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As analysts say oil disaster, “could break BP,” company hires Dick Cheneys press secretary

By Joe Romm on June 1, 2010 at 3:30 pm

"As analysts say oil disaster, “could break BP,” company hires Dick Cheneys press secretary"

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“This situation [has] got the real smell of death…. we expect that it could become a takeover target.”

BREAKING: CNN reports that “U.S. Attorney General Eric Holder says he has launched a criminal investigation into the Gulf of Mexico oil spill.”

You just can’t make this stuff up.  In the dumbest PR move since Tiger Woods (temporarily) hired “Ari Fleischer, the much-maligned former Bush Administration press secretary,” to try to reconstruct his image, “BP has hired a former top aide for Vice President Dick Cheney to be their new spokeswoman,” Think Progress reports.

The reckless oil giant is in big trouble, and deservedly so.  The Financial Times reports, “BP’s shares suffered their worst one-day fall for 18 years on Tuesday,” a 13% drop — to a total drop since the disaster of 31%, a loss of nearly $70 billion in market share.  At the same time, “Market measures of the risk that BP will default on its debts also rose sharply.”

AFP quotes Dougie Youngson, an oil analyst at Arbuthnot, with this blunt assessment about where BP is now:

“This situation has now gone far beyond concerns of BP’s chief executive Tony Hayward being fired, or shareholder dividend payouts being cut — it’s got the real smell of death. This could break BP,” said Youngson.

“Given the collapse in the share price and the potential for it to fall further, we expect that it could become a takeover target – particularly if its operating position in the US becomes untenable.”

So what does a company that is starting to make Goldman Sachs seem like Ben & Jerry’s do to restore its hemorrhaging image?  Why, it hires someone who’s an expert in working with people with single-digit popularity, as TP reports:

Under threat of receivership and criminal investigation for its destruction of the Gulf of Mexico, foreign oil giant BP has hired a former top aide for Vice President Dick Cheney to be their new spokeswoman.  Anne Womack-Kolton has been hired to be “head of U.S. media relations.” A rising star in the Bush-Cheney White House since the 2000 campaign, Womack-Kolton served as Cheney’s press secretary during the 2004 election before running public affairs in the Bush Department of Energy:

Anne Womack-Kolton“Back in 2001-02 Anne Womack-Kolton defended Cheney’s secret energy task force,” Daily Kos contributor RL Miller writes. Cheney’s energy group met with several BP representatives, including a private meeting between Cheney and BP CEO John Browne. In 2007 Browne retired from BP “after lying to a court about his relationship with another man.”

With its stock spiralling, BP hired her away from the Brunswick Group, the international communications and crisis management firm which BP has been paying to “craft its public response to the spill.” Womack-Kolton joined the Brunswick Group in 2007 to manage “high stakes communications surrounding public affairs issues and political risk management for domestic and global corporate clients.”

Memo to disgraced people and companies:  Bush and Cheney do not have positive public images, so why would you hire their former PR people?

Doesn’t BP realize that Cheney never actually cared about his public image.  Then again, maybe Kolton is a perfect fit for the millionaire who whined “I’d like my life back” and “What the hell did we do to deserve this?”

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28 Responses to As analysts say oil disaster, “could break BP,” company hires Dick Cheneys press secretary

  1. cervantes says:

    Just shows that they live in their own, hermetically sealed world. Of course Dick Cheney’s flack is the go-to person, because Dick Cheney is king of their universe. They have no concept of how the rest of the world sees them, or more precisely, they don’t really care.

  2. Just wonderin' says:

    Doesn’t Apco Worldwide has some sort of link to the denial lobby? Tobacco, climate change etc..?

    “Why would you hire their former PR people?”

    Because they are really good at fooling folks…

  3. mike roddy says:

    This hiring is perfect. It’s about like filling out the invitations for a swinger’s party from the AIDS ward.

    How in the hell did BP ever make any money?

  4. Karen S. says:

    Great! I can hardly wait for this version of Clear Lies, Healthy Blowouts and No Dollar Left Behind.

  5. catman306 says:

    BP has a weapon of mass destruction… Call a Cheney aid for further instructions quick!

    The Oracle on May 31, 2010 at 11:29 PM posted at Political Animal and suggests that the US nationalize the oil beneath the Horizon and use every cent of profit from this oil lease to help repair and replace what is being lost, and surely will soon be lost, in the Gulf of Mexico.

    http://www2.washingtonmonthly.com/mt/mt-comments.cgi?entry_id=24045

    What else can you do When Oil Corporations Go Wild? No Spring Break this year! Revolting video, graphic pictures and lurid verbal descriptions available all over the net! Disgusting, but you can’t look away. Bring on the spokesperson!

  6. David Smith says:

    I am probably a little extreme in some of my views, but I think that a company that creates the kind of distruction that we are witnessing should be put out of business and have its assets destroyed. Others should not benefit from this. It should be a total loss for the company and the investors.

    Or maybe the assets should be used to actually repair the damage done. An actual reconstruction would probably cost hundreds of billions of dollars. If you wreck someones car you have to pay to restore it to its original condition. I dont know why a different standard would be applied in the case of BP and the Gulf situation.

  7. Karen S. says:

    Kolton’s expertise included overseeing quiet, untraceable orders to federal agencies to call the Arctic National Wildlife Refuge “ANWR” because the name sounded Egyptian. No kidding. Industrializing a wildlife refuge might offend, but drilling something called ANWR might make people feel vaguely good.

  8. Doug Bostrom says:

    David Smith says: June 1, 2010 at 5:00 pm

    I am probably a little extreme in some of my views, but I think that a company that creates the kind of distruction that we are witnessing should be put out of business and have its assets destroyed.

    Extreme? Maybe, but history shows us the only threat corporations are ultimately responsive to are those which remove the possibility of profit. Even prison terms for executives are insufficient; there’s an infinite supply of replacement executives waiting to fill shoes left in the personal effects lockers of jails.

  9. The crash of BP stock is something that I’ll bet the Obama White House has anticipated–and it isn’t without consequences. It’s a massive headache with financial and global economic consequences, no matter what happens now. It’s too big to fail without causing a lot of trouble for innocent people. But the writing is on the wall today. Stock is down, liability is massive, and now they face multiple criminal prosecutions. BP is probably toast.

    But however righteous we’d like to be, the possible and even likely collapse of BP as a corporation will eventually mean a costly process that will likely result in the return of BP basically, but under another name. A global corporation bigger than a lot of countries simply doesn’t die.

  10. Chris Dudley says:

    Market Place just suggested a government takeover of BP. Also on NPR, news that the top of the well may be in poor shape so they don’t want to try capping it again for that reason. Discussions here about sealing it from the bottom up using dense material might still work….

  11. Rick Covert says:

    Dear Mr Hayward,

    How’s that Cheney press secretary working out for you?

  12. catman306 says:

    Robert Reich has a petroleum industry friend with some good ideas.

    Closing the Hole in the Gulf: A Petroleum Engineer Responds

    http://robertreich.org/post/654549994/closing-the-hole-in-the-gulf-a-petroleum-engineer

  13. Lore says:

    “Moria! Moria! Wonder of the Northern world! Too deep we delved there, and woke the nameless fear.”

  14. Chris Dudley says:

    Lore #12,

    BP’s Bane they call it. And only by suffering great harm could GoodGulf destroy it.

  15. I could say, “I told you so.”

  16. Lore says:

    Chris Dudley #14

    Of course and along with the help of Arrowroot, Gimlet and Legolam! Oh, and Frito Bugger, Spam Gangree, Moxie and Pepsi too.

  17. Just wonderin' says:

    Captain Future said –

    “It’s too big to fail without causing a lot of trouble for innocent people…But however righteous we’d like to be, the possible and even likely collapse of BP as a corporation will eventually mean a costly process that will likely result in the return of BP basically, but under another name.”

    As much as we would like to see the company go away – if the stock drops and becomes a takeover target – chopped up to be picked up by competitors – who will be liable? Sadly – we need them around making enough money to pay out the losses in the Gulf states for the upcoming decades of pending litigation …otherwise this will fall on the American taxpayer who will pay to clean this up long after BP is gone.

    And don’t forget the thousands of employees that exist in the US and around the world, the pension fund holders in the UK of which BP has a significant chunk of the pie – who trusted that the company acted responsibly. BP going down is not a good thing – there will be a cost to many innocent people.

    The officers of the company should be charged but the company needs to continue to operate – under an appropriate regime of regulation and enforcement.

  18. Chris Dudley says:

    Lore #16,

    Yes I’m so bored of these O-rings. Disaster after disaster. It’s always the same. Some ring causes all the trouble.

  19. mike roddy says:

    In the bigger picture, nobody should care if BP goes flat busted, since they obviously deserve it. Pension funds probably hold Massey and Peabody stock, too, but these funds tend to be diversified, and individuals will be only marginally affected. Events like this will result in reduced assets and access to capital by fossil fuel firms, which is a much needed development.

    The only issue worth considering is whether BP can pay the costs of the Gulf eruption. As of now, that can be done with existing cash and assets. If the company bk’s, and the pieces are picked up by competitors, that will be an important market signal, and could filter into areas like tar sands and mountaintop removal operations.

  20. John McCormick says:

    Mike, assume BP collapses in June. There are months of very costly work yet to be done. Who will pay in July, August, etc? We tax payers will because POTUS is going to assume the whole operation.

    John McCormick

  21. John Kazer says:

    I think there is an over-reaction going on here.

    The impact on UK (and other) pensions will be potentially huge – 15% of pension income in the UK is in some way dependent upon BP dividends.

    The idea of government buy-out is laughable – the company is vast, how much money do you think the UK has to throw around?

    I think the legal proceedings will be interesting, as they will disentangle the contractual obligations involved – BP may not be as “dirty” as many seem to presume (reputation staining is a different issue).

    Finally, read this: http://www.guardian.co.uk/world/2010/may/30/oil-spills-nigeria-niger-delta-shell

    Environmental disaster on your doorstep is grim, but you are by no means alone.

  22. re: #19

    Mike Roddy’s comment says it all:

    “The only issue worth considering is whether BP can pay the costs of the Gulf eruption. As of now, that can be done with existing cash and assets. If the company bk’s, and the pieces are picked up by competitors, that will be an important market signal, and could filter into areas like tar sands and mountaintop removal operations.”

    Since we live in a “democracy” controlled by corporations who are only motivated to change their behaviors by very STRONG and SUSTAINED market signals, then it would be best for this current crisis to motivate Congress to change the laws and make these extraction companies pay for the real costs of extraction which would then include damage to the environment.

    There is also louder talk of removing their tax subsidies, which are a form of legal theft of the U.S. taxpayers’ money.

    Only when these things are accomplished will pension fund managers get out of these stocks and into new engines of growth — and everyone knows that these new engines will be the clean energy companies.

  23. catman306 says:

    Robert Reich has questions and answers about taking temporary control of BP so that they do the right thing for America.
    Yes, we can!
    http://robertreich.org/post/655678383/putting-bp-under-temporary-receivership-some-qs-and-as

  24. I do not believe that BP is on the point of bankruptcy — they have enormous cash flows. They will remain profitable. The problem is the price of the stock. They don’t live on their stock price — they are not out there selling their shares in order to bring in cash. But, if the stock price becomes unusually depressed, then BP becomes quite vulnerable to being bought out by another oil company.

    Would another oil company like to buy BP and take on its current problem?

    Apparently, these oil companies make so much money that the cleanup costs may still be a minor matter to them in the long run.

    Grabbing BP’s existing wells is much better for other oil companies than drilling new ones.

  25. mark says:

    “Tenney Naumer says:
    June 2, 2010 at 8:09 am
    I do not believe that BP is on the point of bankruptcy — they have enormous cash flows. They will remain profitable”

    no kidding.

    It’s not even two weeks ago, that the talk was that the cost of this was peanuts for B.P. just a few days or a week or two of profit.

    Suddenly, an analyst says B.P. is finished, and that’s all it takes, in the wacky world of the stock market.

    I do not believe that we lowly outsiders have the faintest clue what goes inside the world of wall street stock trading. Think Bernard Maddoff.

    However, we do know that The people operating B.P. have a legal obligation to it’s shareholders, to do everything they can, to maximize profit.

    And that means paying as little as possible out for this disaster. downplaying every bit of damage, and rejecting every causal link to the oil pollution.

    That’s why workers were said to be poisoned by the food, not as a result of the cleanup hazards.

    this will be the pattern.

    If it’s possible, it should be nationalized now.

  26. prokaryote says:

    Worse may be to come. One industry insider, who asked not to be named, said: “Major spills are likely to increase in the coming years as the industry strives to extract oil from increasingly remote and difficult terrains. Future supplies will be offshore, deeper and harder to work. When things go wrong, it will be harder to respond.”

    Judith Kimerling, a professor of law and policy at the City University of New York and author of Amazon Crude, a book about oil development in Ecuador, said: “Spills, leaks and deliberate discharges are happening in oilfields all over the world and very few people seem to care.”

    There is an overwhelming sense that the big oil companies act as if they are beyond the law. Bassey said: “What we conclude from the Gulf of Mexico pollution incident is that the oil companies are out of control.

    “It is clear that BP has been blocking progressive legislation, both in the US and here. In Nigeria, they have been living above the law. They are now clearly a danger to the planet. The dangers of this happening again and again are high. They must be taken to the international court of justice.”
    http://www.guardian.co.uk/world/2010/may/30/oil-spills-nigeria-niger-delta-shell

  27. David Smith says:

    #21 John Kazer – Its possible that those who have invested in this industry (which is highly prone to corruption) and have profited from that investment are libel as well for the destruction caused and the lives lost. Apparently, in the industry everyone knows that there are risks. When the risks pan out everyone tries to bail meaning, if our investment decisions were bad and I can get the government to take up the slack great. No company is too big to fail. This concept is mostly from opportunism for those who have the most to lose.

    Big oil will fail in the next 50 years. Guaranteed. The smart money is on new technologies that will replace oil.

    We all thought the planet was too big to fail. It seems we may be proven wrong on this count as well.

  28. Chris Dudley says:

    BP’s credit rating has been cut: http://www.nytimes.com/reuters/2010/06/03/business/business-us-bp-fitch.html

    BP’s liability could be as high as $37 billion.