The companies at the center of the Gulf Coast oil spill are boosting their legal and lobbying firepower to help them through a growing backlash in Washington.
Wilmer Cutler Pickering Hale and Dorr’s Jamie Gorelick has been hired to lead a team for BP PLC. Jeffrey Turner, co-chair of Patton Boggs’ public policy practice, is representing Halliburton Co. John Beisner, a partner in Skadden, Arps, Slate, Meagher & Flom’s Washington office who specializes in mass tort defense, is working with Transocean Ltd. Williams & Connolly’s Emmet Flood is representing Cameron International Corp.
The hiring comes as Democrats consider lifting liability caps for oil spill disasters and as seven separate congressional committees have launched investigations. The spill could also change liability caps in maritime law, creating another opening for the plaintiffs’ bar which has already filed more than 100 cases.
For the companies, it means a two-front Washington campaign. On one front they must stay prepared as they are grilled by lawmakers and the administration. On the other, they hope to prevent a financially draining shift in public policy.
Meanwhile, the trial lawyers’ lobby is on the hunt for tales of fishermen and families left destitute by the spill. “Unfortunately, whenever you have a disaster of this magnitude, it refocuses attention to the problem with the underlying law,” said Susan Steinman, policy director for the American Association for Justice, the trial lawyers’ lobby. She said her group has “had a host of meetings with a lot of different offices” on Capitol Hill.
Michael Brien, a lobbyist for BP, said that the company’s “sole priority” is “managing the ongoing response and information needs” of Congress and those in coastal states affected by the spill. As for the liability legislation, he said, “that is not where we’re focusing our efforts at the moment. Our efforts are focused on responding to that incident and honoring our commitment to clean up and pay all legitimate claims.”
Senators insist they haven’t been meeting with industry lobbyists on liability legislation. But BP executives have certainly been on the Hill to talk with even outspoken backers of lifting liability caps.
And even if the companies aren’t directly lobbying on liability, their trade group certainly is. Cathy Landry, a spokeswoman for the American Petroleum Institute, said API has tried to answer lawmakers’ questions on everything from technical questions about offshore drilling to responsibility for the spill, while urging them to carefully consider any possible changes to liability laws. “We’re just asking that lawmakers… really look at the ramifications,” she said.
The best known of the lawyers hired by the companies is Gorelick, a former deputy attorney general during the Clinton administration. Gorelick has previously worked with BP America, registering as a lobbyist for the company in June 2007 to help with a House Energy and Commerce Committee inquiry. That work ended in February 2008, according to federal lobbying records. Gorelick also has a history of government work on energy matters: From 2000 to 2001, she served on a Department of Energy commission on science and security, and early in her career she worked as a lawyer in the Department of Energy.
Turner, who represents Halliburton, and Beisner, who has Transocean, have spent their careers in private practice. Turner became the head of Patton Boggs’ lobbying practice only recently, though he has experience on offshore drilling issues after representing an industry coalition on the issue. A decade ago, when Beisner was an O’Melveny & Myers partner, he represented Ford Motor Co. regarding defects in more than 60 million tires, and he was part of the legal team in 2007 for Merck & Co. in litigation over its prescription pain killer, Vioxx. Transocean has also brought in Rachel Clingman of Sutherland Asbill & Brennan’s Houston office as acting co-general counsel. She testified for the company at a May 27 congressional hearing.
Flood spent two years in President George W. Bush’s White House, starting in 2007 when the Democrats retook Congress and Bush needed to beef up his response to congressional oversight. He led the White House response when it became clear that the Bush administration wasn’t archiving many of its e-mails, and when Democratic lawmakers were looking at the administration’s contacts with corrupt lobbyist Jack Abramoff. When he left in January 2009, he had risen to deputy counsel, and he continued to represent Bush in negotiations with the House Judiciary Committee over subpoenaed testimony from former counsel Harriet Miers on the firing of nine U.S. attorneys.
The legal teams have already been busy: Five House and Senate committees held hearings last week, gathering testimony on liability legislation, the response of BP and the federal government, and the spill’s effects on business.
At a House Judiciary Committee hearing on May 27, James Ferguson, Halliburton’s deputy general counsel, and William Lemmer, Cameron’s general counsel, told lawmakers that it’s too early to determine who is at fault for the disaster. Darryl Willis, a BP vice president, wouldn’t budge when lawmakers tried to get him to define the company’s liabilities. “We’re going to respond to this in an effective manner, and we realize we’re going to be judged based on our response,” Willis said.
Rep. Sheila Jackson-Lee (D-Texas) reacted to the industry with frustration and highlighted the plight of Gulf Coast fishermen: “Why is there this constant refrain that it’s too early to determine liability when we have a whole industry that’s being destroyed?”
Some of the liability proposals discussed last week included revamping the Death on the High Seas Act, which limits survivors’ ability to sue, and the Limitation of Liability Act of 1851. That law says a vessel owner is liable only for the post-accident value of the vessel and cargo, except in cases of negligence. Transocean has cited the law in a court motion to limit its liability to $26.7 million. Sen. Sheldon Whitehouse (D-R.I.) introduced a bill earlier this month that would eliminate a cap on punitive damages in maritime cases that was imposed by a 2008 U.S. Supreme Court decision resulting from the Exxon Valdez disaster.
In one hearing last week, Associate Attorney General Thomas Perrelli said he’s confident the U.S. Justice Depart­ment could defend a law that retroactively changes the liability for companies involved in the spill. “Congress legislates retroactively all the time,” he said. But, he acknowledged, there would almost certainly be a fight in court.
LOBBYISTS AT THE READY
The companies’ lobbying ­resources vary widely. BP, which has a robust Washington presence, spent nearly $16 million lobbying the federal government last year. The company last week terminated its lobbying contract with Arnold & Porter. The firm won’t say why and the company didn’t respond to a request for comment, but lobbyists at Arnold & Porter said they were not working on issues related to the oil spill. Other firms on retainer include the Podesta Group, led by Democratic strategist Tony Podesta; the Duberstein Group, which includes former Reagan chief of staff Kenneth Duberstein; and a team of Alpine Group lobbyists that includes a former aide to Sen. Mary Landrieu (D-La.).
The company’s eight-lobbyist in-house team is headed by executive vice president David Nagel. Nagel, a longtime BP executive who also worked for the company in Algeria and Egypt, took over the Washington office last year.
Reports show no new hires for BP or Halliburton. Halliburton spokeswoman Teresa Wong said that “the main bulk of what we’re doing is continuing to cooperate with the investigation. We’re watching closely what others are saying and doing at hearings, and trying to follow this as it changes day by day.” She later said in an e-mail that the company has “numerous briefings and meetings at the request of committee staff and members.”
Jackson Lewis, the only outside firm currently registered to lobby for Halliburton, said the firm is not lobbying on issues related to the spill.
This month, Transocean hired Capitol Hill Consulting Group, a lobbying firm headed by former Rep. Bill Brewster (D-Okla.), a co-founder of the centrist Blue Dog Coalition who was also the first chairman of the Congressional Oil and Gas Forum. Brian Kennedy, a spokesman for Transocean, said that while he couldn’t provide a list of lawmakers contacted by the company, “you can very safely assume that the company is trying to be as responsive as possible to those committees and the members that sit on each that have been conducting inquiries into the accident.” As for the liability laws, including the one invoked by Transocean to limit its exposure, Kennedy said there is a “popular misconception” that the law is obscure and rarely used.
Cameron has no registered lobbyists and a spokeswoman for the company declined to comment.
But Cameron — along with BP and Halliburton — are members of API, which spent $1.26 million lobbying in the first quarter of this year. API hasn’t hired any new lobbying firms, but is working with a team from Ogilvy Government Relations led by Wayne Berman and with Prime Policy Group. An institute analysis of the consequences of raising the post-cleanup liability cap to $10 billion — one proposal under consideration — argues it would drive smaller firms out of the Gulf of Mexico. Existing law may need to be changed, institute spokeswoman Landry said, but “we need to find a way to do that while continuing to find a way to maintain the viability of the oil and gas industry.”
SPREADING FAST: A TIMELINE OF LITIGATION OVER THE GULF OF MEXICO OIL SPILL