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Oil Companies Secretly Got Paid Twice For Cleaning Up Toxic Fuel Leaks
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.'"
'The oil companies have, in effect, profited off polluting.'
Doh!
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?
He steals from the poor
And gives to the rich
Stupid bitch.
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?
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
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
Hmm, the humour and sarcasm seem to have been be lost on you.
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.
This and this guy. Mod up if you remember being pissed at how smug they were about it, the British bastards...
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.
"Only one thing is impossible for God: To find any sense in any copyright law on the planet." - Mark Twain
Wait are you saying that in the US you let oil companies poison your water supply and then pay them to clear it up?
Meet another example of the new US Welfare Queens.
"Because we are not employing at entry level, offshoring will kill our industry stone dead."
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.
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.
"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.
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?
Enable 3D printed prosthetics!
And now folks you see why Lamar Smith wants to hobble the EPA.
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 from lawsuits 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
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... underground storage tanks which *don't leak*, or underground storage tanks which *leak*.
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.
I don't read AC A human right
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?
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.
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?
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.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
The insurance companies most likely put a subrogation clause 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.
Liberty in your lifetime
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.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
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.
The individual who engaged in fraud should go to jail. A judge should make an example of them -- stealing tax dollars. Pigs might fly.
Like all pain, suffering is a signal that something isn't right
Seriously, we do...
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.
"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).
blindly antisocialist = antisocial
Definitely did not say that. I appreciate the words in my mouth, though.
one party is working very hard to save money by cutting back on enforcement of regulations. One guess as to which one.
Never let a lack of data get in the way of a good rant.
$2 Million fine for defrauding the state $25 million. Is my math wrong, or is that $23 million in profit? Utah, here I come to commit fraud so you will only fine me a fraction of what I steal.