investigation with the Azerbaijan government, regulators, partners and within BP.”

In response to further questions, BP does not deny the payment of bribes to Azerbaijan officials by company executives.  It should be noted that at the time, that, unlike under U.S. law, Britain had not made bribery of foreign officials a crime.

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Re-prints permitted with credit to EcoWatch.org and the author.

Greg Palast is the author of Vultures’ Picnic (Penguin 2011), which centers on his investigation of BP, bribery and corruption in the oil industry. Palast, whose reports are seen on BBC-TV and Britain’s Channel 4, will be providing investigative reports for EcoWatch.org.

 

The Borowitz Report

Hookers Downgrade US Credit Rating

Shortchanging by Secret Service Draws Strong Rebuke

NEW YORK (The Borowitz Report) – Days after Secret Service agents shortchanged a group of prostitutes in Colombia, the international trade group representing hookers downgraded the United States’ credit rating from AAA to B.

The strong rebuke from the International Alliance of Professional Escorts came after a Secret Service agent reportedly paid one of its members $30 for an $800 service, or only 4% of the stated price.

The statement from the International Alliance of Professional Escorts said that in downgrading the United States’ credit rating it was sending a clear message that its “members should be aware that doing business with the government of the United States carries with it a significant risk.”

“We are urging our members to avoid conducting transactions with the United States and to focus on more reliable customers, like the International Monetary Fund,” the statement added.

Just hours after the announcement from the escorts’ group, the U.S. Congress passed the following resolution blasting the Secret Service for its actions: “We strongly denounce the Secret Service for consorting with prostitutes, which has traditionally been Congress’s role.”

But it was not all bad news this week for the Secret Service, which today reported a 5000% jump in enlistment.

The agency said that enlistment offices across the country have been packed with prospective agents, including House Speaker Newt Gingrich, who abruptly dropped out of the Presidential race to join.

Mario Piperni’s Illustrated Late-Night Humor

Late Night Political Humor

April 20, 2012 By

The best from Political Humor‘s collection of the week’s late night political humor.

Happy Friday.

“President Obama is gearing up for his presidential campaign. He’s creating a new series of ads. The first ad boasts “just last week my Secret Service created jobs for 11 Colombian women.” –Conan O’Brien

“The Secret Service prostitution scandal has gotten worse because apparently agents were also snorting cocaine. However, in the agents’ defense, the Colombian hotels offer cocaine in the mini bar.” –Conan O’Brien

“Conservatives are now criticizing President Obama because as a child in Indonesia he sometimes ate dog meat. But on the plus side, Obama is now polling very well among cats.” –Conan O’Brien

“President Obama, in his memoir, talked about his childhood in Indonesia living with his stepfather. He said when he was 8 years old, his stepfather introduced him to a number of unusual meats, including dog. Our president ate dog. Not only that, according to the book, he also ate snake. And his mother was looking for tiger. He was eating through Noah’s Ark.” –Jimmy Kimmel

“Between Romney and Obama, it is a frightening time to be a dog in this country. But the best time ever to be a cat.” –Jimmy Kimmel

“Mitt Romney has already begun the process of choosing a running mate. Romney wants someone with a different ethnicity who appeals to women, so his first choice is President Obama.” –Conan O’Brien

“The Democrats accuse the Republicans of launching a war on women. Then the Republicans accuse the Democrats of the same thing. At this point, who can remember who enacted reproductive health restrictions in 36 states including mandatory transvaginal ultrasounds?” –Stephen Colbert

“New Jersey Mayor Corey Booker last night personally rescued a woman from a burning building. Or as Fox News reported it, ‘black man loots house, steals white woman.’” –Bill Maher

“Newt Gingrich is up to his chins in debt.” –David Letterman

“Yesterday Newt Gingrich gave a campaign speech at a senior center, scheduled between a Jazzercise class and a Bingo game. That’s when you know you’re in trouble – when your campaign speech is the least exciting thing happening at a senior center.” –Jimmy Fallon

“Newt Gingrich gave a speech at a senior center. Or as audience members put it, ‘Unplug me.’” –Jimmy Fallon

“During a campaign event, Newt Gingrich was bitten by a penguin. It was feeding time and Newt and the penguin were fighting over pieces of squid.” –Conan O’Brien

“Today Newt Gingrich is blaming the failure of his presidential campaign on Fox News. Newt’s also blaming the failure of his diet on Cinnabon.” –Conan O’Brien

Naked Capitalism on the Fraud of Mortgage Fraud Investigation

Yet Another Obama Big Lie: Mortgage Fraud Investigation Not Even Staffed

The Administration has managed the impressive task of operating in a more cynical fashion than even its worst critics predicted.

Remember the widely ballyhooed mortgage fraud investigation, announced at the State of the Union address? This was the shiny toy that succeeded in getting New York attorney general Eric Schneiderman to abandon his opposition to the mortgage settlement. Schneiderman had been the defacto leader of the dissenters by virtue both of being the first to stand against the effort and by having the Martin Act. Suborning Schneiderman put the objecting state attorneys general in disarray and enabled the Administration to push this toxic deal over the finish line.

It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.

The Administration started undercutting Schneiderman almost immediately. He announced that the task force would have “hundreds” of investigators. Breuer said it would have only 55, a simply pathetic number (the far less costly savings & loan crisis had over 1000 FBI agents assigned to it). And they taunted him publicly by exposing that he hadn’t gotten a tougher release as he has claimed to justify his sabotage.

We had assumed that the Administration would engage in a Potemkin version of an investigation, bringing a few cases close to the election to generate deceptive and useful “tough on crime” headlines. But having succeeded in protecting the banks, it looks like they can’t even be bothered to go through the motions. This update comes from the New York Daily News (hat tip Matt Stoller):

On March 9 — 45 days after the speech and 30 days after the announcement — we met with Schneiderman in New York City and asked him for an update…As of that date, he had no office, no phones, no staff and no executive director. None of the 55 staff members promised by Holder had materialized. On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.

Tuesday, calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”…

In fact, the new Residential Mortgage-Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.

We are led to conclude that Donovan was right. The settlement and working group — taken together — were a coup: a public relations coup for the White House and the banks…

But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.

However, we disagree with the charitable conclusion made by the Daily News:

Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.

As we indicated, Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.

It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.