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Despite clout, BP awaits tough questioning

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.
Aerial view of the Deepwater Horizon oil spill off the coast of Mobile, Alabama
Oil is seen on the surface of the Gulf of Mexico in an aerial view of the Deepwater Horizon oil spill off the coast of Mobile, Alabama.HO / Reuters
/ Source: The Associated Press

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, R-Ky., 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 feeble by comparison.

British-based BP, No. 4 on Fortune magazine's list of the world's largest companies, spent $16 million last year lobbying Congress and the federal government, and $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 $5 million lobbying last year and $880,000 in the first quarter this year.

BP employees donated at least $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 $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: $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 $750 million from nearly 4 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 GOP presidential rival, Sen. John McCain of Arizona, received $37,000. And $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 rare, a point she made at a committee hearing last November when Sen. Robert Menendez, D-N.J., 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 percent Democrat and 70 percent Republican a decade ago to a split of about 40 percent Democrat/60 percent 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.

One Gulf senator and offshore drilling supporter, Sen. Jeff Sessions, R-Ala., has met at least twice with BP officials since the spill, once in his office in Washington and once in Mobile, Ala. Despite BP's problems, Sessions believes they are still listened to in Washington.

"For the most part, we have similar interests at this point. The American people, the national interest, and BP's interest in shutting off this well," Sessions said. "We don't have any differences on that part of the question."

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 cooperation" on the spill response. Brunswick has teams in Washington, on the Gulf Coast and in London, where Brunswick and BP have corporate offices.

Brunswick's Washington office employs political and congressional veterans including Hilary Rosen, a former Democratic congressional aide and former head of the Recording Industry Association of America; Anthony Coley and David Sutphen, former aides to the late Sen. Edward Kennedy, D-Mass.; and Michele Davis, a former Treasury Department official under President George W. Bush and GOP congressional aide.

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 fundraiser 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 honor 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. 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.

Other BP lobbyists from lobbying firms include Jim Turner, a former House Democrat from Texas now with the Arnold & Porter firm; Ken Duberstein, a former White House chief of staff under President Reagan whose lobbying firm employs several former top Democratic and Republican congressional aides; Michelle Laxalt, a Republican with ties to GOP lawmakers; and Michael Berman, president of the Duberstein firm and a former Democratic Senate aide and party adviser.

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, D-Mass., disclosed family stock holdings of up to $15,000 in BP and $65,000 to $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," Smith said. Kerry plans to unveil an energy and climate change bill on Wednesday.
  • A spokesman for Rep. Fred Upton, R-Mich., who has reported $16,000 to $65,000 in BP holdings, also brushed off questions about recusal.
  • "Fred has forcefully taken on BP in the past for polluting the Great Lakes region and is already is on record with strong comments that that it will be BP and not taxpayers who will be on the hook for the cost of the cleanup," spokesman Sean Bonyun said.
  • Spokespeople for two other members of investigating committees who reported holdings had no immediate comment. The most recent financial disclosures, filed last year, showed Sen. Sam Brownback, R-Kan., with $15,000 to $50,000 in BP stock and Sen. Ted Kaufman, D-Del., with $23,385 in BP stock and $13,202 in Transocean assets, according to a Center for Responsive Politics review.
  • 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, R-Wyo.
  • 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 $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
  • BP gave at least $50,000 to the Democratic Governors Association in 2009-10, figures compiled by the CQ Money Line campaign-finance tracking service show.
  • The company gave $10,000 to $25,000 to former President Bill Clinton's foundation, his donor list shows.
  • Tea party favorite and potential 2012 presidential candidate Sarah Palin's husband Todd has been an oil production operator for BP Alaska.
  • BP says it is spending $500 million over 10 years and working with the Lawrence Berkeley National Laboratory and others to support the Energy Biosciences Institute's development of biofuels.

Eric Dezenhall, a crisis management consultant in Washington not working with BP, said BP would lose clout in Washington, but only temporarily.

"When you're in the middle of these kind of things it seems like the end of the world, but good companies with good solid resources usually do recover," Dezenhall said.

Still, said Dezenhall: "They have to accept that nothing they do in the short term will be received well."

Even before the disaster, BP's activities put it at odds with government objectives on at least one issue: The U.S. 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 U.S. trade sanctions on Iran.