BP, S&P suits show the wheels of justice turn slowly
Years have passed since the Deepwater Horizon tragedy and the financial crisis.
When the Deepwater Horizon oil rig blew up, almost three years ago, we had a good idea where the responsibility lay.
Despite finger-pointing at rig operator TransOcean (RIG) -- whose stock price never fully recovered even with an oil boom -- or cement producer Halliburton (HAL) -- which quickly recovered its pre-spill share price of $35, but has made little progress since -- most of the blame has fallen on BP (BP), as 65% owner and spokesman for the group.
As an investment, BP tracks Exxon Mobil (XOM). Since the spill was capped, the two stocks have continued to track, but BP has not gained any of the ground it lost. Not in the markets, and not in the public imagination. The stain abides.
Despite happy talk from CEO Bob Dudley, that's unlikely to change.
The Deepwater Horizon civil trial doesn't open until later this month; BP's efforts to strike a deal with Louisiana are floundering; and now there are unrelated price-fixing charges coming from a whistle-blower.
BP shareholders, in short, are twisting slowly in the wind nearly three years on. And because corporations aren't really people -- as Texas has yet to execute one -- that may be all the justice we get.
Instead, justice may lie in money, to repair the lives and livelihoods lost, and new rules, described by WKRG TV, that the drillers will want to follow so as not to walk in BP's shoes.
The delays in the BP case pale in comparison to what came out of the 2008 market crash. A civil suit is only now being prepared against Standard & Poor's, a unit of McGraw Hill (MHP), The Washington Post reports.
James Poulos of Forbes calls this "American bloodlust," but the case against the banks, and their enablers, is far less clear than the one against BP. And history shows that, in the case of economic collapse, justice may lie more in the collapse itself than in the courts.
One of my early fascinations as a business reporter was Samuel Insull. Insull, once a clerk to Thomas A. Edison, built a huge Chicago-based utility conglomerate that assured manufacturers of steady input prices early in the last century. When it collapsed in the 1929 crash, he became a wanted man. When he was tried, in 1934, he was basically blamed for the Great Depression.
Insull was acquitted, but he was broken and died in 1938. Although the movie "Citizen Kane" is said to be a fictionalized biography of William Randolph Hearst, the back half of the movie, Kane's fall, was mostly Insull.
Justice in business cases isn't like justice in cases involving personal violence. The violence in business cases isn't personal, the criminals aren't people and the resulting disgrace doesn't give you the same feeling of revenge.
The aim of justice, however, is the same: to create enough disgrace so that others will be more careful, and enough reform so that the lines preceding disgrace are clearer and farther from the edge of catastrophe.
At the time of publication, the author had no investments in the companies mentioned here.
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