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Big oil players BP, Shell, Chevron, Exxon & others accused of profiting from polluting

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In a story first reported by Reuters’ Mica Rosenberg, nearly all of the major oil producing companies have been accused of defrauding numerous states by double-dipping when passing along the costs of replacing dilapidated and leaking fuel storage tanks. Federal law requires replacement of aging tanks, with the EPA calling such underground storage facilities the single largest threat to groundwater in the United States.

Built largely during the expansion of the Nation’s transportation network during the 1950s and 1960s, leaking tanks can contaminate neighboring properties and aquifers with diesel, gas, and other carcinogenic elements. Many states have created funds that assist oil companies and others in offsetting the cost of replacing compromised tanks.

Thomas Schruben, an environmental engineer who helped draft tank replacement legislation before retiring from the EPA, had long suspected that oil companies were illegally profiting by collecting reimbursement money from state funds while concurrently filing claims with company insurers to cover the very same replacement costs. In essence, these companies were double-dipping, using taxpayer funded money for the replacements while profiting from insurance policy payouts. All of this was done without the knowledge of the states or apparently the insurance companies.

Schruben, along with his attorney Dennis Pantazis, are now involved in more than one dozen lawsuits in various states where they are attempting to claw back the ill gotten gains. To-date they have been quite successful, as the evidence is damming.

“It appears this was a really common practice and it’s very disconcerting,” Colorado Attorney General John Suthers told Reuters. “Basically the companies were defrauding the state.”

“When I first saw these cases, I thought this is kind of incredible,” said New Mexico Assistant Attorney General Seth Cohen, who handled the lawsuit for the state. “The oil companies have, in effect, profited off polluting.”

Notably, several of the accused companies appeared contrite and open to the possibility that they may have inadvertently participated in the scheme, suggesting that because of large corporate bureaucracies the left hand may not always have known what the right hand was doing.

Chevron told Reuters that the company “takes seriously any allegation that it made misrepresentations or otherwise acted improperly and is conducting on-going dialogue with various state officials.” Similarly, Exxon took a conciliatory tone, reporting that it had informed 24 states that the company had discovered insurance payouts received on top of state claims. Exxon said it would make voluntary reimbursements in such instances.

BP on the other hand, as seems typical of the company of late, refused to acknowledge any improprieties and vowed to fight the allegations. “The claims in the complaints are without merit, and BP plans to defend itself against the allegations,” said a company spokesperson.

It seems as if BP feels it can do no wrong, as the company has been successful in manipulating the public through massive media campaigns, including a disingenuous Olympic sponsorship which many found offensive. Perhaps the United States should consider applying The Monroe Doctrine by extending its reach to include corporations as is suggested in a new novel by Rick Lacey, The BP Corollary.

In his novel, Lacey, a former BP insider, advocates for the Obama Administration to use the powers inherent in The Monroe Doctrine to expel BP from the Western Hemisphere. The primary characters in Lacey’s book make a case that the company engages in “flagrant and chronic wrongdoing,” which “is detrimental to the people and resources of the United States.” As such, according to Lacey’s BP Corollary to The Monroe Doctrine, BP should be forced to “divest its American assets, make restitution for financial harms to Americans, and leave the hemisphere of the Americas.”

The BP Corollary is of course a work of fiction, and a highly entertaining one at that. As such, it is doubtful we will see BP depart the United States, or the Western Hemisphere, but here’s hoping the company will finally live up to its “Commitment to the Gulf.” Sadly, there is little evidence suggesting it will do so.

A work of fiction by former BP insider Rick Lacey based on the events leading up to the BP Deepwater Horizon explosion and subsequent environmental and economic disaster.

A work of fiction by former BP insider Rick Lacey based on the events leading up to the BP Deepwater Horizon explosion and subsequent environmental and economic disaster.

2 Comments

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  1. Charlie Peters says:
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    Dr. Stan’s California water supply opinion

    http://mediaarchives.gsradio.net/radioliberty/121213d.mp3

  2. Rick Lacey says:
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    Excellent point about BP! The relentless media campaign has caused many to accept that BP is an otherwise responsible corporate citizen that just had an unfortunate accident. Those who can’t decide whether to file a claim against BP really owe it to themselves to learn the truth.

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