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Pirates of the Gulf Coast 

Jeremy Alford on how Louisiana has spent -- and misspent -- its oil-gotten gains

click to enlarge Gov. Bobby Jindal coaxed $360 million out of BP last year to build 10 miles of sand berms that were supposed to protect the Louisiana coastline from oil, such as this one near the Chandeleur Islands. - COURTESY THE LOUSISANA COASTAL PROTECTION AND RESTORATION AUTHORITY
  • Courtesy the Lousisana Coastal Protection and Restoration Authority
  • Gov. Bobby Jindal coaxed $360 million out of BP last year to build 10 miles of sand berms that were supposed to protect the Louisiana coastline from oil, such as this one near the Chandeleur Islands.

If nothing else, you know you're going to wait when visiting the Bank of BP. That's why there are hard plastic chairs lined up on the grassy area out front. This morning, they're wet with the morning dew of eastern New Orleans. Not very inviting. Then again, many coastal residents have been dealing with cases of red ass for more than a year now; a little bit of wet ass is something they can endure.

  The chairs are here for the overflow, those folks who can't fit inside the Gulf Coast Claims Facility (GCCF) off Chef Menteur Highway. The huddled masses come here yearning to breathe free — quite literally for those with health concerns connected to the disaster — and in hopes of being made whole financially. This facility is the public face of BP. Aesthetically, it's no prettier than BP's reputation in south Louisiana.

  Sylvia Gonzales of Hammond, an unemployed shrimp packer, whispers in Spanish to her friend, Ofelia Herrera, while glancing over at the chairs. Gonzales has seen the chairs during previous visits, when she learned to bring her own translator — today, Herrera — rather than relying on the GCCF to have someone at the ready.

  Like everyone else who passes through the claims process, she has a story. Herrera asks Gonzales a question in Spanish: "Is the GCCF going to give you any money for the seven months you've been unemployed?" Gonzales shakes her head, then huffs and puffs in a manner that can only be interpreted, despite the language barrier, as pissed off. "They told her yesterday that she might get about $1,000," Herrera says.

  Gonzales interjects one more sentence, which her friend translates quickly without breaking eye contact: "So I don't want to ask them no more."

  But don't get the wrong idea. The GCCF doesn't discriminate on the basis of ethnicity or class. Just ask Tommy Cvitanovich, a restaurateur and community booster who provided some 80,000 free meals in the wake of Hurricane Katrina. From his family-owned Drago's Restaurant in Metairie, he too feels the frustration.

  Cvitanovich stands behind the grill overseeing the dish he invented, the charbroiled oyster. Flames shoot into the air as a garlic butter sauce is spooned onto the half-shells. Watching one of his cooks grab a handful of grated cheese and toss it into the fire-soaked oysters is like seeing a monsignor perform a sacred ritual in St. Louis Cathedral.

  You would think a man like Cvitanovich could get the gears moving. His second restaurant, in the Hilton New Orleans Riverside Hotel, is among the highest-grossing in the Hilton chain. He recently won The Times-Picayune's "Loving Cup" award, given annually to an outstanding public citizen. His oil-related losses are obvious — and documented. Most of his customers come in looking for one item: charbroiled oysters. And oysters were hard to come by after last year's disaster.

  Cvitanovich says he came close to losing half of his anticipated 2010 revenues as a result of the disaster. And while oyster farmers are allowed to file claims that take into account future losses — oyster beds need three or four years to rebuild — Cvitanovich can't seem to get the same treatment for his oyster-based business. "It's a touchy situation. They gave us a final offer just recently, which we are in the process of contesting," he says. "We think it should be much higher than that."

  While people like Gonzales and Cvitanovich were trying to figure out their own fates two weeks ago, BP executives sent a letter to the GCCF arguing that future loss claims should no longer be paid due to the "positive economic performance" of the Gulf Coast.

  The GCCF was created in August of last year and it still has a long way to go. At last count, the facility has received approximately 857,000 claims from more than 500,000 individuals and businesses. So far, in excess of 300,000 claims have been approved, of which more than 150,000 are actually settled. The total payout is quickly approaching $5 billion. BP initially put up $20 billion to bankroll the GCCF — and spent millions in slick TV ads touting its alleged generosity and commitment to "making things right."

click to enlarge In June 2010, Gov. Bobby Jindal and Plaquemines Parish president, BIlly Nungesser met with other elected officials and representatives of the seafood industry at the Acme Oyster House in the French Quarter. Among the attendees was Tommy Cvitanovich, owner of Drago's Restaurant. Today Cvitanovich says he lost about half his 2010 revenue to the oil disaster. - COURTESY LOUISIANA GOVERNOR'S OFFICE
  • Courtesy Louisiana Governor's Office
  • In June 2010, Gov. Bobby Jindal and Plaquemines Parish president, BIlly Nungesser met with other elected officials and representatives of the seafood industry at the Acme Oyster House in the French Quarter. Among the attendees was Tommy Cvitanovich, owner of Drago's Restaurant. Today Cvitanovich says he lost about half his 2010 revenue to the oil disaster.

  That was last year.

  Today, BP's line goes something like this: "Multiple lines of evidence demonstrate that, to the extent portions of the Gulf economy were impacted by the spill, the Gulf economy has recovered, and there is not a basis for continuing to pay a future factor to account for the risk of future loss."

  That's from the letter sent to GCCF officials two weeks ago.

  GCCF administrator Kenneth Feinberg, whose firm receives $1.25 million per month to administer BP's fund, says the letter and its arguments will be "considered." As for how long that might take, it's anyone's guess. The GCCF just got around to appointing appeals judges last month, after starting the process in March. The timeline creates an unmistakable and jarring silhouette against the actual date this all started: April 20, 2010.

As folks on the ground and along the coast prepare to get shafted — again — elected officials continue to do what they've done from the beginning: look for deep pockets. There's no shame in that, as long as it's done for the benefit of communities and constituents.

  Then there's Gov. Bobby Jindal, a darling of national Republicans and the governor of a state where public opinion places BP on even footing with The Prince of Darkness. Despite BP's horrific environmental record and the damage it recently inflicted on Louisiana, Jindal attended a campaign fundraiser hosted for him by Mike Worley of Hammond in late March. Worley is the CEO of Worley Catastrophe Response, the company selected by BP to process claims related to last year's oil disaster.

  Worley Catastrophe also has a $380,000 consulting agreement with the Division of Administration, which makes it a state contractor. The governor has been unapologetic about his relationship with Worley, and his staff openly admits that money and support is accepted from all who offer it. "I'm running for re-election," Jindal says. "I'm not taking anything for granted."

  According to Jindal's most recent campaign finance report covering the first quarter of this year, he not only went through with the controversial fundraiser, but he also accepted $15,000 from Worley on March 29. Louisiana campaign finance laws impose a $5,000 maximum in statewide elections, so Worley wrote one personal check and two others from business accounts. It's all perfectly legal ... in a Louisiana sort of way.

  Then there's the cash that was squeezed from BP by officials who were hoping to make a political splash early on. They had little choice. The huddled masses demanded action as crude poured from the Macondo well and coated the coastline. Still, it's healthy to question just how effective those early posts of money were.

  President Barack Obama leaned on BP to establish a $100 million fund to assist people who were working on the 33 deepwater rigs that were shuttered as a result of his drilling moratorium. BP selected the Baton Rouge Area Foundation to administer its Gulf Coast Restoration and Protection Foundation.

  The program, when launched almost exactly a year ago, was initially expected to draw upwards of 9,000 applicants. A few months later, however, only 220 had applied. A second round of grants was offered this past spring, but only 900 applicants surfaced. A large portion of those applications will likely be abandoned by people halfway through the process, says Mukul Verma, communications director for the foundation.

  "We expected it to be a very large pool of applicants," Verma says. "But as we started digging into the numbers, we realized most of the rig operators were keeping their workers on the rigs. They were too valuable to let go. What the rig workers were doing on the rigs were upgrading them and improving them and maintaining them."

  While the final numbers haven't been released, millions of dollars are expected to be left over. BP has contractually dedicated that money to the people of the Gulf Coast. What happens next is unknown.

  Even local dollars, directly under the control of government entities, are going underutilized. A recent public meeting at the St. Charles Parish Library is a prime example. It was hosted and promoted by the River Parishes Workforce Investment Board. Through a BP grant funneled down by the federal government, the local agency had received $1.3 million to train people impacted by the oil disaster for new careers.

  A handful of local elected officials attended the gathering, but potential program participants did not — except one man who wasn't sure if he was eligible or not. Jamie Coleman, director of the host entity, told officials that the event was nothing more than an "announcement." But the event had been advertised as a "town hall meeting" and promoted in flyers as a place to receive training on site.

  Coleman did his best to put people at ease. "Don't be discouraged because you don't see a room full of people," he said as he opened the meeting. "Our staff have been going out to churches, we've been going to neighborhoods and we'll continue to do that through the duration of the grant."

  The $1.3 million is intended to serve St. Charles, St. James and St. John the Baptist parishes. The money must be spent by December 2012. Coleman initially declined to grant an interview on the program, saying he was instructed not to provide information to the media by Johnny Riley, director of the Office of Workforce Development for the state. (In response, Riley says, "I don't know why he said that. He doesn't work for us.")

  Further research shows Coleman's agency gets to keep a 15 percent administrative fee, just slightly less than $200,000.

  Annie Harmon, coordinator for the River Parishes Workforce Investment Board, says any unspent money from the grant could be "reprogrammed." For now, local officials have to work doubly hard just to find impacted parties. "There's just not a lot of local traffic coming in and out of the door looking for services," she says.

  That seems to be a trend: government officials having to beat the bushes to find BP victims for free benefits. It stands in stark contrast to the lines of claimants at GCCF offices, where people's claims are routinely denied.

  St. John the Baptist Parish President Natalie Robottom says her office made extraordinary efforts to contact potential beneficiaries, even on a business by business scale. "We tried to reach out to them individually in addition to us putting our information on our website, at our council meetings and in the paper," she says. "However, it has been very slow because many of them have gone on to other things."

  St. Tammany Parish officials have hired an attorney and asked local chambers of commerce to identify people impacted by last year's disaster. "It's just to make sure we don't miss anybody, to make sure we go back through the parish and see if there's anybody who has not received payment who has made a request for payment for loss," says St. Tammany Parish President Kevin Davis.

click to enlarge Gulf Coast Claims Facility administrator Kenneth Feinberg has profited well from his work; his firm receives $1.25 million per month to oversee the BP claims process. - PHOTO BY SAMUEL WANTMAN
  • Photo by Samuel Wantman
  • Gulf Coast Claims Facility administrator Kenneth Feinberg has profited well from his work; his firm receives $1.25 million per month to oversee the BP claims process.

Government agencies, meanwhile, have hauled in millions for their official coffers, which raises the question of whether private citizens and businesses have to compete against government for BP's attention — and resources. Although it seems poised to walk away from the claims process, BP is still in the crosshairs of Congress and the judiciary. Here again, one cannot ignore the trail of dollars leading from BP to the government.

  According to an investigative story published in late March by the Associated Press, BP has paid state and local governments more than $754 million and has reimbursed the federal government an additional $694 million. In many instances, the "connection between the spill and the expenditures was remote, and lots of money wound up in cities and towns little touched by the goo that washed up on shore," the AP found in records requested from more than 150 communities and dozens of interviews.

  For example, the Louisiana Department of Wildlife and Fisheries spent $5 million on 22 boats with accompanying trawls, nets and hauling vehicles. Lafourche Parish President Charlotte Randolph billed BP for a new iPad.

  And then there's Florida's Okaloosa County, which somehow came up with the idea of throwing a party before New Orleans did. It shelled out $300,000 to Kenny Loggins, the Doobie Brothers and Lynyrd Skynyrd for a pair of rock shows to promote the state's oil-free beaches.

  BP has ponied up a separate pot of money, roughly $30 million, for Louisiana's lieutenant governor to promote tourism. Although New Orleans felt the brunt of the hospitality industry's woes after the disaster, that money is being spread amongst Louisiana's 64 parishes. This has some folks hopping mad.

  In Baton Rouge, officials are using $493,000 of their BP tourism dough to underwrite Bayou Country Fest in 2012. The all-star affair in Tiger Stadium, produced by New Orleans Jazz & Heritage Festival impresario Quint Davis, has proved popular, even if independent funding has been difficult to find.

  Plaquemines Parish President Billy Nungesser, among others, doesn't understand how that could happen. "If a train derailed in Shreveport, and the responsible company paid $50 million to restore tourism in Shreveport, Plaquemines Parish should not rightfully receive a dollar," he says. "It's absurd that the money is being spread around the state in an election year and not bulked together and spent wisely to bring back Louisiana seafood, fishing and tourism."

  Nungesser announced last month that he is running for lieutenant governor against incumbent Jay Dardenne, who says the BP tourism money was allocated before he took office in late 2010.

  Meanwhile, lawmakers on Capitol Hill hope to squeeze a few more billion out of BP for the Gulf's damaged ecosystem. It's a lengthy process, one that could take nearly two decades as the Natural Resources Damage Assessment (NRDA) process attempts to mitigate the ecological damages resulting from last year's disaster.

  The program requires polluters to pony up dollars for any messes they create. BP, which was the primary operator of the Macondo Well, has already put up $1 billion in seed money. It has been designated as follows:

  • $500 million will be split equally among the Gulf states affected by the disaster, including Louisiana, Mississippi, Alabama, Florida and Texas.

  • $200 million will go to the National Oceanic and Atmospheric Administration and the U.S. Department of Interior.

  • $300 million will be used to pay for state-sponsored restoration projects along the Gulf Coast.

  Louisiana has already received its $100 million share, and state officials have pre-approved restoration projects. A decision is expected later this summer as to which projects will be funded.

  In a recent interview, Chris Macaluso, spokesman for the Louisiana Wildlife Federation, says the pace that future NRDA dollars flow into the state is more important than where the first wave of dollars washes ashore. "That's a long-term process," he says. "That's something we could still be talking about 10 or 15 years from now, unfortunately, because of all the various processes and all the various organizations involved and the legal issues that stretch these things out."

  Getting around that long, drawn-out process was the central theme of a meeting late last month of the U.S. Senate's Environment and Public Works Subcommittee. GOP Sen. David Vitter, who participated in the hearing, says a clear message was delivered. "We absolutely need to figure out a way to speed up this NRDA process," Vitter says. "The idea that investing in restoration could take upwards of a decade is really unacceptable. We need to figure out how to get BP to more quickly sign off on assessments, review and funding."

  Vitter is sponsoring legislation that would do just that. His bill would force BP to pre-pay some of its expected federal penalties to bankroll NRDA efforts.

  Garret Graves, chairman of the Coastal Protection and Restoration Authority, testified during the subcommittee hearing late last month. He commended BP for putting up $1 billion in seed money but argued that much more is needed. He noted that BP's money is currently driving NRDA projects, since most of the reserve money normally used to underwrite the program has already been largely spent. That puts BP in control, he concludes.

  "I think that equation needs to be flipped over," Graves said. "I think the public should be in the driver's seat. By being able to control the checkbook, you can control what's in these work plans, how the NRDA assessments are conducted, the timelines of the NRDA assessment."

  Graves further suggested that BP has its own interests at heart and wouldn't necessarily give the same kind of urgency to coastal restoration projects as would the government. "BP at the same time has hired armies of attorneys, marketing firms, PR campaigns, lobbyists, scientists, consultants and other experts," he says. "And we have to compete with that."

click to enlarge Florida's Okaloosa County spent $300,000 of disaster relief money on an oceanside concert featuring the Doobie Brothers. The event was designed to promote the fact that the beaches there were nearly oil-free.
  • Florida's Okaloosa County spent $300,000 of disaster relief money on an oceanside concert featuring the Doobie Brothers. The event was designed to promote the fact that the beaches there were nearly oil-free.

  In addition to Vitter's bill, Vitter's Democratic counterpart Sen. Mary Landrieu has filed a bill that would dedicate at least 80 percent of BP's penalties paid under the Clean Water Act directly to Gulf states for ecosystem restoration.

Clearly, there's a lot of cash on the table. Years from now — or, one hopes, sooner — somebody is bound to ask, "Was it used effectively?"

  While the proposed legislation to speed up the NRDA process has legs, U.S. Rep. Bill Cassidy, R-Baton Rouge, says a forceful argument will be needed to steer billions more back home. "There is precedent in law where the offending company can make a down payment that can be used for projects that you know ultimately will be part of the mix," Cassidy says.

  But are enough people in Washington still paying attention, more than a year — and billions of BP dollars ­— later?

  "The delegation will have to really fight for it," Cassidy says. "The delegation and the Gulf Coast delegations are very aware of it. I'm not sure about the rest of Congress. There's a lot of things on our plate right now. I hope there will be sympathy toward the Gulf Coast states."

  From the beginning, the elected class declined to view BP's emergency cash infusions as public money. Coastal residents and the mainstream media, for the most part, went along. As a result, many top-dollar expenditures, even if initially questioned, never got the scrutiny that tax dollars get when they are spent in large amounts.

  Consider, for example, the $360 million Jindal forced out of BP last year for 10 miles of sand barriers, or berms, to keep oil from reaching the Louisiana coastline. The National Oil Spill Commission, which was appointed by Obama, reported that the berms barely captured any oil. Over the course of several months, Jindal morphed the initiative into the state's largest barrier island restoration project — a move that probably had as much to do with PR as policy. Coastal leaders cheered the idea and the berm boondoggle was forgotten.

  And when Jindal was chided for the berms' ineffectiveness, his minions pointed out that it was BP money, not tax dollars. But is that really the case? Doesn't the money become "public" when it changes hands, literally or figuratively, from BP to state government? Should it matter at all where the money came from, whether from taxes or a guilty energy giant? After all, doesn't government get all its money from the private sector?

  Oil spill commissioner Fran Ulmer says it's a sore spot. "You know, for the money, this doesn't look like a good choice," she says of Jindal's berms.

  Fellow oil spill commissioner Frances Beinecke agrees. "There may have been other values for the state for having those berms built — as you say, for storm barriers — but as for oil spill response, which is the only way we were looking at it, the cost-benefits didn't work out," she says.

  Donald Boesch, another oil spill commissioner, says he saw it all coming. "There were pundits and scientists who were quoted with exaggerated claims about the collapse of the entire Gulf ecosystem and so on," Boesch says. "Having studied the oil and gas industry and oil spills in particular, I knew better than that. And actually, the impact of the spill thus far on the environment was less than I even thought was likely."

  Still, today, media reports confuse Macondo, the name of the well, with the Deepwater Horizon, the name of the rig. Terry Hazen, a microbial ecologist at Lawrence Berkeley National Laboratory in California, says reporters also continue to make the mistake of comparing the Gulf disaster to Alaska's Exxon Valdez spill. "All oil spills are local just like all politics," he says. "It'll depend on the weather. It'll depend on the type of oil. It'll depend on the climate. It'll depend on whether there's hurricanes and a variety of other things."

  The best comparison, Hazen says, is the Ixtoc I spill, which occurred in 1979 in the western Gulf. It emptied 71,500 barrels of oil into the ocean, compared to BP's 5 billion barrels of crude. "That's the one you need to compare this to. Not to Exxon Valdez," Hazen says. "Because that (Valdez) was a completely different type of oil. Completely different environment. Completely different place."

  The biggest difference between the BP disaster and the Valdez spill, he adds, was that the Gulf incident resulted in the release of light crude, which has the viscosity of a motor oil and is much easier to degrade than heavy crude. "If it was heavy crude, more of it would have probably sunk into the sediment," he says. "It would have degraded much more slowly."

  But few things connected with the BP disaster are as they seem. Example: BP funded Hazen's research, which suggests an oil-eating microbe lives in the Gulf and is helping deplete the remainder of the oil.

So where does one get the straight dope on the BP disaster and its aftermath?

  Your best bet is to go where the oil meets the marsh. Consider, for example, the Cajun Crab Connection on the banks of Bayou Des Allemands. The company went from working with 10 boats each day before the disaster to about three today. On slow days, owner Casey LeBlanc keeps his workers busy breaking down boxes. Already, one secretary has decided to leave to receive training for another industry.

  In addition to the numerous problems he has had getting money out of the GCCF, LeBlanc also has to fight the perception that his seafood isn't safe. Buyers from Maryland used to knock down his door looking for Louisiana crabs. Now they post notices in their restaurants that they do not serve Gulf seafood.

  "They scared, you know, that the crab might have dispersant in them, or whatever," LeBlanc says, staring out at the bayou.

  He knows about the jobs that are available elsewhere, and he knows about the training offered by groups like the River Parishes Workforce Investment Board. But LeBlanc doesn't want to give up his traditional way of life. BP may want to tout a new career for him, but he's standing pat ... and hoping against hope that some of the state money will eventually make its way to his bayou.

  That's a recurring theme in the wake of major disasters along the coast. Too bad many in officialdom and most connected to BP don't understand.

  "This is what I know and this is where my heart is," says LeBlanc as he watches muddy water slap the bank at the Cajun Crab Connection. "I been living on this bayou my whole life. I'm not going nowhere."

Jeremy Alford is a freelance journalist based in Baton Rouge. You can reach him through his website, www.jeremyalford.com.

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