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Local governments spent freely with BP's millions

Last April 21, BP’s Deepwater Horizon oil rig burned in the Gulf of Mexico. In the year since the oil spill, officials along the coast have gone on a spending spree with BP’s money.

Associated Press (2010)

Last April 21, BP’s Deepwater Horizon oil rig burned in the Gulf of Mexico. In the year since the oil spill, officials along the coast have gone on a spending spree with BP’s money.

NEW ORLEANS — Tasers. Brand-new SUVs. A top-of-the-line iPad. A fully loaded laptop. In the year since the gulf oil spill, officials along the coast have gone on a spending spree with BP money, dropping tens of millions of dollars on gadgets and other gear — much of which had little to do with the cleanup, an Associated Press investigation shows.

The oil giant opened its checkbook while the crisis was still unfolding last spring and poured hundreds of millions of dollars into Gulf Coast communities with few strings attached.

In sleepy Ocean Springs, Miss., reserve police officers got Tasers. The sewer department in nearby Gulfport bought a $300,000 vacuum truck that never sucked up a drop of oil. Biloxi, Miss., bought 14 SUVs. A parish president in Louisiana got herself a deluxe iPad, her spokesman a $3,100 laptop. And Okaloosa County in Florida spent $560,000 on rock concerts to promote its oil-free beaches.

In every case, communities said the new, more powerful equipment was needed to deal at least indirectly with the spill.

In many instances, though, the connection between the spill and the expenditures was remote, and lots of money wound up in cities and towns little touched by the goo that washed up on shore, the AP found in records requested from more than 150 communities and dozens of interviews.

Florida's tourism agency sent chunks of a $32 million BP grant as far away as Miami-Dade and Broward counties, which never saw oil from the disaster.

Some officials also lavished lucrative contracts on campaign donors and others. A Florida county commissioner's girlfriend, for instance, opened up a public relations firm a few weeks after the spill and soon landed more than $14,000 of tiny Gulf County's $236,000 cut of BP cash for a month's work.

The April 20 explosion on the Deepwater Horizon rig in the Gulf of Mexico killed 11 workers and spawned the nation's worst offshore oil spill. As BP spent months trying to cap the well and contain the spill, cities and towns along the coast from Louisiana to Florida worried about the toll on their economies — primarily tourism and the fishing industry — as well as the environmental impact.

All told, BP says it has paid state and local governments more than $754 million as of March 31 and has reimbursed the federal government an additional $694 million.

BP set few conditions on how states could use the money, stating only that it should go to mitigate the effects of the spill. The contracts require states to provide the company with at least an annual report on how the money has been used, BP spokeswoman Hejdi Feick said. But it's unclear what consequences, if any, the states could face if they didn't comply.

$400 million went for direct spill costs

Some of the money BP doled out to states and municipalities hasn't been spent yet, but the AP review accounts for more than $550 million of it. More than $400 million went toward clear needs like corralling the oil, propping up tourism and covering overtime.

Much of the remaining chunk consists of equally justifiable expenses, but it is also riddled with millions of dollars' worth of contracts and purchases with no clear connection to the spill.

William Walker, executive director of the Mississippi Department of Marine Resources, said it is clear now that communities bought more equipment than they wound up needing. But he doesn't regret handing out BP's money freely.

"At the time we were making these decisions, there were millions of gallons of oil going into the Gulf of Mexico with no clear idea when it would stop," Walker said. "We didn't wait. We tried to get (grant money) into circulation as quickly as possible. We didn't have any extra time."

When oil from the ruptured Macondo well began to lap at Louisiana's marshes, BP deployed an army of workers to sop it up and hired contractors who specialize in disaster cleanup.

Even with BP and the federal government taking the lead, many communities weren't content to rely on equipment they had before the spill.

Lafourche Parish President Charlotte Randolph billed BP for an iPad, saying she needed it in addition to her parish-paid BlackBerry to communicate with staff and other officials during the crisis. But she didn't buy the iPad until Aug. 26, a month and a half after the well was capped and several weeks after the federal government said much of the oil had been skimmed, burned off, dispersed or dissolved.

"Just because it wasn't streaming from the well any longer doesn't mean it wasn't approaching our shore," Randolph said. "My work is very important."

Lafourche Parish spokesman Brennan Matherne, who bought a new Dell laptop and accessories for $3,165, said working on the spill had worn out the computer he got just a year earlier for $2,700.

Biloxi, home to a strip of casinos overlooking the Mississippi Sound, bought 14 sport utility vehicles and pickup trucks, two boats, two dump trucks and a backhoe loader with its $1.4 million share of BP grant money.

Mayor A.J. Holloway, who drove a city-owned 2006 GMC Yukon before the spill, now has one of the vehicles the city purchased with the BP grant — a black 2011 Chevy Tahoe 1500 LT that cost more than $35,000. The city's public works director and chief engineer also are driving SUVs bought with BP money.

Holloway declined to answer questions about his new vehicle. City spokesman Vincent Creel said the mayor has used it to travel to "countless meetings" about the spill and to gauge the city's response with his own eyes.

Some Mississippi communities took a conservative approach in using their share of the money. Bay St. Louis received $382,461 to buy safety vests, street barricades, radios and other gear, but decided against buying a vacuum truck or other expensive equipment. City Clerk David Kolf said local officials trusted BP's word it would handle all the cleanup, so they didn't see a need to buy a "bunch of new toys."

"They had a lot of heavy equipment already staged here," he said. "We don't have the training. We don't have the personnel."

Florida, Louisiana, Mississippi and Alabama each got an initial $25 million from BP, followed by an array of payments for tourism marketing, seafood monitoring and cleanup programs.

More than $300,000 of BP money went to Kenny Loggins, the Doobie Brothers and Lynyrd Skynyrd for a pair of rock shows to promote the state's oil-free beaches; BP shelled out an additional $260,000 in concert-related costs.

In Alabama, the state Emergency Management Agency distributed $30 million to local governments without rejecting a single request.

Mississippi gave money to 14 counties and cities along the coast, which was dotted with tar balls. In early August, after the well was capped, the state instructed counties and cities to stop spending BP's money without approval from state officials.

"We were trying to make the change from protection to restoration and recovery, and that's where we are now," Walker said.

Louisiana doled out its initial $25 million to state agencies, including $10 million for the attorney general's office to devise its legal case against BP and the companies involved in the spill. State agencies spent nearly $9 million more on equipment, including boats, air monitoring units, mobile radios and life vests.

Blue-collar Plaquemines Parish, which has absorbed some of the spill's worst environmental damage, has received slightly more than $1 million in BP money, of which $998,405 went to cover oil-related overtime and other payroll expenses.

"I didn't run up bills. I treated their money like I treated our own," said Plaquemines Parish President Billy Nungesser. "Maybe down the road I'll look and say we should have stockpiled."

Payments added up to better PR for company

When BP was heavily under attack from the top down for its response to the rapidly growing environmental disaster, the company started throwing huge sums of money at the problems. Cutting checks to governments along the coast addressed both issues, even if it meant waiting until later to figure out details like how officials would have to account for the cash.

The payments to governments gave BP the kind of good PR it desperately needed, said Daniel Keeney, president of a Dallas public relations firm. By giving money to communities and allowing them to spend it largely as they saw fit, BP also put a buffer between itself and any questionable spending.

"Whether the funds could be perceived as being wasted or not really reflects on the organization accepting the money rather than BP," Keeney said.

Louis Skrmetta, one of the tens of thousands of business owners and individuals still waiting to get a share of a $20 billion claims fund established by BP, finds the state and local governments' spending galling, even if it's almost all BP's money.

Skrmetta runs a three-boat fleet that has a contract with the National Park Service to ferry day trippers to Ship Island, a recreation area about 10 miles offshore from Gulfport, Miss. He can't understand why BP paid so much to governments while businesses were suffering.

"I didn't think there was much logic in it," Skrmetta said. "Now, looking back in retrospect, it was a way to win over politicians, a way to win over the media."

The oil spill was a boon for private contractors and consultants. Governments have spent more than $19 million of BP's money to hire contractors.

The Louisiana attorney general's office has spent $4 million and counting of BP's money to hire outside lawyers and accountants to help piece together litigation against the company. Five of the seven law firms hired and their attorneys have poured more than $80,000 total into Attorney General Buddy Caldwell's campaign coffers in recent years.

Amber Davis, who lives with Gulf County Commissioner Bill Williams, incorporated Statecraft LLC less than a month after oil began streaming into the gulf. Three months later, Statecraft won a monthlong, $14,468 contract to perform public information work for the Florida county of about 15,000 people.

Gulf County awarded an identical one-month, $14,468 contract — this one for monitoring beach pollution — to Florida Eco Services, a company founded days after the rig explosion by Patrick Farrell, whose wife is on the board of the local Chamber of Commerce.

Local authorities could have taken even fuller advantage of BP's largesse had the company or state officials not nixed some requests. Police in D'Iberville, Miss., for instance, were denied a $245,000 mobile command unit, a $140,000 hazardous materials vehicle and a $19,000 Harley-Davidson.

"If we had to establish barricades, they thought it would be more maneuverable," City Manager Michael Janus said of the motorcycle. "It was a bit of a reach, obviously."

Local governments spent freely with BP's millions 04/11/11 [Last modified: Tuesday, April 12, 2011 12:11am]

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