Democratic Louisiana flag
Volume 1, Number 22
By Democrats For Democrats
June 30, 2010
Oil Change

Louisiana got some good news this week — Hurricane Alex didn't strike. It did, however, remind us that a storm does not have to hit us in order to disrupt efforts to contain or control the BP Gulf Gusher.

We are 72 days into this catastrophe — about three weeks short of a full season — with no relief in sight.

Our elected officials continue to pretend that everything will return to what passed for normal here once either the well is brought under control or the moratorium ends, whichever comes first. They don't much care.

The jobs will come back. The fishing return. The marshes will revive. The deep water drilling will restart. Money will begin flowing into the coffers of the companies made rich by their attachment to the energy industry. The coast will resume disappearing. And the politicians will once again have secure cash flows from the industry that raised them.

Shame on us if we let this happen.

That catastrophe kicking us in the face every day is just the latest reminder that the oil and gas industry views our state as nothing but an extraction base. Their decision makers don't live here anymore. The only real jobs they have to offer here are on rigs or boats. The real wealth generated by our natural resources is being enjoyed elsewhere — except for a few families that have parlayed the deep water boom into a cash gusher that makes them rich if they cooperate in the exploitation of our coast, the wetlands and the Gulf. They are partners in this crime that has wrecked Louisiana's coast, polluted our air and water and given a cynical undertone to the phrase "Sportsman's Paradise."

Those of us who believe that Louisiana much change, that we've already lost too much in this one-sided 'deal' with the energy industry, must speak out. We must break the hold of this industry over our political system. We must shed our state of the political followers who can't see beyond the contributions that they get from the industry and its allies.

There was a wonderful documentary on LPB the other night about the fall of the Berlin Wall. If it could happen there, change can happen here. We must make it happen here.

Here's the link to the archive page.

Thank you for reading!

Mike Stagg, Editor

Democratic Louisiana

Fun With Feldman's Finances

Things just keep getting stickier for U.S. District Court Judge Martin Feldman, the man who struck down the Obama administration's six-month moratorium on deep water drilling despite owning stocks affected by the ruling. The more information the judge releases in the hope of easing conflict of interest concerns regarding his finances, the more questions he raises.

Poor fellow. Not!

While there are very serious conflict of interest issues raised by the judge's financial holdings, there exists in his holdings and in the information available on the plaintiffs in the moratorium case the possibility that Judge Feldman might have known some of the individuals who brought the case to his court.

Judicial Watch has Judge Feldman's financial statement from 2003 which shows that he owned stock in Tidewater, Inc., of New Orleans. In 1996, Tidewater bought Hornbeck Offshore Services, Inc., according to Tidewater's history timeline.

Todd Hornbeck went to Tidewater after the merger and stayed a year. He met Carl G. Annessa at Tidewater. Annessa had been with Tidewater for at least 16 years by the time of the merger. Both left Tidewater in 1997 to join HV Marine Services, an independent company under the aegis of Larry D. Hornbeck, Todd Hornbeck's father and founder of the original Hornbeck Offshore Services.

Bollinger Shipyards built a number of boats for Tidewater in the early 1990s, back when Annessa (now Hornbeck's Chief Operating Officer) was, among other things, designing boats for Tidewater.

In 2002, HV Marine Services was re-named Hornbeck Offshore Services, Inc. Hold that thought.

In 2003-2004 (around the time Judge Feldman owned its stock), Tidewater ordered four supply boats from Bollinger Shipyards in Lockport.

Bollinger built three tank barges for Hornbeck Offshore Services in 2007-2008. This year, the two companies joined in the challenge to the deep water drilling moratorium that Feldman heard and upheld.

There are no smoking guns here, but New Orleans is a lot like a small town. Elites in the city run in small, tight circles. Is it possible that the federal judge might have run into the future Hornbeck officials while they worked for the local company in which he held and investment — Tidewater? Was he aware that Tidewater and Bollinger did business together when he owned stock in the former? Does he know Donald Bollinger? Gary Chouest? Stranger things have happened. Even in the judge's portfolio.

Any chance for good cooperation between the federal government and the state of Louisiana in the response to the BP Gulf Gusher died on May 30 when the U.S. Department of the Interior declared a six-month moratorium on deep water drilling in the Gulf of Mexico in the wake of the then month-old disaster.

Although the New York Times reported that Governor Bobby Jindal's personal dissatisfaction with the federal response to the disaster had gone public by May 3, the moratorium ratcheted up the pressure in the already tense situation by threatening losses in the industry that had caused the disaster.

The logic of the moratorium is impeccable. Here was an on-going gusher on the floor of the Gulf of Mexico from a well that was owned by one of the major energy companies, BP, and it was out of spewing ever larger quantities of oil into the Gulf. The best minds in the industry were helping BP develop strategies to cap the well, but nothing appeared to be working. And, in fact, nothing has worked yet.

There were published reports of at least one other deep water rig with safety issues. The emergency response plans of the other major operators in the deep water areas open to drilling looked suspiciously like BP's which mentioned the need to protect walruses that might be impacted by a potential spill. Walruses in the Gulf of Mexico, remember?

So, the moratorium looked like the prudent call until the cause of the BP Gulf Gusher could be identified, the well capped, and a new set of safety rules issued based on what was learned from this incident.

But, alarm about the potential impact from the moratorium quickly went up along the coast and from within state government. Tens of thousands of jobs were threatened if the moratorium was allowed to stand. The job loss numbers fluctuated but trended downward in the first weeks after the moratorium was announced.

Jindal assigned his newly minted Lieutenant Governor Scott Angelle the task of heading up the effort to generate public opposition to the moratorium. Angelle formed a coalition and had an online petition created. He traveled across the southern part of the state rallying opposition. He met with federal officials, parroting dire predictions of the impact of the moratorium. He followed Jindal's lead and bashed the President.

"Mr. President, I get the fact that you don't like big oil and gas," said Jindal's recently appointed interim lieutenant governor, Scott Angelle. "But this is not about the stockholders of BP and Shell and Exxon and Chevron. This is about the Cheramises and the Callaises and the Boudreauxs and the Thibodeauxs!"

Still, the moratorium stuck.

Oligarchs In The Open

Then Hornbeck Offshore Services, LLC, of Covington, announced its intention to file suit challenging the moratorium. It was assigned to Federal District Court Judge Martin Feldman in New Orleans and the rest is history. Feldman overturned the moratorium. An appeal has been set.

Hornbeck was joined in the challenge by 37 other companies in the challenge, giving the impression that a broad swath of the industry opposed the moratorium. The governor's office filed a brief in support of Hornbeck's claim.

In retrospect, it was something of a charade. The 37 companies that joined Hornbeck in the suit were owned by two families, both headed by second-generation scions to empires that their fathers built from scratch. Donald T. Bollinger (21) and Gary Chouest (16) and their families controlled all 37 companies that joined the Hornbeck challenge. The companies are mostly based in Louisiana with one Bollinger company in Texas, a Chouest company in Mississippi and one in Florida. All but two of the companies at limited liability corporations, meaning that they are personally controlled by the people heading the LLCs.

For the relevant corporate documents (PDFs) on each of the Bollinger companies that took part in the challenge, click on the name: Bee Mar-Worker Bee LLC; Bee Mar LLC; Bollinger Algiers, LLC; Bollinger Marine Fabricators, Inc.; Bee Mar-Bayou Bee LLC; Bollinger Amelia Repair, LLC; Bee Mar-Bee Hive, LLC; Bee Mar-Queen Bee, LLC; Bollinger Shipyards, Inc.; Bee-Mar-Honey Bee LLC; Bee Mar-Busy Bee LLC; Bee Mar Crews LLC; Bee Mar-Bumble Bee LLC; Bollinger Texas City, LP; Bollinger Calcasieu, LLC; Bollinger Shipyards Lockport, LLC; Bollinger Quick Repair, LLC; Bollinger Morgan City, LLC; Bollinger Gretna, LLC; Bee Mar-Bee Sting LLC; and Bollinger Fourchon, LLC.

Here are the names of the Chouest companies (click names for corporate details): North American Fabricators, LLC; Offshore Support Services, LLC; Martin Holdings, LLC; Sea Fluids, LLC; C-Port 2, LLC; C-Port, LLC; Fourchon Heavy Lift, LLC; C-Innovation, LLC; Clean Tank, LLC; North American Shipbuilding, LLC; Alpha Marine Services, LLC; Nautical Solutions LLC; Nautical Ventures, LLC; and Reel Pipe LLC. Two other Chouest companies took part in the challenge: Tampa Ship, LLC and Gulf Ship, LLC. Those links take you to pages on the Chouest web site.

The involvement of these 37 companies did not constitute a broad industry response. It was, instead, a shriek of anger at the federal government that had thrown into jeopardy the empires of two of the key members of the new Republican oligarchy that has been ascendant in Louisiana politics in recent years. The Bollingers and the Chouests were reliable heavy hitters for the party and its causes.

Click here to read the rest of "Waritorium"

Tea Party members in Houma and Lafayette have embraced opposing the deep water drilling moratorium announced by the President in the wake of the BP Gulf Gusher.

From a political standpoint, this embrace of the oil and gas industry constitutes a betrayal of the modern movement's namesakes. Opposition to the moratorium indicates that today's Tea Party members are actually Red Coats.

At the heart of the matter is the nature of the oil and gas industry in Louisiana. For decades the industry flourished here, providing plenty of good jobs that enabled men with poor educations but good backs to make good money in the oil patch. There were also white collar jobs as many energy companies had regional offices in the state.

But, oil production in Louisiana peaked in the early 1970s, and natural gas production was not far behind, according to this 2009 presentation (PDF) delivered in Lafayette. When the industry crashed in the mid 1980s, most of those white collar jobs left when the industry consolidated.

This paring back of the managerial layer revealed the neo-colonial nature of the energy industry here.

Here's how neo-colonialism is defined in the 2005 edition of Collins Discovery Encyclopedia: "political control by an outside power of a country that is in theory sovereign and independent, esp through the domination of its economy."

Louisiana is not a country, but our politics remain under the control and influence of outside forces — specifically, the oil and gas industry. Sure, people still work for the industry, but, not nearly as many as once was the case. The Louisiana Workforce Commission says (PDF) there were 7,200 drilling jobs in Louisiana in May and put the total number of people involved in drilling and supporting roles at 51,500. There are 1.5 million people working in Louisiana, putting total "mining" employment (drilling, logging, and mining for salt, carbon black, lignite, other materials) about 3% of the total workforce.

Mineral rights continue to be paid to land owners (just ask the folks in the Haynesville Trend area!), but the bulk of the wealth from our resources still go outside the state.

What makes this a classic extractive neo-colonial relationship in that our political elites in both parties (with rare exception) remain under the control and influence of the energy industry. They remain under the influence of that industry because of the money that the industry can direct into their campaign coffers.

So, the energy companies —based in Houston, London, The Hague, and elsewhere — throw money and a few jobs our way and take the real money and run. BP made $6 billion in profits in the first quarter of this year — and they were not the most profitable energy company in the corporate world. They didn't earn all of that money here, but they made more money in Louisiana than they spent . The equation will be different this quarter for obvious reasons.

The mineral wealth extracted from here builds real wealth for others in other parts of the world. The political control exercised by the energy industry here blocks any attempts to snare a larger share of that wealth for our own uses. That is the essence of a colonial relationship.

So, when Tea Party members protest the moratorium and embrace the energy companies, they embrace the colonizing force. They are, in fact, taking the opposite side of the fight that the original Tea Party members did back in 1773.

The names of some of the companies should make it clear: British Petroleum. Royal Dutch Shell. Today's Tea Partyers defend the Brits, the Crown and other colonizers of our state. Shame!

Bobby Jindal says he's not running for president. That's probably because he's too busy acting like a king.

It's been a heady couple of weeks for the Governor of a state mired in a deep fiscal crisis largely of his own making and confronting an epic ecological and economic catastrophe that he had a hand in creating.

Jindal swept into Baton Rouge on the Friday before the final day of the legislative session to declare his support for the Senate version of the budget and House conservatives rolled over and gave him what he wanted. He ignored large majorities in both houses and strong public support for transparency in his office by vetoing a bill (HB 37) that would have made all state records relating to the BP Gulf Gusher available under the state's open records act.

Jindal acted with impunity towards the Legislature and the public with his veto of HB 37. In his veto letter (bottom of the page) to Clerk of the House, Alfred Speer, Jindal added insult to injury by giving a completely bogus explanation of his action:

The Deepwater Horizon incident is a man-made event with responsible parties that will create long-term challenges for the State of Louisiana. This bill would allow BP and other parties with potential liability to the state to obtain information retained by any state agency responding to this tragic event. Such access could impair the state’s legal position both in responding to the disaster that is unfolding and in seeking remedies for economic injury and natural resource damage.

As was pointed out here, attorneys in lawsuits always petition records from the other party. It's called discovery and the state has no power to shield any records from such a process in a court proceeding. Jindal's veto, though, will keep those records out of the court where he is most vulnerable — the court of public opinion, where his high-handedness and disregard for the opinions and views of those outside his immediate circle have created a backlash against him in both houses of the Legislature.

Another veto prospect is HB 1443 which would require legislative involvement and oversight of the privatization contracts for state mental health hospitals. That bill passed by smaller margins than the Gulf Gusher records bill, but it did have the support of a broad bi-partisan coalition of legislators in both houses. Department of Health & Hospitals Secretary Alan Levine all but promised a veto in an attempt to block passage, but neither body would back down.

Jindal displayed so little regard for the Legislature that some of his allies in the House (at least they were allies before the budget deal) tried to sneak provisions into a Senate-passed bill that would have granted immunity from liability for state and political subdivisions for actions taken in the effort to combat the results of the BP Gulf Gusher. Another House amendment in the bill would have eliminated the need for Jindal to veto the Gulf Gusher records bill by protecting them. Senators caught on to what was happening and killed SB 520 and the sneak attacks contained in them.

The reason Jindal might have sought the immunity provision only became evident after the session ended when the U.S. Department of the Interior shut down dredging for Jindal's pet berms project because the state was violating the terms of the permit issued.

Jindal screamed "bureaucratic red tape." The Department of the Interior responded that the state had been told the dredging was not being carried out in compliance with the permit and had dragged its feet in moving the dredging operation to an approved source of sand. The Time-Picayune summed it up in a story that appeared on Wednesday, June 23, two days after the session ended and three days after the attempt to grant Jindal and Nungesser immunity from liability:

Jindal and Plaquemines Parish President Billy Nungesser criticized the delay Tuesday and asked the federal government to allow the state to continue dredging from the current site as it prepares to move operations to another sand borrow site a mile farther offshore.

But the Obama administration said the state has been unprepared since the beginning, has caused further delay because it did not have the proper pipe available and has continued to ask for more time to shift to the offshore site. According to the Interior Department, it gave the state permission for more than a week to use the closer source of sand while locating the pipe, but that allowing the state to continue dredging could have negative impacts on existing barrier islands.

Jindal and Nungesser risked destroying the fragile island with their dredging ostensibly in order to save the coast from the oil. It is disturbing but consistent with this project that was never the subject of any scientific review and was rammed down the throats of federal regulators by the fear that Jindal or Nungesser — or both — would stroke out if their request for a permit of some kind was not granted. Having received the permit, the Governor, his parish government sidekick and his hand-picked contractor — the Shaw Group (who happens to be a heavy contributor to the Louisiana Republican Party) — immediately proceeded to ignore the terms of that permit.

By the time the dredging was shut down, Jindal had been resisting the federal government's prodding of the state to move its operations for at least a week. That means that Jindal was engaged in resisting the federal government at the very time his liability immunity amendment was inserted on the House side and the attempt was made to sneak it through the Senate.

The senators could not be fooled and Jindal was not able to intimidate the Department of the Interior on the dredging permit, so the work was forced to stop. The immunity question became moot. As is his custom, Jindal ranted and he raved, but the operation was stopped while the dredge was moved.

Click here to read the rest of "Impunity & Immunity.

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