The Bottom Line: Big Businesses Rake In Massive Profits, Face Minimal Punishment For Disasters
This is part of a series of items Political Correction is publishing in conjunction with the Cry Wolf Project on the history and legacy of the Triangle Fire in commemoration of its 100th anniversary this Friday.
the time the boys fired the lighter in the park, many people had
smelled a strong gasoline odor, and officials were already beginning to
check it out when the creek literally exploded. The two boys jumped in
the creek, but the water itself was on fire."
On June 10, 1999, a pipeline operated by the Olympic Pipeline Company burst open, releasing 277,000 gallons of gasoline into Whatcom Creek. Two young boys, Wade King and Stephen Tsiorvas, picked up a lighter and sparked it while playing by the creek. Almost immediately, the entire creek was set on fire. As the boys were being airlifted to a burn center in Seattle, the doctors told Wade's father, Frank, that "his son had no skin left, that he could not be saved and that it was probably better to let him die quickly."
After the event, Frank said, "Maybe this kind of accident is a onetime thing, and maybe the odds aren't very high that it would happen. But it did happen. And what would have happened if that explosion had occurred in the city? I mean, Bellingham might have been blown off the map."
Unfortunately, this story is not an isolated incident. The explosion that killed two 10-year-old boys in Washington has been played out around the country numerous times. Accidents resulting from faulty equipment or after numerous warnings by governmental agencies are all too common.
Since 1998, four companies — Imperial Sugar, BP, Walter Industries, and Koch Industries — have paid a grand total of $121.9 million to lobby Congress for policies that benefited their bottom line. At the same time, their refineries, factories, pipelines, etc. were costing American lives and destroying our environment. Despite the numerous deaths and environmental disasters these companies caused, they only paid a total of approximately $18.3 billion in settlements (prior to the recent BP Deepwater Horizon settlement, that number was only $727.2 million) while making more $872 billion in profits.
Profits: $113.68 million
Lobbying Expenses: $1.3 million
Settlements: $ 6 million
Profits: $94.11 billion
Lobbying Expenses: $64.5 million
Settlements: $17.7 billion
Profits: $523 million
Lobbying Expenses: $700,000
Profits: $777.75 billion
Lobbying Expenses: $55,252,700
Settlements: $589.8 million
- Koch Industries' profits are 1,318.7 times greater than their settlements
Imperial Sugar — 14 American Deaths, $113 Million In Profits
In February 2008, an explosion occurred at the Imperial Sugar plant in Port Wentworth, Georgia, killing 14 and injuring 36. Imperial Sugar had received warnings of the dangers of sugar dust in the facility since the 1960's
but never fixed the problem. For the violations at the Georgia plant as
well as another Imperial Sugar plant in Gramercy, Louisiana, "Imperial Sugar agreed to pay more than $6 million in fines."
After years of warnings about safety issues that contributed to the deaths of more than a dozen people, Imperial Sugar filed, and won, a property insurance claim for $345 million. So despite losing money in 2009, Imperial Sugar's 2010 profits rose to $136.86 million due in part to the settlement and fully restoring operations to the plant. The year of the explosion, 2008, lobbying by Imperial Sugar reached its highest level, most likely to engage in damage control for the company's reckless and irresponsible behavior.
Imperial Sugar Profits 2009-2010 (in millions)
Imperial Sugar Total Lobby Expenditures 2003-2010 via OpenSecrets.org
BP — 26 American Deaths, $94,110,000,000 In Profits
2010 Deepwater Horizon accident may have been the first time a majority
of Americans took note of BP's practices, but it certainly was not the
first time BP had caused a major accident in the United States. Over the
past 5 years, BP has been causing human deaths and environmental
disasters in and around the country. In March 2005, a BP oil refinery in
Texas City exploded, killing 15 and injuring more than 100. A year earlier there was a series of explosions at the same facility
which did not result in any injuries. Government inspectors found 300
violations at the plant, and the penalties from the explosion cost BP
That same year, the BP oil rig Thunder Horse almost sank in the Gulf of Mexico because of a "shockingly simple mistake: a check valve had been installed backward, and that caused the water to flood into, rather than out of, the rig when it heated up during the hurricane."
In March 2006, almost exactly a year after the Texas City explosion, BP pipeline caused 267,000 gallons of oil to spill into Alaska's North Slope. BP paid $20 million in fines for the pipeline spill. In 2009, inspectors revisited the Texas City refinery and "found more than 700 safety violations and proposed a record fine of $87.4 million."
In March 2010, OSHA proposed another $3 million in penalties after finding multiple violations at a BP refinery in Ohio. Again in May 2010, another 200,000 gallons of oil had leaked from a BP pipeline in Alaska. Most recently, the Deepwater Horizon explosion, which killed 11 Americans and spilled 172 million gallons of oil into the Gulf of Mexico, is estimated to have cost BP $17.6 billion in fines.
After causing major disasters, BP spent millions on lobbying Congress for less regulation of the oil industry. Particularly, in 2009, the year of BP's highest fine until Deepwater Horizon, the company spent more on lobbying than any year since 1999.
BP Profits 2005-2009 (in billions)
BP Lobbying Money 1999-2010 via OpenSecrets.org
Walter Industries — 13
Deaths, $523 Million In Profits
In September 2001, 13 miners were killed at the Jim Walter Resources Mine No.5. in an explosion considered the "worst US mining disaster since December 1984."
According to three-part series by the Associated Press, Jim Walter
Resources, a subsidiary of Walter Energy (formerly Walter Industries),
was making about $2 billion a year from mining coal at that time. Jim Walter Resources Mine No. 5 had the third most violations in the country in 2000.
One of the workers taken out of the mine and brought to the hospital "was conscious but burned from the top of his head to the soles of his feet. ... By the time his wife, Cathy, got there, he had slipped into a coma. All she could do was ask the nurses to clean the coal dirt from his swollen tongue. The next day, he died."
Despite the horrific loss of life and numerous safety violations, Jim Walter Resources was only fined $435,000. In 2010, Walter Industries reported a net income of $385.8 million and in 2009, its net income was $137.2 million.
Walter Industries Profits 2009-2010 (in millions)
Walter Industries Lobbying Money 1998-2007 via OpenSecrets.org
Koch Industries — 2 Deaths, $777,750,000,000 In Profits
The Koch Brothers, Charles and David, have a combined net worth of $44 billion. Their corporation, Koch Industries, runs many companies in diverse industries such as oil, chemicals, and paper. Koch Industries has had numerous lawsuits filed against its companies for various offenses over the past decade.
On March 1, 2000, Koch Petroleum Group was sentenced to pay a "$6 million criminal fine and pay an additional $2 million in remediation costs" after violating the Clean Water Act. Koch Petroleum Group admitted that it "negligently discharged aviation fuel into a wetland and adjoining waterway." In May 2001, Koch Industries settled a case with the government for $25 million after "improperly taking more oil than it paid for from federal and Indian lands."
Despite numerous offenses, deaths, and million-dollar settlements against them, Koch Industries continued to lobby congress for less regulation. In 2008, Koch Industries spent millions on lobbying, presumably to support anti-regulation Republicans. Other Koch settlements include:
In a January 2000 settlement, Koch Pipeline agreed
$5 million to a variety of environmental projects to settle cases filed in
Texas and Oklahoma. The company also paid "a $30 million civil
fine to resolve spills occurring over nearly 10 years of pipeline
operations with the U.S. Department of Justice and the Texas Attorney General's
- One of these spills led to the death of two teens in 1996 after a spark from a truck lit butane from the leaking pipeline, which a Chattanooga Times article from August 26, 1996, identified as being operated by Koch Industries. "Flames reached dozens of feet high and a column of black smoke could be seen for miles."
- In an April 2001 settlement, Koch Petroleum Group agreed to "pay a total of $20 million dollars: $10 million in criminal fines and $10 million for special projects to improve the environment in Corpus Christi."
- In a December 2006 settlement, Flint Hills Resources (a subsidiary of Koch Industries) was fined $16,000 and asked to pay $60,000 for a Supplemental Environmental Project after ten separate violations of the Clean Air Act.
- In an April 2009 settlement, Invista (a subsidiary of Koch Industries) had to pay "$1.7 million in civil penalties and spend up to an estimated $500 million to correct self-reported environmental violations discovered at facilities in seven states."
Koch Industries Lobbying Money 1998-2010 via OpenSecrets.org
Estimated Koch Industries Profits 1998-2010 (in billions) via Forbes