As the Macando well spewed into the Gulf of Mexico, BP tried to gain some positive PR by opening its checkbook and pouring money out to local governments with few strings attached. Initially, Florida, Louisiana, Mississippi and Alabama each got $25 million, followed by other payments for tourism, seafood and cleanup.
An Associated Press investigation shows that millions of these dollars were spent on things unrelated to the oil or cleanup.
All told, BP PLC 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.
Some of the money BP doled out to states and municipalities hasn’t been spent yet, but the AP’s 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, the AP found.
Some of the money went for gadgets, such as Tasers for the police in Gulf Port, Mississippi; some went to campaign donors, family and friends, and some localities put it in the bank and then billed BP for expenses. Florida spent $560,000 on rock concerts to promote tourism, $300,000 of which went to Kenny Loggins, the Doobie Brothers and Lynyrd Skynyrd. Florida's tourism agency sent money to Miami-Dade and Broward counties in the east coast, even though they were unaffected by the oil. Private contractors and consultants did well, especially if related to a local official.
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, Fla., Commissioner Bill Williams, incorporated Statecraft LLC less than a month after oil began streaming into the Gulf. Three months later, Statecraft won a month long, $14,468 contract to perform public information and government liaison work for the county of about 15,000 people.
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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. Farrell says he has a background in managing and maintaining properties, as well as beach restoration.
County Attorney Jeremy Novak, who also is an attorney for Florida Eco Services, said it was a matter of giving business to locals rather than out-of-state contractors.
“It sounds like a bias, and it is, but I’m glad people in Gulf County got work and actually had the ability to feed their families,” Novak said. “I don’t see it as profiteering. I see it as obviously doing what you can because what you’re doing for a living isn’t available to you.”
The mayor of Biloxi is now driving a 2011 Chevy Tahoe costing $35,000, one of 14 SUV's bought by the city, along with 2 boats, 2 dump trucks and a backhoe loader, all with BP money. A Louisiana parish president had to buy a new, state of the art, IPad, because, “My work is very important. Perhaps one day you could follow me somewhere and learn what my work involves. I must be in contact at all times.” and her parish owned Blackberry wasn't enough. Her spokesman had to have a new Dell laptop, because spill related work had worn out his year old one. Somehow, in all this, Plaquemines Parish President Billy Nungesser comes out looking pretty good. Despite the fact that his parish absorbed some of the worst environmental damage, of the $1 million dollars he received, $998,405 went to 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, an outspoken critic of BP and the federal government’s response to the spill. “Maybe down the road I’ll look and say we should have stockpiled.”
Residents still waiting for payment from the Gulf Compensation Claims Fund may not be particularly happy about these local spending sprees, and some of the heavy equipment and boats will require taxpayer money in the future to maintain them.
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