The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

This week BP has spent hundreds of thousands of dollars on advertisements in the New York Times, Wall Street Journal, Washington Post and elsewhere bemoaning the fact that the company was required to compensate an escort service for losses it incurred as a result of BP’s 2010 Deepwater Horizon blowout, spill and subsequent unprecedented environmental and economic disaster. What, pray tell, makes an escort service any less worthy (assuming it meets the Settlement Agreement’s objective eligibility requirements) than say a nudist colony or lingerie shop, two business types expressly listed as eligible under BP’s definition of tourism-related entities?

Is it too far a stretch to imagine that folks who frequent such services might not have had the necessary disposable income in the post-spill economic malaise that descended on the Gulf? Admittedly, I have not had occasion to engage an escort, but I see from the movies that tourists often inquire of the hotel concierge when such needs come calling. If the tourists aren’t in the hotels in the first place, then it follows that the girls are not getting the calls that pay.

And really, is BP the moral authority on this issue? The company has been accused in the past of spending lavishly on, err… adult “entertainment,” not to mention the oil major’s former boss’s experience with such providers.

But let’s get back to the real issue. The 1,200 page Settlement Agreement has clear, unambiguous and objective qualification criteria that determine payment eligibility. BP wrote those rules over the course of several months, with the advice of the best paid lawyers and financial professionals in the world. BP encouraged businesses to apply based on its rules.

BP even told the judge overseeing the settlement negotiations that the company understood and agreed that in some cases the application of its rules may appear to result in payments going to businesses who could not conventionally prove a loss was the result of the spill:

“Once a business meets the causation requirements, for purposes of quantifying compensation, all revenue and variable profit declines are presumed to be caused by the spill, with no analysis required to determine whether the declines might have been due, at least in part, to other causes.” – Holly Sharp, BP Expert, in Sworn Statement to Court


“If proper application of the methodology with accurate financial data yields a determination that causation is satisfied, BP agrees that all losses calculated in accordance with the Settlement Agreement are presumed to be attributable to the Oil Spill. Nothing in the Settlement Agreement provides for an offset where the claimant’s revenue decline was attributable to a factor wholly unrelated to the Oil Spill. Such “false positives” are an inevitable concomitant of an objective quantitative, data-based test.” – BP Attorney

Were they just lying to all of us, the Court included?

To be clear, no one is saying that businesses that were not negatively impacted by the spill should attempt to game the system. That said, proving such a loss in a conventional way, using a jury, could be problematic on many levels. Hence the introduction by BP of these objective financial tests.

Not to mention, isn’t a settlement a compromise? A yielding of the highest hopes in exchange for certainty and resolution? In a settlement the defendant does not have to admit wrongdoing and the plaintiff does not have to prove his case to a jury. Case closed.

Finally, BP knew that all sorts of businesses were impacted by its spill. As part of the “compromising” that lies at the heart of any settlement, BP negotiated for certain businesses to be excluded from compensation. If you own a bank, insurance company, or casino, you are out of luck. You cannot apply for compensation. Same goes for real estate developers. Such exclusions were part of the negotiation process. BP could have asked to exclude escort services. They did not. Plaintiff counsel of course did not want to exclude any business that was impacted. Yet both parties knew they had to give in order to get.

BP wants to just keep on taking.


  1. Gravatar for Eyeswideopen

    The way BP is challenging all these claims seems like their running the biggest escort service on the gulf. Current stats show 28,105 Incomplete Denials due to ever changing document requirements.

  2. Gravatar for F. Guenther

    BP is currently alarming environmental groups with a push toward 20,000 psi in yet deeper water. Has it learned anything? And BP intends to do this around the world. But the company hasn't figured out the basics of ethical business practices, like how to treat their own employees fairly and honestly, in compliance with their own Code of Conduct, that emphasizes One Team, Safety, Respect, Excellence, and Courage.

    Iran is wanting BP back... but how does BP treat indigenous people (like Americans)? In 1989 BP converted only their American employees to a “new and improved” pension plan to which the end result was that over 50% of the converted US employees’ pension plans were gone, pocketed by BP. When BP finally converted the pensions of its British employees, fully twenty years later (in 2009), they grandfathered ALL current British employees into the superior existing plan, yet all the Americans, under age 50 were immediately forced into an inferior plan.

    Her Majesties Government is worried about British pensions and jobs (Washington Post), and filed a brief on behalf of BP in a Texas courtroom. But did BP ever reveal to Her Majesties Government what it did to the pensions of the original Americans it acquired when it took over 100% of Standard Oil of Ohio, the smallest of the original Standard Oil companies?

    BP wants to be treated fairly in the United States and Alaska, but look what it did to the pensions of certain American employees, while currently claiming that "One Team" is part of their Code of Conduct. This couldn’t be farther from the truth.

    Richard Dorazil – promoted from VP, Total Rewards, Western Hemisphere of BP America, to Global Reward, Executive Compensation of BP in LONDON, shortly after brushing off SOHIO heritage employees with a blatantly dishonest memo over the SOHIO pension issue. Dorazil has repeatedly published statements in Business Insurance Weekly that are in direct conflict with what has been done to SOHIO heritage staff about allowing employees a choice, old or new plan... What a hypocrite!

    BP, knowing about this problem for over a decade, evidenced by their establishment of a Sohio pension supplement for Band D executives (aimed at bringing their total pension back near the original Sohio plan, and closer to their executive peers who came from Amoco and Arco)... but BP did nothing for the rank and file employees, and one of those was Donald Vidrine who was the highest ranking BP employee on the Deepwater Horizon when it exploded (he was a "Company Man"), and subsequently refused to testify because he was in poor health.

    The Office of Ombudsman - established following BP's plea agreement with the EPA after admitting guilt in illegal environmental disposal in Alaska, allowed two staff members to be hired by BP in the middle of the Sohio heritage investigation which includes 450 plus heritage Sohio employees that have filed concerns. Imagine if your attorney was allowed to quit and join the other side. Where was BP’s much touted Code of Conduct and ethics then?

    The EPA - very concerned about the "multiple felon" BP who has repeatedly violated the law in the USA (breaking environmental laws in Alaska, twice, the Texas City explosion, the propane trading scandal, and the Deepwater Horizon, America's worst environmental catastrophe. It views BP as a repeat offender, and BP is on probation in the USA.

    The oldest continuously employed Sohio heritage employee is at least 70 years old, while BP employees of Amoco or Arco heritage are typically retired by age 60 yet heritage Sohio employees watch their co-workers of different heritage smiling as they walk out the door to a great retirement. Heritage Sohio employees on average will have to work an additional 10-11 years to recoup the pensions that BP pilfered in 1989.

    BP could have fixed this problem at any time. The company knew about it, but ignored it while they paid off executives of Sohio heritage so they would remain silent.

  3. Gravatar for Mike Gallagher

    I just read the comment above by Mr, Guenther. I find myself lacking for words that I might add to what he has already written. All I can do is substantiate what he has stated and stand in support of his facts. I happen to be one of the long term loyal employees who's seen his current "AS GOOD OR BETTER" pension compared to what it would have been had BP not lied to us all with their written, documented statement that said the change they made to our retirement plan "...will be as good or better.." than the pension plan we were promised when we were hired. Using every possible mathematical scenario, there was absolutely no possible scenario that could back up the lie. We've all seen the bombardment on the media by BP touting how great a company they are. There was a time when I was proud of the company I worked for. Not after what they've done to me personally. Now all I want to do is retire. I don't want to work into my 70's. I want BP to do the right thing. I can't say I'm optimistic, however, given the fact that BP could have corrected this life changing problem like they did for all of their UK employees, yet chose not to, brushing us aside while we all leave it up to the Ombudsman. I just don't understand a management that really needs a separate office to "recommend" doing what they should already know is the right thing. Where's integrity? Honor? Morality? Loyalty? I certainly at this point, don't think these values are present in BP Upper management. Hopefully in the near future, BP will step up, do what's right and give us what we were promised when we all made the hard choice to work remotely, away from our families for long periods of time, knowing that by making this huge sacrifice up front, we'd be able to retire comfortably. Turns out it was all a lie.

  4. Gravatar for 30yrBP

    There is little doubt that BP is in violation of their own Code of Conduct regarding their treatment of their own employees. One example is provided in the comments already provided specific to their treatment of SOHIO heritage employees.

    What I find striking is the nerve that BP management has to make a request for Fairness and Reasonableness regarding the Macondo claims when Fairness and Reasonableness are all their SOHIO heritage employees are asking for. The response of BP Managment and Manager of Compensation : Laugh in their face and tell SOHIO employees that what BP did to their retirement may well have not been Fair or Reasonable but it was "technically legal" so you little people can go rot.

Comments are closed.

Of Interest