I wasn’t too surprised that illegal conduct seems to bring about laughter from BP instead of concern and a willingness to conduct business in a respectable manner. We previously reported about a whistleblower action filed by a former BP employee and later joined by the California Attorney General alleging that BP systematically overbilled state and local government facilities for natural gas. For the past decade, California’s Department of General Services entered into exclusive contracts with BP to provide natural gas for entities in hopes of locking in a reasonable and constant price. Instead, the state alleges, BP routinely sold natural gas to the state at a rate well above the market price. Ultimately, BP reaped a profit margin that was at least three times what was set in the contracts.
These overbillings, which totaled between $150 million and $300 million, allegedly resulted from BP’s management manipulating its profit margins to exceed any reasonable amount of profit and greatly exceeding caps established by contracts with California. According to the complaint, this conduct is even more egregious because BP’s traders sold gas at inflated prices only to state agencies. It allegedly overcharged California agencies by as much as 10 times what it billed other bulk-purchase customers between 2004 and 2012.
The complaint alleges that BP’s management was well aware of these practices and, according to intercompany emails, congratulated traders who unlawfully gouged the state. One manager supposedly bragged about “squeezing gold out of that goose, [so there is] not a lot of love when it happens…LOL.”
Apparently, BP permits any questionable conduct as long as it results in the company reaping a profit. We have seen BP cut corners in its operation of the Deepwater Horizon oil rig, which exploded, killing 11 crewmen and causing extensive environmental and economic damages throughout the Gulf of Mexico. Unfortunately, it should come as no surprise that BP has also been stuffing its coffers from illegally bilking California taxpayers. California Attorney General Kamala Harris is seeking treble damages plus civil penalties under California’s False Claims Act.
Source: Bloomberg News
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