Senators Urge Transocean To Delay $1 Billion in Dividends Before Paying Its Bill for Gulf Oil Spill
Washington, D.C. – Determined not to leave taxpayers, Gulf Coast businesses, communities and wildlife paying the bill for the devastation caused by the Deepwater Horizon explosion and uncontrolled release of oil into the Gulf of Mexico, U.S. Senators Ron Wyden (D-Ore.), Chuck Schumer (D-N.Y.), Patrick Leahy (D-Vt.), Patty Murray (D-Wash.), Byron Dorgan (D-N.D.), Tom Harkin (D-Iowa), Bernie Sanders (I-Vt.), Russ Feingold (D-Wisc.), Robert Menendez (D-N.J.), Jeanne Shaheen (D-N.H.), Max Baucus (D-Mont.), Bill Nelson (D-Fla.), Blanche Lincoln (D-Ark.), Amy Klobuchar (D-Minn.), Mark Begich (D-Alaska), Jeff Merkley (D-Ore.), Mark Udall (D-Colo.), Sherrod Brown (D-Ohio), Robert Casey (D-Penn.), Kirsten Gillibrand (D-N.Y.), Mark Pryor (D-Ark.), Frank Lautenberg (D-N.J.), Michael Bennet (D-Colo.), and Barbara Boxer (D-Calif.) wrote 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. owns and operates the Deepwater Horizon oil rig that was leased by BP and that 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.”
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. Senator Wyden, along with 17 other senators, had asked in a May 24, 2010 letter, 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.
The 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.