washingtonpost.com
Despite BP corporate code, firm has made political contributions

By Carol D. Leonnig
Washington Post Staff Writer
Tuesday, June 29, 2010; 3:29 PM

BP, the global energy corporation whose massive oil spill is now fouling huge swaths of the Gulf of Mexico, proclaims in its corporate code of conduct that it will "make no political contributions, whether in cash or in kind, anywhere in the world."

But BP North America -- the energy giant's U.S. subsidiary -- has donated at least $4.8 million in corporate contributions in the past seven years to political groups, partisan organizations and campaigns engaged in federal and state elections, an analysis of campaign and tax records shows.

Its most generous corporate contributions -- totaling about $4 million -- have gone to two Republican-aligned political action groups working to defeat state ballot initiatives in California and Colorado that could have raised oil and gas industry taxes, according to an analysis of state campaign reports by the Center for Political Accountability. On the national scene, BP spent about $112,000 in corporate money to boost the coffers of Democratic and Republican party organizations seeking to elect candidates to higher office, primarily the Democratic Governors Association and the Republican State Leadership Committee.

When asked about its political spending, the energy giant said there is no conflict between its ban on political contributions and its donations to political groups. A BP spokesman said its policy bans contributions only to individual candidates in state and federal races, and does not apply to contributions to political advocacy groups registered with the Internal Revenue Service, political party organizations that give money to individual candidates, arms of political parties or larger political campaigns.

"The types of spending that we reported here fits within our policy," said BP spokesman Scott Dean. "Our policy on not making corporate political contributions relates to candidates for political office at the state and federal level."

BP's Dean said donations for ballot groups are to help educate the public about policies. He said the donations to partisan Republican and Democratic operations are for the groups' education funds, and are not intended for partisan political electioneering.

"The California and Colorado ballot initiatives referred to are to support information campaigns concerning legislation or tax initiatives targeting our industry. This money did not go to a political party or candidate, so it is consistent with our guidelines," Dean said. "As to the Republican and Democratic governors associations . . . these contributions are to the educational arms so the money does not support political activity either at the state or federal level."

Bruce Freed, executive director of the Center for Political Accountability, said the difference between the broad statement and the contributions suggests BP management is not being publicly transparent. He compared it to BP's conduct in managing the geyserlike oil spill at BP's Deepwater Horizon rig, which has called into question the company's pronouncements about its commitment to safety.

"They both raise real questions about BP management and how they run things," Freed said. "They said they were very thorough on safety, and it turns out they weren't. They said they weren't giving political contributions and it turns out they were. . . . It seems like this is part of the culture of BP."

Meredith McGehee, a campaign finance expert at the watchdog Campaign Legal Center, said BP may have aimed for a good corporate image, and assumed that its broad statement would not be carefully examined. She said corporations often steer corporate money into state and local political organizations or to tax-exempt 527 political advocacy groups, where there is less disclosure and less press scrutiny.

"Anyone who believes these large corporations aren't deeply involved in political decisions at every level of government is kidding themselves," McGehee said.

BP gave $75, 000 to the Democratic Governors Association over the past two election cycles and $15,000 to the Republican State Leadership Committee. The Democratic Governors Association describes itself as "a political organization . . . dedicated to electing Democratic governors and candidates." The Republican State Leadership Committee's reports that its purpose is to "raise money for state political activity and organize meetings of state leaders and officeholders to promote Republican candidates and Republican issues."

BP began making this broad promise in 2002, as it waged a campaign to become more transparent about its interactions with the governments of various countries in which it did business. Executives then proclaimed on BP's Web site that they concluded no corporate money should be used for political activity.

"We recognize that political contributions, whatever the amount, can be viewed as an inducement for future beneficial treatment, a political bias or interference in the democratic process," BP said. "In 2002, BP changed its policy to stop making corporate donations anywhere in the world."

BP's guidelines are featured in the "Government and Communities" portion of its corporate code of conduct.

But many of the groups that received BP's corporate money said they were unaware of this code and prohibition on political contributions.

Allan Zaremberg was a director of a tax-exempt political organization, better known as a 527, that in 2006 received a $3 million BP donation for its work. . It was the largest known single amount BP has donated to a political group.

"Californians Against Higher Taxes -- No on 87" was a pro-business entity trying to defeat Proposition 87, a ballot initiative put to California voters in November 2006 that would have used a 1.5 to 6 percent tax on producers of oil extracted in California to help reduce petroleum consumption in the state and fund research for alternative energy.

Zaremberg was and still is president of the California Chamber of Commerce. He did not agree to be interviewed for this article, but through a chamber spokeswoman said that he wasn't aware of a BP's corporate policy prohibiting political contributions.

"It's really their policy to define," spokeswoman Denise Davis said. "You need to ask them."

AKFirst.org was another 527 group funded largely by BP money. It was created to defeat a 2006 ballot initiative that would have levied a tax on untapped natural gas reserves in Alaska's North Slope to help pay for a pipeline to carry the gas out. At the time, BP was the dominant oil driller in the North Slope when pockets of natural gas were discovered deep underground. Its role in helping fund AKFirst and to defeat the proposed tax was not disclosed.

The proponents of the levy argued to the state election commission in 2006 that AKFirst should have to disclose its funders so the public could better gauge the ads the group was running to defeat the levy.

Curt Thayer, who was the treasurer of AKFirst and is now the state's deputy Commissioner of Commerce, said he was not aware of BP's corporate policy against political contributions.

"Yeah, it was political in nature. It was meant to influence the outcome of the election," he said of the group's work. "I'm unfamiliar with BP's policy. I'm not sure it was in existence at that time."

Research editor Alice Crites contributed to this report.

Post a Comment


Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.

© 2010 The Washington Post Company