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BP Chief on Hot Seat

Source: WSJ

Posted on 18 Jun 2010

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BP PLC Chief Executive Tony Hayward went to Capitol Hill to apologize for the disaster caused by his company's gushing Gulf of Mexico oil well, and to absorb the blows as American politics requires when business leaders stumble into tragedy or scandal.

Mr. Hayward stuck to his plan. He sat for hours on Thursday, alone at a witness table, parrying questions from indignant members of the House Energy and Commerce Committee in a deliberate monotone.

Over and over, he said he wasn't involved in the decisions preceding the accident and declined to speculate on causes until investigations were complete.

Summoning executives of companies caught up in financial or legal trouble to receive televised scoldings is a ritual of U.S. politics. Detroit auto titans, Wall Street bankers, and the head of Japanese auto giant Toyota Motor Corp. have all done time in Congress's dock as lawmakers looked for someone to blame for the calamities of the past two years.

Even by the standards of these proceedings, the fury directed at Mr. Hayward was unusual. Democrats accused BP of sacrificing safety for profit. One said the video of the Gulf spill made her physically ill. A Louisiana Republican held up a photograph of an oil-slimed pelican.

And when one senior Republican—Rep. Joe Barton of Texas—stepped up to apologize to Mr. Hayward, the backlash was so severe he was forced to apologize for his apology.

Just minutes into the hearing, Mr. Barton, a ranking member of the committee, denounced the Obama Administration for pushing the British oil company to agree Tuesday to put $20 billion into a fund to cover damages caused by the disaster. Mr. Barton called the plan a "slush fund."

To that point, Mr. Barton's critique echoed statements by other Republicans. Then he went further.

"I apologize," Mr. Barton said. "I do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong is subject to some sort of political pressure that is—again, in my words—amounts to a shakedown. So, I apologize."

Rep. Barton left the hearing immediately after making his statement. The aftershocks rumbled throughout the day.

Mr. Hayward's entourage included a phalanx of dark suits including aides, experts and a body guard. He brought a public-relations specialist.

He soon found that $20 billion and an apology weren't going to make his day better.

"The explosion and fire aboard the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico never should have happened—and I am deeply sorry that they did," Mr. Hayward said in an 11-page written statement.

Members of the House Energy and Commerce Subcommittee on Oversight and Investigations were having none of it. They grew increasingly frustrated as Mr. Hayward dodged specific questions aimed at pinning blame for the explosion on specific BP decisions and on him as the company's leader.

"With respect, sir, we drill hundreds of wells each year," he said slowly, fingering a pen as he testified.

"That's what's scaring me," shot back Rep. Michael Burgess, a Texas Republican.

Energy and Commerce Committee chairman Henry Waxman (D., Calif.) accused Mr. Hayward of stonewalling.

Rep. Joe Barton said that BP's meeting with the Obama administration resulting in the oil company setting aside $20 billion to cover Gulf of Mexico oil spill costs was a "shakedown."

"I'm not stonewalling," Mr. Hayward said. "I simply was not involved in the decision-making process" before the explosion.

The hearing ground on and on. As the clock crawled toward 5 p.m., Mr. Hayward's stated positions remained unchanged.

The same couldn't be said for Mr. Barton. The Texas lawmaker's apology to Mr. Hayward had touched off a storm. The White House, stung by earlier criticism from Republicans of its $20 billion deal with BP, unloaded with a rare mid-hearing rebuttal to Rep. Barton.

"What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small-business owners and communities whose lives have been devastated by the destruction," a White House spokesman said. Vice President Joe Biden called Mr. Barton's views "incredibly insensitive."

Republican lawmakers rushed to disassociate themselves from Mr. Barton's comments. Rep. Jeff Miller, a conservative Republican whose district includes beaches on Florida's panhandle, called Mr. Barton's comments "reprehensible" and said he should step down as ranking member of the Energy and Commerce Committee. "Mr. Barton's remarks are out of touch with this tragedy," Mr. Miller said in a written release.

Rep. John Boehner of Ohio, the Republican leader in the House, distanced himself from Mr. Barton and his characterization of the fund's creation as political extortion and said BP ought to pay "every dime" of the damages. Later, Mr. Boehner and other top House Republicans issued a statement saying Mr. Barton's remarks "were wrong," and welcoming BP's "initial pledge of $20 billion" to pay for economic damages.

Mr. Barton was told by the Reps. Boehner and Eric Cantor—the top two House Republicans—"that he needed to apologize immediately, or he would lose his ranking-member seat immediately," a leadership aide said.

At about 3 p.m., Mr. Barton returned to the hearing room to revise and extend his earlier remarks.

"If anything I have said this morning has been misconstrued to the opposite effect, I want to apologize for that misconstrued misconstruction," he said.

Then he left the room.