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Oil Companies Secretly Got Paid Twice For Cleaning Up Toxic Fuel Leaks

Unknown Lamer posted about 2 months ago | from the you-mean-double-profiting-from-pollution dept.

The Almighty Buck 113

Hugh Pickens DOT Com writes "Mica Rosenberg reports at Reuters that major oil companies including Chevron, Exxon, ConocoPhillips, Phillips 66, and Sunoco were paid twice for dealing with leaks from underground fuel storage tanks — once from government funds and again, secretly, from insurance companies. Court documents show many of the cases and settlement agreements follow a similar pattern, accusing the oil companies of 'double-dipping' by collecting both special state funds and insurance money for the same tank cleanups. Some states say any insurance payouts should have gone to them since they covered the cost of the work. 'It appears this was a really common practice and it's very disconcerting,' says Colorado Attorney General John Suthers. 'Basically the companies were defrauding the state.' Approximately 40 states and the District of Columbia have special funds to cover the costs of removing and replacing the old tanks, excavating tainted dirt and pumping out dirty groundwater. Since 1988, there have been more than half a million leaky tanks reported across the country. Nearly 80,000 spills still are waiting to be cleaned up. The lawsuits against the oil companies allege fraud or other civil, not criminal, claims, which have a lower burden of proof and do not lead to jail time. Companies are largely cooperating to forge settlement deals and were interested in partnering with the states to clean up the legacy of petroleum leaks. For example Phillips 66 paid Utah $2 million to resolve allegations that the oil company defrauded a state fund to the tune of $25 million for cleanups associated with leaking underground tanks. Phillips sued myriad insurers over coverage for contamination arising from leaking tanks around the country and Phillips 66 wound up collecting $286 million from its insurers to resolve these disputes, but it never divulged any of this to Utah officials, the suit alleged. 'When I first saw these cases, I thought this is kind of incredible,' says New Mexico assistant attorney general Seth Cohen, who handled the lawsuit for the state. 'The oil companies have, in effect, profited off polluting.'"

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113 comments

Oh my GOD! (5, Insightful)

oscrivellodds (1124383) | about 2 months ago | (#46216357)

'The oil companies have, in effect, profited off polluting.'

Doh!

Re: Oh my GOD! (2)

binarylarry (1338699) | about 2 months ago | (#46216577)

This sounds like a job for Captain Planet!

Re: Oh my GOD! (0)

Anonymous Coward | about 2 months ago | (#46216721)

Earth!

Re:Oh my GOD! (1)

ketomax (2859503) | about 2 months ago | (#46216701)

It is analogous to the way software companies (extremely few) get paid for fixing bugs in their software.

Re:Oh my GOD! (2)

WPIDalamar (122110) | about 2 months ago | (#46216883)

No, it's analogous to a software firm that releases a virus and gets paid to clean it up.

Re:Oh my GOD! (1)

operagost (62405) | about 2 months ago | (#46217585)

No, it's not. Property owners were almost exclusively responsible for removing the tanks before they leaked.

Re:Oh my GOD! (4, Informative)

operagost (62405) | about 2 months ago | (#46217525)

Lawyers have profited off lies and hyperbole.

These aren't tanks at some Chevron or Sunoco refinery. These are tanks buried at the POS, i.e. a gas station. Most are over 40 years old, and far past their expected lifetime. They should have been removed before they became a problem, but I presume the parties in question abandoned the property or otherwise did not take responsibility. Therefore, the oil companies-- as experts in the area-- were contracted.

So the oil companies are profiting off POLLUTION, but not profiting off "polluting", which implies they are somehow responsible. Regardless, if they're double-dipping I find it unlikely they are doing so inadvertently and thus they're still engaging in unethical activity.

Re:Oh my GOD! (2)

bberens (965711) | about 2 months ago | (#46217993)

Those gas stations probably have a big Chevron or Sunoco sign out front. I understand the concept of franchising but I don't think it's entirely out of line to assume the parent company assumes some responsibility for the pollution at their franchise stores.

Re:Oh my GOD! (0)

Anonymous Coward | about 2 months ago | (#46218607)

BTW, this is one of the main reasons that privately owned stations went mostly by the wayside. The cost of the required tank replacement is exorbitant, and many chose to either sell their locations or close and abandon.

Re:Oh my GOD! (1)

whoever57 (658626) | about 2 months ago | (#46218239)

So the oil companies are profiting off POLLUTION, but not profiting off "polluting", which implies they are somehow responsible.

Please tell me how, if the oil companies are not responsible, they are able to collect from their insurance companies?

This is crony capitalism at its finest. This is taxpayers money being given to companies that should instead be compensating the taxpayer for the damage that they have done.

Re:Oh my GOD! (0)

Anonymous Coward | about 2 months ago | (#46218567)

Lawyers have profited off lies and hyperbole.

...Therefore, the oil companies-- as experts in the area-- were contracted.

So the oil companies are profiting off POLLUTION, but not profiting off "polluting", which implies they are somehow responsible.

So, by your reasoning, Mickey D's wouldn't be responsible for a slip-n-fall accident at one of their fat delivery locations, but the local franshisee would instead be on the hook for the full legal payout?

Why gouv pay for it in the first place? (3, Insightful)

JcMorin (930466) | about 2 months ago | (#46216367)

If an oil company do a mess, they are responsible to clean it. If they have insurance fine for them, why we gouv need to pay them for their messed up?

Re:Why gouv pay for it in the first place? (4, Insightful)

Richard_at_work (517087) | about 2 months ago | (#46216659)

Its not their mess, its tanks owned by third parties:

Often built for gas stations during the 1950s and '60s highway construction boom, the tanks corroded over time, spilling gas and diesel with potentially cancer-causing chemicals under properties and into aquifers.

The oil companies are paid to clean up the pollution caused by these tanks constructed for, operated and owned by third parties. The oil companies are chosen because they already have extensive inhouse expertise on the subject, so they are ideal for doing it wholesale.

Chances are, most of these tanks have been abandoned and their original owners do not exist, which is why local government step in.

Re:Why gouv pay for it in the first place? (1)

djmurdoch (306849) | about 2 months ago | (#46216705)

Its not their mess, its tanks owned by third parties:

So why would they receive insurance settlements?

Re:Why gouv pay for it in the first place? (4, Informative)

Richard_at_work (517087) | about 2 months ago | (#46216789)

Putting aside the issue of double dipping for a second, the liability for the cost of the clean-up still resides with the original insurer or chain of insurers who covered the facility (including the tank) in the first place.

The oil companies were given the authority to carry out the clean up, which also grants them the authority to submit the costs to the insurance company - this isn't a simple case of the oil company doing something and then demanding money from a third party for it, there is a chain of liability, a chain of authority and both meet at the insurance companies door.

Its very very similar to your car dumping oil all over the road, and the local authority towing your vehicle and paying for the environmental cleanup - you will definitely get a bill at the end of the day, and where I live that bill comes from the company the responsibility to do said actions is delegated to, not the local authority.

In reality, it should have been the government chasing the insurance companies to force them to do the cleanup in the first place, but they didn't.

And, as I said, the issue of double dipping is entirely not represented in this explanation - that's another issue entirely.

Re:Why gouv pay for it in the first place? (1)

Jim Sadler (3430529) | about 2 months ago | (#46218817)

It sort of blends in with the privacy problem. I once drilled into an abandoned gas well with an auger truck by accident. The tank had a lot or rotten gasoline left inside. The gas station had been knocked down a couple of decades past. Without a database of the last owner of the station and the insurance company that covered the property as well as the company paid to demolish the station and its insurance companies the burden fell upon the taxpayers to clean up the old well site. In other words a long term, persistent database of all aspects of that property going back 40 or 50 years would have been valuable. I was drilling a large hole to install a new traffic pole as the road had been widened. Part of that gas well was actually under a new road. The other issue is that when these oil companies take money time after time for clean ups and defraud the taxpayers why are they not smacked with a RICCO Act charge and the companies not seized by the state? Ongoing, organized crime is the very reason the RICCO act was created.

Re:Why gouv pay for it in the first place? (0)

Anonymous Coward | about 2 months ago | (#46217081)

They keep buying insurance policies.
The insurance companies keep selling the insurance policies.
They profit.

Without the insurance policies, no one would make a profit off of their cleanup jobs. There has to be a profit to get the cleanup work accomplished. (This is a basic principle of economics.)

Re:Why gouv pay for it in the first place? (1)

dreamchaser (49529) | about 2 months ago | (#46216711)

That does not explain the double dipping of being paid by the government then also collecting on insurance.

Re:Why gouv pay for it in the first place? (2)

Bartles (1198017) | about 2 months ago | (#46217687)

When a person in Louisiana has their house destroyed by a hurricane, are they double dipping when they receive an insurance settlement and also accept government assistance? No?

Re:Why gouv pay for it in the first place? (2)

stox (131684) | about 2 months ago | (#46218107)

The majority of those stations were built and owned by the oil companies. They later moved to a different model and sold the stations to third parties. Once the issue of laking tanks was discovered, it turns out that many/most of those stations had negative value ( ie. the cost to clean-up was greater than the value of the gas station ). How convenient the oil companies had just completed divesting themselves of these stations when the problems were discovered.

The oil companies screw the American Public yet again.

Government paying for cleanup (1)

Firethorn (177587) | about 2 months ago | (#46216677)

This can be complicated. Off the top of my head, the EPA has vast powers to force cleanup, and funding in the form of the superfund. Of course, the superfund was mostly intended as a 'last ditch' cleanup program for when the business was or going to be out of business before finishing cleanup, sometimes for chemicals that were previously considered safe.

Somewhat paranoid, but I wonder if some of the tanks weren't actually that of the company that ended up doing the cleanup, or whether they were truly double-dipping or if hte government was essentially paying the deductible(IE cleanup costs $2M, insurance paid ~$1M, government another $1M).

Going by the settlements, I figure some fraud happened, just not as much as initially thought.

Re:Why gouv pay for it in the first place? (0)

Anonymous Coward | about 2 months ago | (#46217045)

You must be new to the USA. The USA Federal Government loves new laws (and their old ones). The laws are not written by the Congressmen and Senators, as they taught us in civics and government classes. It the Congressmen and Senators wrote the laws, the laws would be a lot simpler--after all, a Congressman and Senator only have the attention span of two years. The laws are written by staffers, bureaucrats and lobbyists. That's why the official author of a bill doesn't know what is in it. Bills, being written by by staffers, bureaucrats and lobbyists, have a lot of unintended consequences. Of course someone in the group intends the consequence but just keeps their mouth shut about it.

A long, long time, a Congressman publishes a list of Congressional, legislative boondoggle. It was great reading on how taxpayer money was "wasted" or, shelled out to favorites. Of course, some of the money trickled down to the working people--bridges to nowhere have to built by somebodies. A Republican Senator has started doing the same a few years ago but his is retiring soon. We really need more Congressmen like "Dr. No". This Congressman would vote "No" on any bill that was not a constitutional duty for the Federal Government. (He voted against more bills than he voted for.) The people in his district keep voting for him and he stayed in office for decades.

Congress is full of BSers and BSers only know how to BS. Just look at the BS on IT subjects that /.ers hold dear.

Re:Why gouv pay for it in the first place? (0)

Anonymous Coward | about 2 months ago | (#46217165)

Is this english?

Re:Why gouv pay for it in the first place? (0)

Anonymous Coward | about 2 months ago | (#46217849)

Have you never heard of kickbacks?

I thought (1)

phmadore (1391487) | about 2 months ago | (#46216377)

'The oil companies have, in effect, profited off polluting.'

I thought we had reached an agreement as a species that this is what they were doing in the first place? Did anyone else read the last book Kurt Vonnegut wrote [wikipedia.org]?

Re:I thought (-1)

Anonymous Coward | about 2 months ago | (#46216467)

You profit from polluting also, but this isn't a disgussion about that, but the fact that the oil companies profited from polluting in a way that is not accepted and the only possibility atm.

You can come back with that bullshit when oil is banned and electric and magic vehicles are used by everyone and laadidaa shit happens without any negative effects, until then shut the fuck up.

Re:I thought (1)

scarboni888 (1122993) | about 2 months ago | (#46216559)

Or when the easily accessible oil runs out and there aren't any magic vehicles used by anybody.

Re:I thought (0)

Anonymous Coward | about 2 months ago | (#46216635)

Except at that point the oil companies aren't profiting from oil use.

ask us semi-innocent end users (0)

Anonymous Coward | about 2 months ago | (#46216399)

our fake history & heritage is no longer a secret anywhere even here http://www.youtube.com/results?search_query=fossil%20nuclear%20fuel%20problems&sm=3

no conscience no spirit just #'s & death http://www.youtube.com/results?search_query=unrepentant&sm=3

Crime pays, this is merely proof. (2, Insightful)

canadiannomad (1745008) | about 2 months ago | (#46216401)

For example Phillips 66 paid Utah $2 million to resolve allegations that the oil company defrauded a state fund to the tune of $25 million for cleanups associated with leaking underground tanks.

This is why corporate crime pays in the current world :S

Re:Crime pays, this is merely proof. (0)

amiga3D (567632) | about 2 months ago | (#46216547)

I noticed that too. Steal $25 million dollars and only pay $2 million of it back. WTF! You know, fuck the money. Put the bastards in jail. Not a country club prison but an honest to god Federal Pen with a 300lb faggot named Bubba for a room buddy. How in hell can you ever expect this to stop if there are zero consequences?

Re:Crime pays, this is merely proof. (4, Insightful)

bluefoxlucid (723572) | about 2 months ago | (#46216631)

Yeah I'm thinking this is backwards. You defrauded the state $25M? Well you owe the state $25M, plus interest, plus overhead, plus punitive damages for being a dickhead. A settlement would be $25M--break even--at the very least; you want it to be a little bit more so that a high incidence of getting caught can lead to a poor ROI (i.e. if you have a 1 in 50 chance of netting $25M and otherwise it costs you $2M, you're $73M short in the long run per 50 suits). This settlement is bullshit.

Re:Crime pays, this is merely proof. (1)

Bite The Pillow (3087109) | about 2 months ago | (#46218597)

Did you read the details of the settlement? I didn't. But if they had good evidence to win, they probably would not have settled. A bought politician would not have brought the case at all.

So, without further details, I can only assume they settled for what they could get, instead of losing completely. Your math does not account for the probability of not having the evidence needed to win. No win, no repayment, no damages.

Depends... (2, Informative)

Anonymous Coward | about 2 months ago | (#46216421)

Some states require all insurance policies stack to cover an event, rather than there being "primary" and "secondary" insurance. Many times governments will take out insurance policies of their own to cover things like this, naming the oil company as the beneficiary. The oil company may also have its own insurance. Depending on the laws having jurisdiction over the event, one or both insurance companies must pay the full amount of the claim.

If I buy two life insurance policies for myself, and I die, they both have to pay.

Similarly, a policy of any kind underwritten in the US MUST pay even in the face of multiple other policies underwritten overseas.

Re:Depends... (1)

ebno-10db (1459097) | about 2 months ago | (#46216565)

If I buy two life insurance policies for myself, and I die, they both have to pay.

But if you take out two insurance policies on your car, each covering the full value, and you try to collect both after your car gets "stolen", it's called fraud. That's been a principle of insurance for centuries.

Re:Depends... (0)

Anonymous Coward | about 2 months ago | (#46216601)

Yet it makes no sense if you have paid for both insurance policies.

Re:Depends... (1)

iserlohn (49556) | about 2 months ago | (#46216647)

It depends on whether the insurance is a fixed payment, or a payment for damages. If you get a lump-sum payout on an event triggering the payout, it is usually stackable. If it is for damages to property or for cost to remedy a problem, then the policy usually is not stackable.

Re:Depends... (1)

ebno-10db (1459097) | about 2 months ago | (#46216689)

If it is for damages to property or for cost to remedy a problem, then the policy usually is not stackable.

Which is the case we're talking about here.

Re:Depends... (1)

khallow (566160) | about 2 months ago | (#46216653)

Sure, it does. The principle from the insurer's point of view is "moral hazard". The more you sell insurance against something happening, the more likely it is to happen because you're giving the insuree more incentive to do the action in question that's being insured against. As a result, a typical policy requires you to disclose any other insurance that may apply.

But it looks to me like the state funds in question didn't even consider this possibility (perhaps through some combination of lobbying and stupidity). It wouldn't have been that hard to require gasoline retailers to disclose insurance payouts.

That's part of the reason, I think, that the settlements are just a small portion of the money the businesses received in the first place. Those oil companies were caught doing a legal, but unseedy activity.

Re:Depends... (1)

Attila Dimedici (1036002) | about 2 months ago | (#46216931)

I am not sure that you are correct, but if you are it is because of the way in which insurance companies write the auto insurance policies. It is likely that auto insurance policies are written that way because of the laws governing insurance policies. In the case being covered in the article (oil companies insurance against pollution) it is also a case of the laws being written that way. In addition, this is not a case of the oil companies taking out two insurance policies. It appears that the government took out one insurance policy with the oil company as the beneficiary (and with obligations on the oil company to spend that amount of money cleaning up the pollution) and the oil company taking out another insurance policy with themselves as the beneficiary (probably as required by law). The logic behind the way the laws were written was sound, but no one considered how the laws interacted with each other.
This story is not about how evil the oil companies are, rather it is an example about how laws can easily result in having consequences which actually encourage behaviors which those passing them would rather discourage.

Oil Executive Responses On This Should Be Quality (1)

phmadore (1391487) | about 2 months ago | (#46216427)

This [gstatic.com] and this guy [telegraph.co.uk]. Mod up if you remember being pissed at how smug they were about it, the British bastards...

Re:Oil Executive Responses On This Should Be Quali (1)

ebno-10db (1459097) | about 2 months ago | (#46216713)

Mod up if you remember being pissed at how smug they were about it, the British bastards...

As opposed to the American oil companies, which are always contrite and quick to admit fault?

Re:Oil Executive Responses On This Should Be Quali (1)

phmadore (1391487) | about 2 months ago | (#46218785)

Definitely did not say that. I appreciate the words in my mouth, though.

Government funds for clean ups? (2)

HnT (306652) | about 2 months ago | (#46216449)

Why do gigantic oil companies like that get government money to clean up the mess these companies themselves carelessly created in the first place? It is their fault these spills happened, they should be held fully responsible for what they did.

Re:Government funds for clean ups? (4, Interesting)

ErroneousBee (611028) | about 2 months ago | (#46216627)

Because there is no reward for good behaviour.

In BP's case, they made a decision to fund the cleanup and compensate people and businesses. And every fraud and shyster crawled out of the woodwork and started demanding compensation. They get no credit for putting their hands up, while US companies Transocean and Haliburton were busy hiding behind lawyers and shredding the evidence and getting away with it.

Re:Government funds for clean ups? (0)

Anonymous Coward | about 2 months ago | (#46216755)

there is no reward for good behaviour.

Sure there is. Your mistake is that you accept spewing oil all over the place to be "good behaviour".

Re:Government funds for clean ups? (1)

Richard_at_work (517087) | about 2 months ago | (#46216863)

They have been trying to have claims reviewed properly through the courts recently, and at every step they have been told to bugger off and stop complaining by US courts - they have been trying to stop claims like a certain hotel chains claim for loss of income from three hotels which had closed down 6 months prior to the spill 250 miles away from the coast.

The claims being approved by the US claims fund administrators have next to no scrutiny, so some really ridiculous stuff is being approved for payouts.

Re:Government funds for clean ups? (1)

Jim Sadler (3430529) | about 2 months ago | (#46218933)

The catch is that millions of people who live near the coastal waters were damaged and continue to be damaged by the BP spill. Do you really feel comfortable eating seafood from the Gulf of Mexico? Do you think that tourist dollars are not still being lost as some people fear the food and water on the gulf coast or simply can't enjoy the beaches knowing that toxic chemicals are still in play? Remember the Exon Valdez? The fishery near that spill is still highly damaged and has not returned to anywhere near a normal condition. Either one of those incidents is enough to forbid oil from being extracted or shipped over any body of water. Said flat out oil and coal need to be shut down completely as fuel sources. If we manage to control birth rates we can lower the population to a point that all of these wretched industries are no longer tolerated. Population causes pollution. Our lands were not designed to handle the insanely high numbers of people now living upon them.

Re:Government funds for clean ups? (1)

rogoshen1 (2922505) | about 2 months ago | (#46220667)

And this ladies and gentlemen, is why moderates tend to view environmentalists as nutjobs.

Energy consumption will forever and always be on the uptick. Global Population will stabilize, but predicting WHEN this will occur is less than precise.

The irony of your post is that you're advocating lowering birthrates, which is fine. From past experiences we know that the best way to do that is .. increase the standard of living. But your screed amounts to "stop using energy!" which will absolutely LOWER the standard of living of the very people with those high birthrates...

Pragmatically we need to figure out ways to provide energy that's cost effective, and as clean as possible. Any sort of draconian restriction on economic activity, nor population controls(!!) are feasible.

Re:Government funds for clean ups? (1)

mysidia (191772) | about 2 months ago | (#46216767)

Why do gigantic oil companies like that get government moneyto clean up the mess these companies themselves carelessly created in the first place?

The oil companies are no more responsible for causing the mess, than the airplane manufacturer Boeing was responsible for 9/11, no more responsible than Smith and Wesson is responsible if someone goes on a shooting spree, or Jack Daniels is responsible if someone drives drunk on their product and runs down some innocent pedestrians.

The oil companies are not responsible for these tanks. They did not build them, they were not in charge of their maintenance, and they don't own the tanks or the land.

The tanks largely belonged to private gas station operations, and many of those belonged to companies that are no longer in business.

The big oil companies were recruited to clean up messes that somebody else left behind -- that were the result of negligence by the owners of the tanks.

Really? (0)

Anonymous Coward | about 2 months ago | (#46216453)

Wait are you saying that in the US you let oil companies poison your water supply and then pay them to clear it up?

Welfare Queens (2)

Ice Tiger (10883) | about 2 months ago | (#46216471)

Meet another example of the new US Welfare Queens.

Re:Welfare Queens (1)

Maxwell (13985) | about 2 months ago | (#46216849)

They are Capitalist welfare queens, they made their donations, so that is OK. It is the *individual* welfare queens that will destroy America!

In the US, cleanup costs are never factored in. (5, Interesting)

Kazoo the Clown (644526) | about 2 months ago | (#46216493)

Why do you think gas is so cheap? In the good old US of A, industrial cleanup is simply not factored into the cost of doing business. Whether fossil fuel, nuclear, plastics or any chemistry based business, cleanup is "someone else's problem.". Even hard drive manufacture-- though that's no longer done in the US largely because of the dreaded "regulations" which at least for that, have caught up with them. I bought a bunch of file cabinets once from a liquidation sale of a hard drive company, that still had the files in it from the building maintenance guy-- it was an endless array of citations for dumping the nickel water from the plating operations-- you could see the entire history of what happened. They then started trucking it in tanker trucks offsite (all the bills for that were there), then they got cited for what they did with that, finally it got so expensive tomdeal with they went out of business. This was in the 1980s/1990s. Now they'd probably get some Republican asshole to whine about overregulation and get the regs removed while the neighbors start suffering the effects of nickel in their drinking water.

Re:In the US, cleanup costs are never factored in. (5, Insightful)

amiga3D (567632) | about 2 months ago | (#46216567)

There you go getting all political. This is a bipartisan issue, the oil companies don't give a shit which party they bribe. Regulation isn't the answer. Enforcement is the answer. These assholes broke all kinds of laws but look, they aren't going to be punished for it! Making laws and regulations will do nothing if you can't even enforce the ones you have in place.

Re:In the US, cleanup costs are never factored in. (1)

Jim Sadler (3430529) | about 2 months ago | (#46219382)

It is partisan to its core. Half of the republican party is a clone of the Chamber of Commerce. These are the very people who we need to be kept away from government completely. Oh and just how do politics play a part? One way is to claim that you are out to save the taxpayer and force cuts upon programs such as law enforcement thus insuring that money to go after white collar criminals does not exist. So the lower my taxes crowd on the right wing also fully supports corporate crime.

Re:In the US, cleanup costs are never factored in. (0)

Anonymous Coward | about 2 months ago | (#46216595)

These are perfect examples of how government needlessly interferes in the economy. Wrecking it. They need to lay off the fucking regulations already and get a life is what I say!

Don't go after the companies (4, Insightful)

MikeRT (947531) | about 2 months ago | (#46216497)

Go after the executives. The executives who do this care more about themselves than the company. The only solution is to focus entirely on the leaders who do this and put them in prison. If Deepwater Horizon had resulted in the Obama Administration filing Felony Murder charges against the executives who directed the safety standards to be ignored (and resulted in 11 oilmen dying), any bets that safety standards wouldn't suddenly become top priority? Same deal here.

Re:Don't go after the companies (4, Insightful)

JaredOfEuropa (526365) | about 2 months ago | (#46216571)

This. Being an executive means (or should mean) being personally responsible for your actions, and that includes criminal charges for pulling stunts like this. Without the option of course to buy your own arse out of a lawsuit using corporate (shareholders) funds

Re:Don't go after the companies (1)

Maxwell (13985) | about 2 months ago | (#46216871)

All that would do is create incentives for even more cover ups. As long as it isn't discovered while you are there, you'll probably be fine.

All the execs in this case have long since retired - fabulously wealthy of course.

Re:Don't go after the companies (1)

JaredOfEuropa (526365) | about 2 months ago | (#46217051)

The ability to press criminal charges doesn't go away after the offending exec has left the company.

Also, I don't think the right way to prevent cover-ups is to give those responsible a free pass. That's like letting murderers walk free in exchange for a confession (there might be a reduced sentence in it for them, but no acquittal). Besides, it's not like the current soft approach has encouraged a lot of companies to come clean; those coverups will happen regardless of penal consequences (since there are financial and career related consequences as well).

Corporate sociopaths (2)

MikeRT (947531) | about 2 months ago | (#46217521)

The main reason why corporate regulation doesn't work is that liberals haven't accepted the fact that if it's true that sociopaths thrive at the upper echelons today, the only cure is strict criminal law enforcement done against the perp not the company. Sociopaths, lacking empathy, don't give two shits about their company unless it affects them. Again, taking Deepwater Horizon as an example, the way to get a corporate sociopath to take it seriously isn't to threaten his company with a $20B fine but with a firing squad if his deliberate machinations result in employees getting killed.

Re:Don't go after the companies (0)

Anonymous Coward | about 2 months ago | (#46216573)

How? Simply reading the summary tells you the laws are set up to only be civil in nature and no criminal jail time will come from it. Besides that, your government officials are happy to settle for receiving only 10% of the fraudulent money back. Capitalism at it's finest, good luck with that.

Re:Don't go after the companies (1)

ebno-10db (1459097) | about 2 months ago | (#46216579)

Go after the executives.

Right after they prosecute the bankers for control fraud in the global financial crisis. Case law and all has been established. See William K. Black for a detailed explanation.

Re:Don't go after the companies (3, Insightful)

amiga3D (567632) | about 2 months ago | (#46216587)

Exactly! Everyone is screaming for more regulation when the regulations in place now are totally ignored. Breaking the rules has to have consequences. If you just ignore all these infractions then why have regulations at all? Seriously, they're talking about making them pay back 10 cents on the dollar for what amounts to theft. The same legislative cocksuckers that rant about "stealing" movies. Download movies and go to jail, defraud millions and laugh all the way to the bank.

Re:Don't go after the companies (0)

Anonymous Coward | about 2 months ago | (#46216735)

Look, the rules for fraud are these:

1. Commit a fraud for 5 million or more (usually under this is not enough). Be sure to not fraud from someone more powerful than you and your buddies or you'll have to be clever.
2. Hide the money: corporations can hide it within their normal transactions, individuals need to hide it better.
3. Claim bankruptcy, if you are individual. Carry on normally, if you are a corporation.
4. You'll be ordered to return max 20% of the money.
5. Profit!

Re:Don't go after the companies (3, Insightful)

laird (2705) | about 2 months ago | (#46216619)

Good point. Look at how when SOX made the officers of a company personally liable for incorrect financial statements that suddenly companies put financial controls in place. Personal liability is clearly a much better motivator than ethics or responsibility to shareholders.

Re:Don't go after the companies (1)

mysidia (191772) | about 2 months ago | (#46216805)

Good point. Look at how when SOX made the officers of a company personally liable for incorrect financial statements that suddenly companies put financial controls in place.

Maybe.... but SOX was really just an irrational reaction to Enron (whose executives were prosecuted anyways), and the additional financial "controls" are mostly just lip service, with no real improvement. The SOX are ultimately stifling free enterprise and opportunities for Americans, and are a great example of poor, overreaching regulation.

Nowadays, most companies have started buying additional legal liability insurance to protect their corporate officers, anyways, at great additional expense for shareholders, and rules such as SOX have kept or caused many companies to become or remain private, instead of going public in the first place, so ultimately: the shareholders of public companies, and American investors as a whole are losing profits or potential gains for their retirement because of expensive knee-jerk laws such as SOX.

Re:Don't go after the companies (1)

twocows (1216842) | about 2 months ago | (#46216731)

Then they'll just start putting scapegoats in charge of the company while the board becomes a secret group within the company. Anything goes wrong, just replace the scapegoat.

Re:Don't go after the companies (0)

Anonymous Coward | about 2 months ago | (#46216737)

Deep water horizon:

Several top level executives lost their jobs, several lower level execs are still amidst their criminal negligence cases. The CEO has been shafted of to syberia. The result? BP has created an independent internal reporting line direct to the CEO to manage safety and installed some one in this reporting line next to every plant manager across the world. They have gone mental with standardization of risk mitigation projects, I have honestly never seen so much money spent on projects with zero capital value. They are shutting down HF alkylation plants, they redesigned the safety systems of all their platforms and their refineries. That's on top of the upwards of $20bn spent on cleanup operations which are still ongoing.

Anyone who thinks safety isn't a top priority right note is either ignorant of what's going on our deluded.

Disclosure: I work at a BP plant and none of the millions I have spent since working in projects these past few years have been for anything other than safety and risk mitigation.

Re:Don't go after the companies (0)

Anonymous Coward | about 2 months ago | (#46216925)

Makes me think your company was so far behind that its now paying heavily to catch up to what's needed. Please don't tell me its leading the industry on safety now.

I don't think there is a statute of limitations on murder. 11 dead. government can show up at any time.

Pretty sure (1)

lagomorpha2 (1376475) | about 2 months ago | (#46216599)

"fraud or other civil, not criminal, claims, which have a lower burden of proof and do not lead to jail time."
"For example Phillips 66 paid Utah $2 million to resolve allegations that the oil company defrauded a state fund to the tune of $25 million"

Pretty sure if I defrauded the state out of $25 million from it would be a criminal, not civil claim and would lead to jail time and a fine of more than 8% of the original fraud amount.

How is $2m a settlement a punishment? (3, Interesting)

laird (2705) | about 2 months ago | (#46216615)

If they defrauded the government of $25m, how is $2m a punishment that discourages fraud, since it leaves them $23m ahead? Shouldn't the penalty be, say, 3x the amount of the fraud, so that the cost of defrauding the government is far more than the benefit of committing fraud, enough more that the risk of getting caught and paying the penalty is far more than the benefit, and companies don't commit fraud because it's a bad risk?

Re:How is $2m a settlement a punishment? (1)

Jim Sadler (3430529) | about 2 months ago | (#46219404)

I also would love to defraud the government of 25 million and return 2 million as a punishment. Is there a list or forms that I can fill out to do that?

Lamar Smith and the EPA (4, Informative)

andydread (758754) | about 2 months ago | (#46216625)

And now folks you see why Lamar Smith wants to hobble the EPA. [opensecrets.org]

Meanwhile in North Carolina you have 30 year Duke Energy vetran Governor Pat McCrory who has been using the power of the govt in NC to sheild Duke Energy [washingtonpost.com] from lawsuits [go.com] as a result of massive pollution. Spilling things like arsenic, lead, mercury and other things into NC waterways. In every single lawsuit the McCrory administration intervened and shut the lawsuits down. Now you have the lastest massive spill [nbcnews.com]

they kinda stole from themselves (1)

Anonymous Coward | about 2 months ago | (#46216645)

The fund in question was funded by collecting from individual gas stations. I am not sure if the various states actually spent other funds on the cleanup, just that the funds that were "stolen" came from funds paid by the gas station operators.

You have to wonder which costs more... (1)

tlambert (566799) | about 2 months ago | (#46216655)

You have to wonder which costs more... underground storage tanks which *don't leak*, or underground storage tanks which *leak*.

Re:You have to wonder which costs more... (1)

Pope (17780) | about 2 months ago | (#46218459)

They don't leak right away, so obviously the ones that leak later are cheaper. At least on the balance sheet at the end of the quarter that the tank was installed, which is all that matters in corporate finance.

If I did it, I'd be in jail (2)

erroneus (253617) | about 2 months ago | (#46216733)

Insurance fraud is a big giant problem and more often criminal. But since this is another of those "too big to fail" organizations, we'll just have to let this one slip. The executives enabling and making this happen, of course, keep their bonuses and all that but there may be layoffs or raises may not come again this year.

Why do insurers pay? (1)

sabbede (2678435) | about 2 months ago | (#46216807)

Insurance companies don't actually like paying out, so why are they paying when they know damn well the government has a fund that covers it?

Take the malevolent oil company out of it. (1)

rmdingler (1955220) | about 2 months ago | (#46216837)

There are folks, even in this jaded epoch, who would return the extra money paid by a homeowner's policy and a vehicle insurer, say, on an accident to the family car in the driveway.

People this honest are rare. Notably, fudging one's tax return and bilking insurers isn't even the threshold where dishonesty begins for many.

Reintroduce the very likely morally defunct petro-executive: "Huh, so we can clean up this mess without jeopardizing 3rd quarter bonuses? He probably double-dipped for a relatively small share of the pie.

Subrogation (1)

J'raxis (248192) | about 2 months ago | (#46216867)

The insurance companies most likely put a subrogation clause [wikipedia.org] in their contracts. Now that they know the oil companies received additional payouts from a third party, they can come in and claim that money.

It's all a stupid game (1)

Impy the Impiuos Imp (442658) | about 2 months ago | (#46217399)

I'll shorten the discussion: blah blah blah, you're gonna pay for cleanup one way or another, either taxes or increased prices in the products.

Now go home and surf for Tay Tay, or Miley, or that Russian skater you perves.

Should be made an example of (1)

microbox (704317) | about 2 months ago | (#46217681)

The individual who engaged in fraud should go to jail. A judge should make an example of them -- stealing tax dollars. Pigs might fly.

Wherever there is money there is fraud (1)

RogueWarrior65 (678876) | about 2 months ago | (#46217737)

I hate to burst your anti-corporate bubble but wherever there is money to be made, there will be douchebags willing to subvert the original intentions of punitive damages for their own personal gain. There is a long list of plaintiffs filing claims against BP who have no presence in the Gulf region. There is an even longer list of obnoxious law firms e.g. the law offices of James suck-a-glove who will be the real beneficiaries of civil suit awards. If you think corporations charge too much for their products and services, bear in mind that a lot of that supposed profit goes to insuring themselves against an inevitable future lawsuit. If you think that mean, evil, filthy rich corporations can afford it, remember that even a mom-and-pop business has to have liability insurance and that starts in the several thousand dollar range.

Lazy Buggers (1)

sociocapitalist (2471722) | about 2 months ago | (#46218723)

"The lawsuits against the oil companies allege fraud or other civil, not criminal, claims, which have a lower burden of proof and do not lead to jail time."

Perhaps if there were more criminal claims there would be less corporate fraud (etc).

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