Diary

Disasters Result From Regulatory Capture

Disasters Result From Regulatory Capture.

Government works. Government works like Hell. It does exactly what it gets paid to do.

Government is efficient – damn near omnipotent. It seeks out rents with the visceral efficacy of the Goldman Sachs trading desks. It garners power the way Cesare Borgia did in the dysfunctional awakening that was the birth of Italian Nationalism.

We believe government in America does not work because it does not work for us. It never has. It was never intended to. It was originally designed by our constitution to work for the benefit of the commonweal instead. Quite sadly, it no longer does that either. Our government has fallen completely under regulatory capture and now works for its interest group paymasters instead.

One ghastly example that captures headlines and ink at present is the Leviathan Known now as “Beyond Petroleum”. The organization was originally known as British Petroleum until it jettisoned the Euro-Phallo-Centrism in search of better PR and lobbying leverage. This worked for the company so well that they can hopefully now change the moniker to BA – “Beyond Accountability.” That, after all, is the new gold standard in the America of 2010.

Picking on BP at present comes easily. The Deepwater Horizon debacle still leaks oil and threatens to annihilate the tourist and fishing industries all along the Gulf of Mexico. The feeding frenzy descends upon them with blind, atavistic nihilism towards all the positives that they accomplish when they aren’t creating environmental catastrophes.

That, however, doesn’t mean that the gluttony is entirely unjustified. BP operates a dilapidated stock of capital, in unsafe and careless conditions and thereby has accumulated a track-record of accidents far worse than the other “evil” oil giants such as Chevron and Exxon. Their corporate leadership has seen undisputable evidence that they have a worse safety track record than anyone else in a dangerous industry.

But BP coins profit under this arrangement. The business plan works, so the disasters continue. It’s cheaper to buy a Barack Obama than it is to behave like a responsible corporate entity. Newsweek describes what safety precautions that BP has mastered, and how they protect BP, but not the habitat which they work in.

But BP will seek to leverage every penny of the $15.9 million it spent on lobbying last year (its most ever) as it seeks to fend off allegations that the company and its contractors failed to abide by safety provisions for deepwater drilling. Most of all, it will try to contain the penalties it has to pay. If the past is any guide, BP will succeed at that.

This game is not new, and also not entirely The Chicago Way as enacted by the so-called Obama Administration. BP has long realized that you get more in DC with a kind word and a hired gun. BP enjoys all the environmental regulation they currently need to turn a monstrous profit. Newsweek describes the power BP currently exercises over the American Government.

At times BP has enlisted powerful Washington types like Leon Panetta (now CIA director), George Mitchell (now Obama’s Middle East envoy), Christine Todd Whitman (the former EPA administrator), and Tom Daschle (the former majority leader) to serve on its various boards of advisers and “independent” panels. In his rounds on Capitol Hill last week, Hayward was escorted by a former aide to Ted Kennedy who now works for the Brunswick Group, a powerhouse public-relations firm recently hired by BP to help it deal with the oil-spill crisis.

Given all that BP has invested in safety from the government, it should come as no surprise that the Deepwater Horizon disaster has preempted BP receiving an award for safety in offshore drilling. It seems the Department of The Interior has to “re-evaluate” in light of current events. The tragedy of it all! BP invested $15.9M of working capital in the US government, and now they won’t get their stinkin’ safety award.

A look at BP’s last decade would have saved our illustrious regulators the effort of accepting any BP application for a safety award without a gut-busting belly laugh. In 2005, The BP refinery in Texas City, Texas exploded. The explosion killed 15 and wounded 180. OSHA investigated, and according to The Star Telegram, found the following.

“OSHA has found that BP often ignored or severely delayed fixing known hazards in its refineries,” Secretary of Labor Hilda Solis said in a written statement earlier this year. “There is no excuse for taking chances with people’s lives. BP must fix the hazards now.” BP officials have said there’s no pattern of safety problems. “We are a responsible and professional company,” BP Alaska spokesman Steve Rinehart has told reporters. “We work to high standards. Safety is our highest priority.”

According to further research by The Star Telegram, BP ignored myriad warnings that The Texas City Refinery was a safety hazard. The US Chemical Safety and Hazardous Investigation Board condemned BP’s safety program in terms that brook no misunderstanding. Details follow below.

“The Texas City disaster was caused by organizational and safety deficiencies at all levels of the BP Corporation,” the report stated. “Warning signs … were present for several years, but company officials did not intervene effectively to prevent it.” Solis said nationally, BP facilities have been inspected by the U.S. Occupational Safety and Health Administration 44 times. There are more than 400 citations or failure to abate notices issued to the Texas City refinery alone, according to a 2009 review.

And yet, our government had no problem including BP on a list of honorees for industrial safety. It’s amazing what $16M can buy you in DC. Perhaps, under the benevolent auspices of Obamacare, we can give Dr. Richard Kevorkian a medal for upholding the Hippocratic Oath. With all those big government types doing exactly what their paid to, how can you help but feel confident about the new Cap and Trade Legislation being presented for consideration to the Senate?