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Archive for May, 2014

As expected, the Louisiana Senate voted 25-11 on Friday to accept the House amendment to SB 459, which made the prohibition against governmental entities’ ability to seek redress from 97 oil, gas and pipeline companies for the damages inflicted on Louisiana’s erstwhile freshwater marshlands, effectively sealing the fate of efforts by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) to hold the companies accountable for their actions.

The amendment, passed earlier by the House in a 59-39 vote made SB 469 retroactive, which is tantamount to killing the SLFPA-E litigation, prompting Ret. Gen. Russel Honeré to observe, “The flag of the oil companies still flies over the Louisiana Capitol.”

But in passing SB 469, which Gov. Bobby Jindal is almost certain to sign into law, given his backing of the bill, the Louisiana Legislature may have pulled the proverbial rug from under Louisiana coastal city and parish governments, according to a five-page analysis of the bill by Robert R.M. Verchick of the Loyola University New Orleans College of Law.

Also participating in drafting the report on the potential repercussions of the bill were Zygmunt J.B. Plater, professor, Boston College Law School and former Chairman of the State of Alaska Oil Spill Commission’s Legal Task Force; William Andreen, professor of law, University of Alabama School of Law, and Christine A. Klein, professor and director, LL.M. Program in Environmental & Land Use Law, Levin College of Law, University of Florida.

Among other the bill by Sens. Bret Allain and Robert Adley (who have received $632,000 in contributions from oil and gas interests—$597,950 for Adley and $34,140 for Allain), provides:

  • Except as provided in this Subpart [the state coastal zone management law], no state or local governmental entity shall have, nor may pursue, any right or cause of action arising from any activity subject to permitting under R.S. 49:214.21 et seq. [the state coastal zone management law], 33 U.S.C. 1344 [§ 404 dredge or fill permitting under the Clean Water Act][,] or 33 U.S.C. 408 [the Rivers and Harbors Act] in the coastal area as defined by R.S. 49:214.2, or arising from or related to any use as defined by R.S. 49:214.23(13), regardless of the date such use or activity occurred (emphasis theirs).

That provision of the bill would appear to again place the state at odds with federal statutes, specifically the congressional Oil Pollution Act of 1990 (OPA) which says, in part:

  • Notwithstanding any other provision or rule of law, and subject to the provisions of this Act, each responsible party for a vessel or a facility from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon the navigable waters or adjoining shorelines or the exclusive economic zone is liable for the removal costs and damages…

Moreover, federal statute says that the list of recoverable costs and damages includes economic losses and natural resource damages incurred by state and local governments. Damages under the federal statute shall include:

  • Damages for injury to, destruction of, loss of, or loss of use of, natural resources, including the reasonable costs of assessing the damage, which shall be recoverable by a United States trustee, a state trustee, an Indian tribe trustee, or a foreign trustee;
  • Damages equal to the net loss of taxes, royalties, rents, fees, or net profit shares due to the injury, destruction, or loss of real property, personal property, or natural resources, which shall be recoverable by the Government of the United States, a State, or a political subdivision thereof.
  • Damages for net costs of providing increased or additional public services during or after removal activities, including protection from fire, safety, or health hazards, caused by a discharge of oil, which shall be recoverable by a State, or a political subdivision of a State.

So what does all that have to do with local governmental entities?

Simply this: because SB 469 would limit the types of claims that state and local governmental entities may pursue, the report says. This means if BP should raise defenses of claims from the BP spill of 2010 based on SB 469 and even only partially succeed, “the results would needlessly deprive Louisiana and its communities of precious revenue and cause considerable embarrassment of state leaders” because it specifically excludes economic or natural resource damage claims under OPA, according to the report which was signed by Verchick.

Economic damages and damages from the loss of natural resources comprise the very basis of pending claims against BP, Verchick says.

In its OPA suit against BP, for example, Jefferson Parish has claimed that it has suffered, among other things:

  • Ecological damage;
  • Damage to the quality of life of its citizens;
  • Loss of sales tax revenues, use tax revenues, parish tax revenues, inventory tax revenues, hotel and motel tax revenues, severance tax revenues, royalties, rents and fees;
  • Increased costs of providing services to the citizens of Jefferson Parish;
  • Damage to the natural resources of Jefferson parish;
  • Increased costs for the monitoring of the health of its citizens and the treatment of physical and emotional problems related to the oil spill;
  • Increased costs for debt service;
  • Loss of fees for permits and licenses;
  • Loss of fines and forfeitures income;
  • Increased administrative costs.

State senators who represent Jefferson Parish who voted for SB 469 in its amended form and the amount of campaign contributions they have received from oil and gas interests (in parentheses) are:

  • John Alario, Senate President: $124,400;
  • David Heitmeier: $44,300
  • Jean-Paul Morrell: $87,800;
  • Gary Smith: $87,600.

TOTAL: $344,100 (Ave: $86,000 each).

Alario is a Republican while the other three are each Democrats, which illustrates that the money of big oil can purchases allegiances on each side of the aisle.

House members from Jefferson Parish who voted for the amended bill and their oil and gas contributions (in parentheses) include:

  • Bryan Adams: $9,000;
  • Robert Billiot: $32,800;
  • Jerry Gisclair: $3,750;
  • Cameron Henry: $30,000
  • Christopher Leopold: $29,800;
  • Nick Lorusso: $21,700;
  • Julie Stokes: $20,000.

TOTAL: $147,050 (Ave. $21,000 each).

GRAND TOTAL, HOUSE AND SENATE: $491,150 (Ave. $44.650 each).

“Because SB 469 works retroactively, it could undo all of these claims,” Verchick said.

If Jindal signs the bill into law, it would also apply prospectively. “So if, say, one of the supertankers offloading at the state’s offshore oil port caught fire and started pouring oil into Lafourche Parish, or if a major pipeline in Plaquemines Parish ruptured, or an oil rig anywhere in state coastal waters blew up, as BP’s Deepwater Horizon did, then no parish or city that was affected would be able to bring a claim for economic losses, not even if it cost taxpayers millions—or billions—of dollars,” he said.

Louisiana produces nearly 1.25 million barrels of crude oil per day. It hosts the world’s only offshore superport for oil and gas tankers and is crisscrossed by more than 100,000 miles of oil and gas pipelines. “Does Gov. Jindal really want to sign a law that could immunize the oil and gas industry from paying for economic losses caused by any oil spill (however reckless the behavior) in the state’s coastal zone?” Verchick asked in his report.

He said Jindal, in the opening week of hurricane season, should consider the terrible risk the law would impose on fragile communities along the Louisiana coast. “Whatever one thinks about SLFPAE’s lawsuit, such expansive action cannot be justified. It’s like bombing the Gulf of Mexico to catch a single snapper,” he said.

The report said the most significant risk could be the aftermath of future oil spill events that may occur wholly within Louisiana’s coastal zone, including potential ruptures in any of the more than 125,000 miles of oil and gas pipelines in Louisiana or a spill occurring at the Louisiana Offshore Oil Port (LOOP), the largest point of entry for waterborne crude oil entering the U.S., or from a tanker rupture similar to the Exxon Valdez spill.

“We emphasize that this is a significant litigation risk faced by the state and local governments should SB 469 be signed into law,” he said. State and local governments will also have counter-arguments that they can raise, namely that SB 469’s prohibitions will trigger conflict-preemption such that OPA’s damages provisions will take precedence over the prohibitory language of SB 469.

“Implied preemption can also take the form of conflict preemption where complying with both federal law and state law is impossible or where the state law ‘creates an unacceptable “obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”

Arguably, the application of SB 469 to prevent certain state or local governmental entities from pursuing the full panoply of damages available under OPA may present such an obstacle and could be found by a court to be conflict-preempted,” Verchick said.

“These open questions present a significant litigation risk to such governmental entity claims. A court could plausibly interpret SB 469 to dismiss or limit damage claims, now before the court, that the state and its subdivisions have brought against BP. Regardless of how the court ultimately rules, the very existence of these eventualities will devalue the plaintiffs’ settlement posture and perhaps lengthen the time those governmental entities will go without recompense for these categories of economic loss,” the report concluded.

But it isn’t very likely that much thought will be given to the implications cited by Verchick; legislators and Jindal will be far too busy counting the $6 million or so they have received in big oil campaign contributions to give the report anything more than a cursory perusal.

Here is the way the Senate voted on the amended version of SB 469 which kills the SLFPA-E litigation:

YEAS

Alario

Adley

Allain

Amedee

Buffington

Chabert

Claitor

Cortez

Donahue

Erdey

Gallot

Heitmeier

Johns

Long

Morrell

Morrish

Peacock

Perry

Riser

Smith, G.

Smith, J.

Tarver

Thompson

Walsworth

White

Total – 25

NAYS

Appel

Broome

Brown

Crowe

Dorsey-Colomb

Kostelka

Martiny

Mills

Murray

Nevers

Peterson

Total – 11

ABSENT

Guillory

LaFleur

Ward

Total — 3

As a refresher from our previous post, for a complete list of campaign contributions from oil and gas interests to our 144 current legislators as compiled by Moss Robeson, click here: Copy of Campaign Contributions

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“The flag of the oil companies still flies over the Louisiana Capitol today.”

—General Russel Honoré, US Army (Ret.), leader of Louisiana’s GreenArmy, and candidate for governor, commenting on the Louisiana House’s vote Thursday to not only kill future lawsuits against oil companies by levee boards, but to make such prohibition retroactive. The vote kills efforts by the Southeast Louisiana Flood Protection Authority-East (SELPA-E) to force 97 oil and gas companies to repair the damage they have inflicted on Louisiana’s coastline and marshes over decades of pollution and misuse,.

 

“Thank all the people who worked to try make the oil industry obey the law and the legislators who voted to do so. I think many of the legislators who voted to kill the lawsuit know perfectly well that they were doing the wrong thing. This fight is not over. We will see you in court. And we will see you at the next election. Apparently a majority of the legislators believe that the oil and gas industry actually is above the law, which is an interesting concept to embrace in the United States.”

—John Barry, teagued by Jindal as vice president of SFLPA-E, and who has continued to fight on behalf of the lawsuit filed last July by SFLPA-E, on the action by the House.

 

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When we make a mistake in our attempts to keep you informed about your state government and its elected officials, we make it a point to make amends as quickly and as accurately as possible in order to be fair to all concerned.

With that in mind, we owe a sincere apology for inadvertently misrepresenting the amount of campaign contributions received by certain legislators in our Wednesday post about the House Natural Resources Committee Chairman Rep. Gordon Dove (R-Houma), State Sen. Robert Adley (R-Benton) and Sen. Bret Allain (R-Franklin).

You may remember that we said that Adley had received $70,500 in campaign contributions from oil and gas interests and that Dove and Allain received $10,500 and $6,800, respectively.

We were incorrect and in fairness to them, we want to give the correct figures here and now:

  • Sen. Robert Adley: $597,950;
  • Sen. Bret Allain: $34,139;
  • Rep. Gordon Dove: $28,950.

There, now. We certainly feel better for having cleared the air and we hope the honorable legislators will forgive us our error.

We do not have a revised amount of oil and gas-related campaign contributions for Gov. Bobby Jindal, but we have confirmed that it is at least $545,000, most probably more. A lot more.

If there are any lingering doubts out there that politicians are bought and sold by the special interests like so many sacks of potatoes, consider the money that has been spread among our state lawmakers—just from the oil and gas interests:

  • The 144 incumbent legislators (remember, this does not include those who have left office) have received more than $5.8 million in campaign contributions by a single special interest group—oil and gas. That comes to an average of $40,357 per legislator.
  • For the 39 current members of the Louisiana Senate, the aggregate is a little north of $2.8 million, or $51,100 each.
  • A total of $2.99 million was distributed among the 105 House members—an average of $28, 458 each, the figures show.

So, the obvious question is: what do the oil and gas interests expect in return—other than the continuation of the same good, clean government to which we have grown so accustomed in Louisiana?

How about the dismissal of a pesky lawsuit that could result in the 97 oil companies having to spend some of their hard-earned profits to clean up and restore the state’s wetlands that they have destroyed over decades of misuse and abuse.

Just think what a bummer it would be if ExxonMobil had to dip into that $8.35 billion in net profits it earned during the last quarter of 2013. Same for Shell, with its $2.9 billion in net profits for the final quarter of last year. I mean, c’mon, you have to feel some sympathy for ExxonMobil CEO Rex Tillerson who only makes $2.72 million per year—in salary, that is. An adverse court decision could impact his annual bonus of $3.7 million (plus 225,000 shares of restricted stock worth another $21.3 million). That’s $27.7 million in 2013 alone. http://www.foxbusiness.com/industries/2014/04/11/exxon-ceo-2013-compensation-falls-278519336/

So, by obtaining a dismissal of litigation—before it ever goes to trial or even to the discovery stage—that could conceivably cost oil companies several hundred million dollars by spreading $5.8 million around represents a nice return on investment.

And make no mistake about it: campaign contributions are just that—investments. Nothing more, nothing less. More specifically, they are investments not in good government, but in business. And politics is a business—a very dirty business.

Politics long ago, even before the repugnant Citizens United U.S. Supreme Court decision of 2010, took the citizens of this country and this state out of the equation, eliminated us from the decision-making process on issues that clearly affect our lives each and every day.

And if you still believe our government is of the people, by the people and for the people, then you are either wonderfully naïve or pitifully delusional.

Not all the political back scratching, vote buying and deal making takes place in Washington. With far too few exceptions, it’s as close as our nearest state senator, state representative Board of Elementary and Secondary Education member and yes, even our governor. Especially our governor, the one who supposedly sets the moral tone for all other elected officials.

And the investments of the oil and gas interests in lawmakers who are supposed to be representing the interests of the state and its citizens are only indicative of a much larger problem, a problem that undermines the trust in the entire body politic, in the political process itself.

Can it be an accident that the seven members of the Senate Natural Resources Committee received an average of $62,902 each from oil interests—$11,785 more than the average for the 32 senators not assigned to that committee?

Do you think it a coincidence that the 19 members of the House Committee on Natural Resources and Environment received an average of $31,670—again, $3,200 more than the average for the remaining House membership?

Oil and gas contributions for the Senate committee members totaled $462,150 and for the House committee members, $394,150—a grand total of $856,300.

And then there is the seven-member Senate Committee on Environmental Quality, chaired by Sen. Mike Walsworth, or as one blogger refers to him, Walsworthless, (R-West Monroe), whose $46,775 was eclipsed by fellow committee member Sen. Dale Erdy (R-Livingston), who raked in $118,400 in donations from oil and gas.

In all, seven senators, including Adley, Gerald Long (R-Natchitoches) and Senate President John Alario (R-Westwego), received in excess of $100,000 from oil and gas interests. Alario, the poster child for using campaign funds for private purposes, received $124,400. That’s a lot of Saints and LSU football tickets and, with his expensive eating habits, a couple of gourmet meals at one of New Orleans’ finer restaurants.

Over on the House side, only one member received more than $100,000. But that just happened to be House Speaker Chuck Kleckley (R-Lake Charles). How’s that for strategic placement of your money?

And then there is Sen. Elbert Guillory (R/D/R-Opelousas) the carpetbagger from Seattle who is an announced candidate for lieutenant governor. Guillory seems to pop up anywhere there are contributions to be had. A member of the Senate Judiciary C Committee, he managed to pull in $130,400, second only to Adley’s $597,950.

These are just some of the highlights of the data we received, courtesy of Moss Robeson of Brooklyn, N.Y., whom we would like to thank for conducting a more thorough data search and for crunching the numbers for us. Working as an intern on behalf of John Barry and the Southeast Louisiana Flood Protection Authority-East (SFLPA-E), he not only ran the numbers on the Senate and members of the House Committee on Natural Resources, he ran them for every member of the entire legislature.

After all, if Gov. Jindal can continue pulling in talent from out of state, then why not bring Ross in for this project—especially since his mom resides in New Orleans?

For the complete list compiled by Robeson, click here: Copy of Campaign Contributions

Here is the way the full House voted on SB 469 on Thursday:

YEAS:

Alario

Adams

Arnold

Barras

Berthelot

Billiot

Bishop, S.

Broadwater

Burford

Burns, H.

Burns, T.

Burrell

Carmody

Carter

Champagne

Chaney

Cromer

Danahay

Dove

Fannin

Garofalo

Geymann

Gisclair

Guinn

Harris

Harrison

Havard

Henry

Hensgens

Hodges

Hoffmann

Honore

Howard

Ivey

Jones

Landry, N.

Leopold

Lorusso

Mack

Miller

Morris, Jay

Morris, Jim

Ponti

Pope

Price

Pugh

Pylant

Reynolds

Richard

Robideaux

Schexnayder

Schroder

Seabaugh

Simon

Stokes

Thibaut

Thierry

Thompson

Whitney

Total — 59

 

NAYS

Anders

Armes

Badon

Barrow

Bishop, W.

Brown

Connick

Cox

Dixon

Edwards

Foil

Franklin

Greene

Guillory

Hazel

Hill

Hunter

Jackson

James

Jefferson

Johnson

Lambert

Landry, T.

LeBas

Leger

Lopinto

Montoucet

Moreno

Norton

Ortego

Pearson

Pierre

Ritchie

Shadoin

Smith

Williams, A.

Williams, P.

Willmott

Woodruff

Total – 39

 

ABSENT

Abramson

Gaines

Hollis

Huval

St. Germain

Talbot

Total — 6

 

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“We’ve really done a lot…thanks to CPRA (the Louisiana Coastal Protection and Restoration Authority).”

—House Committee on Natural Resources Chairman Rep. Gordon Dove (R-Houma), who also is a member of the CPRA, commenting prior to his vote in favor of an amendment to SB 469 which would make the prohibition against suing oil companies for damages to the state’s wetlands retroactive to include the year-old lawsuit against 97 oil companies by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E). (While he was busy patting himself on the back for his accomplishments in protecting Louisiana’s wetlands, one of his trucking companies was being cited by the State of Montana for dumping radioactive waste in that state.)

 

“This bill  is a 110 percent get out of jail free card.”

—SLFPA-E attorney Gladstone Jones, offering his opinion of SB 469 during Sunday’s committee hearing.

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