‘Spillionaires’ are the new rich after BP oil spill payouts

By Kim Barker

The Washington Post

The oil spill that was once expected to bring economic ruin to the Gulf Coast appears to have delivered something entirely different: a gusher of money.

So many people cashed in that they earned nicknames: “spillionaires” or “BP rich.” Others hurt by the spill wound up getting comparatively little. In the end, BP’s attempt to make things right — spending more than $16 billion so far, mostly on damage claims and cleanup — created new divisions and even new wrongs.

Some of the inequities arose from the chaos that followed the April 20 spill. But in at least one corner of Louisiana, the dramatic differences can be traced in part to local powerbrokers.

To show how the money flowed, ProPublica interviewed people who worked on the spill and examined records for St. Bernard Parish, a coastal community about five miles southeast of downtown New Orleans.

Those documents show that companies with ties to parish insiders got lucrative contracts and then charged BP for every possible expense. The prime cleanup company submitted bills with little or no documentation. A subcontractor billed BP $15,400 per month to rent a generator that usually cost $1,500 a month. Another company charged BP more than a $1 million a month for land it had been renting for less than $1,700 a month. Assignments for individual fishermen also fell under the control of political leaders.

“This parish raped BP,” said Wayne Landry, the chairman of the St. Bernard Parish Council, referring to the conduct of its political leadership. “At the end of the day, it really just frustrates me. I’m an elected official. I have guilt by association.”

Spill Resulted In Economic Benefits

The economic benefits rippled throughout the gulf. In the six months after the spill, sales tax receipts, a key measure of economic activity, rose significantly in eight of the 24 most affected communities from Louisiana to Florida. Only one community, in Mississippi, saw its receipts dip significantly.

Sales tax collections from Louisiana’s Plaquemines Parish rose more than 71 percent. And St. Bernard saw a bigger jump than anywhere. The parish collected almost $26.8 million in sales and lodging tax receipts in the six months after the spill, almost twice as much as over the same period in 2009. Flush with cash from cleanup and claims, many fishermen bought new boats and trucks. Sales at the nearest Chevrolet dealer rose 41 percent.

Just days into the crisis, St. Bernard’s parish president, Craig Taffaro Jr., invoked a Louisiana law to declare a 30-day emergency and handle the crisis without most normal government checks and balances. He chose the prime contractor that supervised the cleanup. He and people close to him decided which fishermen would be hired to put out boom and search for oil.

In some ways, parish residents seemed to view the disaster and BP’s culpability as a way to recover from earlier blows. St. Bernard bore the brunt of Hurricane Katrina, which flooded almost every home in August 2005. Population dropped almost in half, from about 67,000 in 2000 to about 36,000 in 2010, largely because people didn’t come back after Katrina and the hurricanes that followed. Before the spill, the parish slashed its budget by 11 percent, cutting garbage collection, the fire department and mosquito control. There was just no money.

The spill changed that. Fisherman were paid to lay out protective boom to try to corral the oil. Contractors were hired to manage the cleanup and provide security. Claims money began flowing to people who said their lives had been upended by the crisis.

Parish Government Benefited

The parish government was among the first to benefit, snagging a $1 million check for oil-spill expenses. Parish employees went shopping for cameras, printers, a file cabinet, staplers and 712 shirts emblazoned with the parish name. Taffaro and other officials said the parish shouldn’t have to spend its own resources to respond to the spill. The shirts were necessary to identify employees at the cleanup site, they said.

Some of the money also went to overtime pay for more than 40 parish employees, including three who claimed overtime for picking up dog food for the animal shelter. St. Bernard’s homeland security director, David Dysart, a salaried employee, got almost $23,000 for working 497 hours of overtime in less than seven weeks, a fact first reported by the New Orleans Times-Picayune. Dysart did not respond to a query about his overtime.

As the money flowed, complaints spread. Subcontractors said those at the top of the cleanup creamed off money, while those at the bottom earned much less for doing the actual work.

BP provided only limited information to ProPublica. The federal government ceded control of cleanup spending to BP, and the U.S. Coast Guard, the federal agency most involved with overseeing BP’s response, said BP was spending whatever was required to clean up the spill.

Taffaro and other St. Bernard officials also refused to respond to public-records requests ProPublica began filing in November. When asked again last week why the parish hadn’t provided any records, Dysart said he would be happy to help, but that filling the request would take time and cost a lot of money.

“I’m in the process of really, truly trying to assist you,” said Dysart, who is also the parish’s interim chief administrative officer.

In response to questions submitted by ProPublica in March, Taffaro said through his spokeswoman that he can approve overtime for salaried employees in extenuating circumstances and that Dysart eventually decided to stop taking overtime. Taffaro said that paying overtime for picking up dog food was necessary because the spill had caused fishermen to abandon their dogs.