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Next week, the Corporate Congress will continue pushing anti-consumer and anti-environmental measures. Lawmakers will try to shut down class-action lawsuits, which are key to holding corporations accountable for wrongdoing, and subvert the U.S. Environmental Protection Agency’s (EPA) sensible rule to limit emissions from existing power plants. And lawmakers will keep mulling over the aftereffects of the BP disaster. What they need to know: in part because of legislative inaction, a similar disaster could happen again.
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Here are more specifics about what’s coming up:

• At 3 p.m. Wednesday, April 29, the U.S. House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice will hold a hearing on H.R. 1927, the “Fairness in Class Action Litigation Act of 2015.” Actually, this measure is anything but fair, because it will make it harder for those injured by corporations or other wrongdoers to file class actions. The bill permits class-action certification only if each proposed class member “suffered an injury of the same type and extent as the injury of the named class representative or representatives.” The trouble is, those injured by a common corporate or other action do not typically have the “same” type and extent of injury. The same bank rip-off may have cost someone $50 and someone else $75. Two victims of a polluters’ toxic dumping may have different diseases. A dangerous car defect may have resulted in death for one victim and a head injury for another. The bill might be more accurately titled, the “No Class Action Litigation Act of 2015.”

• We told you a couple of weeks ago about efforts by the Corporate Congress to scuttle the EPA’s proposal to curb power plant emissions (called the “Clean Power Plan”). Lawmakers are still at it. A measure sponsored by U.S. Rep. Ed Whitfield (R-Ky.) would help states opt out of participating in the plan. The House of Representatives’ Subcommittee on Energy and Power, which Whitfield chairs, approved the bill this week. Next, it moves to the full Energy and Commerce Committee. We are told the committee could mark it up as soon as next week. This is a public interest attack because the EPA’s plan would be a great deal for consumers (PDF). The plan relies heavily on efficiency methods to reduce energy use, which means consumers would see their electricity bills shrink.

• The fifth anniversary of the beginning of the BP disaster was this past Monday, April 20. At 9:30 a.m. on Wednesday, April 29, the U.S. Senate Committee on Commerce, Science, and Transportation will hold a hearing titled, “Five Years After Deepwater Horizon: Improvements and Challenges in Prevention and Response.” The hearing comes at the request of U.S. Sen. Bill Nelson (D-Fla.) and will focus on lessons learned in the wake of the spill and the steps taken to make offshore oil and gas exploration safer. The answer is: not enough. The few new drilling rules issued since 2010 are insufficient. They help address the state of the industry five years ago, but not today – when companies are drilling deeper and expanding their operations. Here are five reasons a BP-scale disaster could happen again.

• At 10 a.m. Tuesday, April 28, the Senate Committee on Environment and Public Works will consider S. 544, the “Secret Science Reform Act of 2015.” This misleadingly named bill is based on a faulty premise and unfounded claims about studies of fine soot pollution conducted almost two decades ago, none of which have been proven despite lengthy congressional inquiries. The legislation would radically diminish the EPA’s ability to fulfill its mission. It would require the agency to ignore significant science when carrying out its statutory responsibilities to safeguard public health and the environment.

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There is not one good reason to break up the Bank of America, the Charlotte-based giant with $2.1 trillion worth of properties that include Merrill Lynch and Countrywide Financial.

There are many good reasons.

As a shareholder, I submitted a resolution for a vote at the annual meeting May 6 that calls for the board of directors to study the merits of a break-up. Public Citizen, where I work as a financial policy advocate, has amassed more than 20,000 signatures in a petition supporting this proposal. Here are 10 reasons to support this study.

1. BoA’s stock trades at about $15 a share. Before this acquisition in Merrill Lynch, the stock traded above $50.

2.The company’s book value is greater than the stock value. If the company is liquidated, with the $2.1 trillion in assets sold to pay off the $1.86 trillion in liabilities (deposits, bonds, etc), this will leave a net of $240 billion. But the stock is only worth about $160 billion. Buy all the stock, liquidate the bank, and shareholders can earn more than $80 billion.

3. The company earns (in after-tax income) a paltry 0.23 percent on these $2.1 trillion in assets. Imagine a factory that costs $2.1 trillion that only returns 0.23 percent on that investment each year. Investors might consider Microsoft, which generates 18 percent on its assets. Much of this difference between Microsoft and BoA is explained by the bank’s massive $1.86 trillion in debt. After servicing that debt, there is little left for shareholders. But even among BoA’s peer mega-banks, that 0.23 percent return is poor. Wells Fargo returns 1.4 percent on assets.

4. BoA’s return on shareholder equity is also poor. It has not been above 5 percent since the Merrill Lynch acquisition. Before that, it often returned more than 15 percent. That 15 percent is close to what Wells Fargo returns currently.

5. One reason that BoA performs so poorly with all this money is that it is too big to manage. The company owns hundreds of subsidiaries. Undoubtedly, the CEO couldn’t list them all, let alone recite their specific business purposes.

6. The company miscalculated its regulatory capital by some $4 billion—not just for one year, but for five years. It has restated operating line results numerous times.

7. JP Morgan posts better figures and enjoys a better management reputation than BoA, but an analyst believes JPMorgan would be worth more to shareholders broken up as well. John Reed and Sanford Weil who merged Citibank and Travellers Group into Citigroup both now agree that Citi would be better broken up. They understand the impossibility of managing the daily operation and risks of such a behemoth.

8. General Electric decided to sell GE Capital—and the stock price rose by more than 10 percent on the news

9. BoA managers failed to prevent massive fraud. In August 2014, BoA agreed to a $17 billion settlement with the Department of Justice. Explained the DOJ, “Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers.” Shareholders funded that $17 billion settlement with the government, not those responsible for the fraud at BoA. That precedent can serve as an invitation for other BoA managers to flout the law as well if there’s no personal accountability.

10. BoA’s size isn’t necessary to serve large customers. BoA joins syndicates for large loans. Boutique Lazard Freres brokered the sale of Heinz to Berkshire Hathaway.

Bartlett Naylor is the financial policy advocate for Public Citizen’s Congress Watch division. 

By Emily Myers

It’s Earth Day and we have something to celebrate:  Healthystuff.org released a report on the use toxic chemicals called phthalates in vinyl flooring. Phthalates have been shown to be hormone disruptors and could cause many health problems including reproductive issues. As mentioned in the report, the Mind the Store campaign of the Safer Chemicals, Healthy Families coalition, a campaign to push big retailers to do the right thing and put safer products on their shelves, has achieved a major milestone. One of the largest retailers in the country will remove phthalates in all virgin vinyl flooring by the end of this year. This is great! It will help protect consumers from having unsafe chemicals in their homes.

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Spring is in the air and that can only mean one thing: Investors across the country are gearing up to take on corporate executives at annual shareholder meetings.

Shareholders have filed more than 100 resolutions at companies asking for more information about electioneering and lobbying spending. Year after year, these types of resolutions are the most popular type of social resolutions that companies see. Since the U.S. Supreme Court’s 2010 Citizens United decision opened the floodgates to unlimited corporate political spending, investors have filed more than 500 resolutions calling for more transparency in corporate political activity.

This is also the time of year that the Corporate Reform Coalition, a group of investors, good governance advocates, elected officials and labor organizations (chaired by Public Citizen) steps up to make some serious hay around political spending resolutions.

This year, the coalition is highlighting ten companies’ political spending proposals. These companies represent a diverse set of industries, but they all have one thing in common: a lack of true transparency when it comes to how they influence policy in Washington. These companies are some of the biggest spenders on politics, and their influence peddling has gridlocked important issues like climate change, net neutrality and financial reform.

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Five years have passed since the Deepwater Horizon rig exploded in the Gulf of Mexico, killing 11 workers and setting off the worst oil spill in U.S. history. In the aftermath of the crisis, BP pledged to make the Gulf Coast and the victims of the oil disaster whole. Five years later, this promise has yet to be fulfilled. In fact, BP’s early pledge has largely been cast aside, because the cost to keep that promise has exceeded how much BP is willing to spend.

bp-smallerThe price tag BP put on making the Gulf whole – to cover fines, legal settlements and clean-up costs – is $43 billion. The company claims to have spent $27 billion already. And with BP facing up to $14 billion in additional penalties under the Clean Water Act, as well as more penalties under the natural resources damage assessment process and other claims, BP has needed to employ an aggressive legal strategy and PR campaign to keep its cost below $43 billion.

In place of the pledge to make the Gulf whole, the corporation appears to have adopted a new goal: keep BP whole.  

Which means instead of taking responsibility for the damage it caused, BP is using its vast resources on lawyers and public relations operatives to limit compensation and deflect accountability.

In a calculated effort to limit and delay compensation to those who lost or had their livelihoods marred by the disaster, BP launched a campaign in 2012 that included asking the court to freeze all payouts to victims while investigators reviewed, at BP’s request, potential fraudulent claims; attempting to have the 2012 economic damages settlement it wrote overturned by the courts; shutting out victims that opted out of the settlement by closing its internal claims program in June 2014; and running full-page ads in both The Wall Street Journal and The New York Times, whining that businesses like BP are the real victims of the Deepwater Horizon tragedy.

In December, the U.S. Supreme Court rejected BP’s appeal of its settlement to compensate Gulf Coast individuals and businesses harmed by the disaster, clearing the way for claims under the settlement to resume.

However, thousands who opted out of the economic damage settlement – because it did not adequately cover their losses – have been left with little recourse to recover damages from BP.

And communities in the Gulf and workers who assisted in the oil spill cleanup efforts, who are still plagued by illnesses associated with toxic dispersant BP used to break up the oil, may never receive compensation for their oil spill-related illness.

In the immediate aftermath of the spill cleanup, crews reported experiencing dizziness, fatigue, headaches, nausea, asthma attacks and coughing up blood. A study by the American Journal of Medicine found that those exposed to the dispersant, Corexit, have an increased risk of cancer and a host of other illnesses.

In 2013, the whistle was blown on BP for lying and misleading workers about the risks associated with the cleanup. But BP is disputing the spill’s role in health problems. In January, on the opening day of testimony in the final phase of the oil spill civil trial, BP’s public health expert witness testified that there is “no compelling evidence” that the oil spill damaged the health of cleanup workers and Gulf Coast residents, and there is no reason to believe longer-term studies will expose chronic illnesses linked to the disaster.

In November, a federal judge in New Orleans reluctantly ruled that roughly 95 percent of the workers injured from exposure to crude oil and dispersants during the spill no longer qualify for automatic compensation under BP’s medical benefits settlement. The judge told BP’s lawyers their interpretation was “troubling” and wasn’t what he was originally told when he signed off on the medical benefits settlement. The ruling could save BP as much as $1.2 billion.

New reports continue to document the ongoing damage caused by the oil spill. But you wouldn’t know it if you listened to BP.

Last April, just days before the fourth anniversary of the April 20, 2010, Deepwater Horizon rig explosion, BP issued a rosy statement declaring that active cleanup of the oil spill had come to a close. In response, the U.S. Coast Guard issued a statement saying, “not by a long shot.”

This year is no different.

In March, BP released a new report on the Gulf of Mexico claiming that affected areas are recovering and long-term impact to the population of any Gulf species will be insignificant. This time, the council of federal and state Natural Resource Damage Assessment trustees, Louisiana officials and environmentalists called out BP’s spin. The National Oceanic and Atmospheric Administration released this statement in response to the report: “Citing scientific studies conducted by experts from around the Gulf, as well as this council, BP misinterprets and misapplies data while ignoring published literature that doesn’t support its claims and attempts to obscure our role as caretakers of the critical resources damaged by the spill.”

In fact, researchers continue to find oil and uncover new damages – from lung disease in dolphins to the destruction of critical wetlands.

To challenge studies reporting the damaging effects of the oil disaster, BP has launched two websites, “The State of the Gulf” and “The Whole Story.” BP leverages the sites to address what it deems “misinformation” and “questionable science.” In fact, these sites exist solely for the purposes of attacking research and media reports that examine spill-related threats to the Gulf.

BP’s cherry-picked reports and assaults on studies detailing the ongoing damage caused by the hundreds of millions of gallons of oil spilled into Gulf of Mexico are tactics to minimize BP’s fines and limit it liability.

To be sure, none of BP’s tactics are new and its strategy to protect its bottom line is not shocking, but if the company succeeds in protecting itself, it could be at the expense of the people, communities and habitats devastated by the 87-day oil spill crisis.

Today, on the fifth anniversary of the Deepwater Horizon rig explosion, we shouldn’t focus on the “unprecedented” amount BP is paying for its manmade disaster. We should look at what BP is trying to avoid paying and what that means for the people and environment still trying to recover.

Otherwise we’re only telling half the story.

Learn more: “BP Five Years Later: Five Reasons Why It Could Happen Again Tomorrow”

 

Allison Fisher is the Outreach Director for Public Citizen’s Climate and Energy Program

 

 

 

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