Begich Joins Senators Urging Transocean to Delay $1 Billion in Dividends before Paying Its Bill for Gulf Oil Spill
Determined not to leave taxpayers, Gulf Coast businesses and communities paying the bill for the devastation caused by the Deepwater Horizon explosion and uncontrolled release of oil into the Gulf of Mexico, U.S. Sen. Mark Begich joined a number of other senators writing to Steven Newman, Chief Executive Officer of Transocean, Ltd., asking the company to postpone a planned dividend distribution until Transocean’s liability in the nation’s worst environmental disaster in history is determined and its financial obligations for the disaster paid.
Transocean, Ltd. owned and operated the Deepwater Horizon drill ship that was leased by BP and exploded on April 20, 2010, killing 11, injuring 17 and spewing untold amounts of oil into the Gulf of Mexico.
“It seems inexplicable to us that, while a full accounting of your company’s financial responsibilities is not yet clear, you are still planning to issue $1 billion in dividends as if no accident had occurred,” wrote the senators. “…Those who have legitimate legal complaints against Transocean should not be limited by having your company’s financial fortunes depleted by the massive payout of dividends your company has planned.”
Begich made the appeal in person when he met with Transocean officials on June 16, and eagerly joined his colleagues in formally making the request.
“They need to understand their responsibility to those harmed by this disaster is greater than their duty to shareholders,” Begich said.
The senators encouraged Transocean to follow the lead of BP, whose chairman announced a delay in BP’s planned dividend distribution of $10 billion after a meeting with President Obama on June 16, 2010. Sen. Begich, along with 17 other senators, had asked in a May 24, 2010 that Attorney General Eric Holder investigate reports of Transocean’s planned dividend distribution. The letter followed the appearance of Transocean representatives at a Senate Energy and Natural Resources Committee the prior week, during which the executives refused to accept any financial responsibility for the oil spill in the Gulf.
A text of today’s letter follows:
June 24, 2010
Mr. Steven Newman, CEO
Chemin de Blandonnet 10
Dear Mr. Newman:
Every day, the world watches as more and more oil spews into the Gulf of Mexico from the remains of your company’s Deepwater Horizon platform, devastating wildlife and destroying communities throughout the area. In the face of such destruction, we urge you to follow the lead of BP and postpone your pending $1 billion shareholder dividend until the extent of your company’s responsibility for the worst environmental disaster in American history is assessed.
As you know, on May 24, we expressed our concern to Attorney General Eric Holder about your company’s dividend. Since then, the damage from the Deepwater Horizon spill has expanded in untold ways, without any apparent immediate solution. In fact, some reports predict that the oil gusher could continue for years. Meanwhile, the legal proceedings around the disaster remain murky. It seems inexplicable to us that, while a full accounting of your company’s financial responsibilities is not yet clear, you are still planning to issue $1 billion in dividends as if no accident had occurred. We also find your company’s efforts to limit your liability in federal court under centuries-old admiralty law a troubling sign of whether you intend to meet your responsibility. While we understand your need to reassure shareholders during these difficult times for your company, we do not believe that such reassurances should come at the expense of meeting your responsibilities to the communities of the Gulf Coast. Bills must be paid before profits are distributed, and Transocean’s bill for the failure of the Deepwater Horizon is not yet calculated.
Many things remain unclear about what happened on the Deepwater Horizon. Before your company begins to reward its shareholders, we urge you to follow BP’s example by withholding further shareholder rewards until investigations of this matter are complete. Those who have legitimate legal complaints against Transocean should not be limited by having your company’s financial fortunes depleted by the massive payout of dividends your company has planned.
We thank you for your attention and your prompt reply.###
Posted: June 25, 2010