'Spillionaires': Profiteering and Mismanagement in the Wake of the BP Oil Spill
Some people profited by charging BP outrageous rates for cleanup. Others profited from BP claims money, handed out in arbitrary ways. Meanwhile, others hurt by the spill ended up getting much less.
A version of this story was co-published with The Washington Post.
The oil spill that was once expected to bring economic ruin to the Gulf Coast appears to have delivered something entirely different: a gusher of money.
Some people profiteered from the spill by charging BP outrageous rates for cleanup. Others profited from BP claims money, handed out in arbitrary ways. So many people cashed in that they earned nicknames -- "spillionaires" or "BP rich." Meanwhile, others hurt by the spill ended up getting comparatively little.
In the end, BP's attempt to make things right -- spending more than $16 billion so far, mostly on claims of damage and cleanup -- created new divisions and even new wrongs. Because the federal government ceded control over spill cleanup spending to BP, it's impossible to know for certain what that money accomplished, or what exactly was done.
Some inequities arose from the chaos that followed the April 20 spill. But in at least one corner of Louisiana, the dramatic differences can be traced in part to local powerbrokers. To show how the money flowed, ProPublica interviewed people who worked on the spill and examined records, including some reported earlier by the New Orleans Times-Picayune, for St. Bernard Parish, a coastal community about five miles southeast of downtown New Orleans.
Documents show that local companies with ties to insiders garnered lucrative cleanup contracts and then charged BP for every imaginable expense. The prime cleanup company, which had a history of bad debts and no oil-spill experience, submitted bills with little documentation or none at all. A subcontractor charged BP $15,400 per month to rent a generator that usually cost $1,500 a month. A company owned in part by the St. Bernard Parish sheriff charged more than $1 million a month for land it had been renting for less than $1,700 a month.
Assignments for individual fishermen followed the same pattern, with insiders and supporters earning big checks.
"This parish raped BP," said Wayne Landry, the chairman of the St. Bernard Parish Council, referring to the conduct of its political leadership. "At the end of the day, it really just frustrates me. I'm an elected official. I have guilt by association."
The economic benefits that rippled through St. Bernard Parish were seen in varying degrees throughout the Gulf. In the six months after the spill, sales tax receipts, a key measure of economic activity, rose significantly in eight of the 24 most affected communities from Louisiana to Florida, despite the national recession. Only one community, in Mississippi, saw its receipts dip significantly. Local governments also profited. A recent story by the Associated Press found that governments along the coast used BP money to buy SUVs, Tasers and other equipment not necessary to clean up oil.
According to sales tax collections, Louisiana made out better than anywhere. Sales tax collections from Plaquemines Parish rose more than 71 percent, while St. Bernard saw the biggest jump of all. The parish collected almost $26.8 million in sales and lodging tax receipts in the six months after the spill, almost twice as much as over the same period in 2009. Flush with cash from cleanup and claims, many fishermen bought new toys, boats and trucks. Sales at the nearest Chevrolet dealer rose 41 percent.
Some of the influx of money can be traced to the efforts of St. Bernard's parish president, Craig Taffaro Jr., a 45-year-old psychotherapist with a wrestler's build, a cue-ball head and a trimmed goatee.
Just days into the crisis, Taffaro did what many parish presidents did: He invoked a Louisiana law that allowed him to declare a 30-day emergency and handle the crisis without most normal government checks and balances. But Taffaro used his powers more broadly than most, saying that he wanted to put money back into the community. Unlike the leaders of other Gulf communities, Taffaro -- not BP -- chose the prime contractor that supervised the cleanup. He and his allies also decided which fishermen would be hired to put out boom and search for oil. At one point, Taffaro hired his future son-in-law to work in the finance department and help on the spill.
In some ways, parish residents seemed to view the disaster and BP's culpability as a way to recover from earlier blows. More than other coastal communities, St. Bernard bore the brunt of Hurricane Katrina, which flooded almost every home in August 2005. The population dropped almost in half, from about 67,000 in 2000 to about 36,000 in 2010, largely because people didn't come back after Katrina and the hurricanes that followed. Before the spill, the parish slashed its budget by 11 percent, cutting garbage collection, the fire department and mosquito control. There was just no money.
The spill changed that. Fishermen were paid to lay out protective boom, the floating material used to corral the oil. Contractors were hired to manage the cleanup and provide security. Claims money began flowing to people who said their lives had been upended by the crisis.
The parish government was among the first to benefit, snagging a $1 million check for oil-spill expenses. Parish employees went shopping for cameras, printers, a file cabinet, staplers, six pairs of children's scissors and 712 shirts emblazoned with the parish name. Some of the money also went to overtime pay for more than 40 parish employees, including three who claimed overtime for picking up dog food for the animal shelter. St. Bernard's homeland security director, David Dysart, a salaried employee and Taffaro's good friend, was paid almost $23,000 for working 497 hours of overtime in less than seven weeks. That meant he was working an average of more than 16 hours a day, including weekends.
As the money flowed, complaints spread. Some beneficiaries didn't necessarily suffer from the spill but had social or political connections. Subcontractors said those at the top of the cleanup creamed off money for doing very little, while those at the bottom earned much less for doing the actual work.
At first, everyone was angry with BP. But as the months wore on, some St. Bernard residents directed their frustration at Taffaro, blaming him for handing out jobs and money to a small group of insiders.
Meanwhile, Taffaro was attacking BP and the federal government in the media, appearing on TV alongside Gov. Bobby Jindal and testifying in Congress. His outrage was palpable. There wasn't enough boom, coordination or respect for the local government. BP wasn't making good on its obligations.
The pressure paid off. Taffaro at one point boasted that St. Bernard had doled out more BP cleanup money to commercial fishermen than any other Louisiana parish. His claim is impossible to verify, because neither Taffaro nor anyone else would provide details about the spending numbers.
BP gave only limited information to ProPublica, and declined to comment on allegations it had been overcharged. The U.S. Coast Guard, the federal agency most involved with overseeing BP's response, said the government and BP decided cleanup priorities together.
Taffaro and other St. Bernard officials refused to respond to the public-records requests ProPublica began filing in November. When asked again last week why the parish hadn't provided any records, Dysart said he would be happy to help but that filling the request would take time and cost a lot of money.
"I'm in the process of really, truly trying to assist you," said Dysart, who is also the parish interim chief administrative officer.
In response to questions submitted by ProPublica last month, Taffaro said through his spokeswoman that he can approve overtime for salaried employees in extenuating circumstances and that Dysart eventually decided to stop taking overtime. Taffaro said there was no law against hiring his future son-in-law because he was not yet married, and that paying overtime for picking up dog food was necessary because the spill had caused fishermen to abandon their dogs.
Taffaro also said that the tax receipt bubble was "a false economy," similar to what happened after Hurricane Katrina.
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Many companies and people earning big money from the spill had connections to parish powerbrokers, according to court documents, parish records and interviews done by ProPublica.
Amigo Enterprises Inc., which for years leased land to one of the busiest marinas in the parish, got in early. BP based the cleanup operation at the marina in Hopedale, which made sense. But the price Amigo charged BP for the land was astronomical. Amigo had been leasing the land for less than $1,700 a month from the Arlene & Joseph Meraux Charitable Foundation Inc., according to the nonprofit's most recent tax returns. The company billed BP more than $1.1 million a month, said BP spokesman Joe Ellis.
Amigo wasn't just any company. One of the owners was St. Bernard's powerful sheriff of 26 years, Jack Stephens, who also sat on the board of the Meraux Foundation. According to the most recent ethics form Stephens filed with the state, he earned more than $100,000 from Amigo in 2009.
Stephens' cousin Anthony Fernandez Jr., also Stephens' former chief deputy and one of his two partners in Amigo, said BP paid less than $1 million a month to Amigo for rent, but refused to say how much.
Fernandez also got a chunk of BP money for another company, Parish Oilfield Services LLC. That company hired off-duty sheriff's deputies to provide security for the spill, charging BP $45 an hour per deputy, Ellis said. The normal off-duty rate for the deputies is $30 an hour, according to the sheriff's office.
The company that benefited most from BP's checkbook was Loupe Construction and Consulting Co., Inc., a small, family-owned business in a nearby parish with few employees and a bare-bones website that misspelled the company name. On May 5, Taffaro chose Loupe to manage the cleanup in St. Bernard, a job that would eventually be worth as much as $125 million.
Taffaro said he selected Loupe after asking for proposals from several companies and because of its disaster experience. He also said he thought the company had experience responding to oil spills. The decision didn't sit well with some people.
"That company had no particular expertise in oil mitigation -- none," said Landry, the parish council chair. "But we've been kept in the dark on the entire operation. Pardon the pun, but we've been left out of the loop."
In other Louisiana parishes, BP chose the lead cleanup companies, all of them certified by the Coast Guard as official Oil Spill Response Organizations, meaning they had some experience responding to spills. But Loupe didn't have that certification. In fact, the company that would eventually manage more than 50 subcontractors and 150 vessels had no oil-spill experience at all. Its main job in St. Bernard had been helping rebuild levees.
Coast Guard Commander Dan Lauer said he wasn't familiar with what happened in St. Bernard Parish, but said he would "absolutely" want a certified company as prime contractor in a major oil spill.
At least two Oil Spill Response Organizations were eventually brought in to oversee some parish cleanup, but BP signed a master service contract with Loupe on June 17, after the parish had insisted for weeks that the company become the main contractor.
"I guess they figured they were stuck with us," said Randy Nunez, a lawyer for Loupe, adding that the company had taken "a leap of faith" by starting work without official BP approval.
Owner Paul Loupe had a long history of debts and lawsuits. Four lawsuits, three of which have been settled, accused him of not paying his bills after Katrina and Hurricane Rita, when he and another small Louisiana company joined up to clear debris in nearby Jefferson Parish, the company's only major experience responding to a disaster. Loupe's website says the two companiesperformed more than $100 million worth of work for Ceres Environmental Services Inc., the Minnesota-based company that hired them.
But much of that work was actually performed by layers of subcontractors, which is why Loupe was accused of being one of the "pass-through" companies that proliferated after the hurricanes. Workers at the bottom of the contracting chain earned so little for debris-removal work that the U.S. Department of Labor later ordered Ceres to pay $1.5 million in back wages to more than 2,000 laborers.
Paul Loupe referred questions to his lawyers. One, Karl Dix, said everyone was happy with Paul Loupe's work. "He worked tirelessly during that effort and really accomplished a lot," Dix said.
After Loupe was picked, there was a feeding frenzy to get hired by the company, which operated out of a family compound about an hour from St. Bernard. People with little connection to commercial fishing used old boats or bought new ones and signed up to work. Companies from Washington state, Nevada and Mississippi came to town. Contracts were fought over. Everyone wanted a piece, just as they did after Hurricane Katrina. Only this time, the federal government wasn't footing the bill; a reviled corporation was, and the prices reflected that.
"There was a lot of gouging," said David Northcutt, who worked for a Loupe subcontractor and has since sued for unpaid wages. "Everybody had their hand out, of course. It was a once-in-a-lifetime opportunity for a lot of people."
F.J. Campo, who ran the boat launch at Shell Beach that provided fuel for BP boats, said one man who had been trying to sell his fiberglass yacht in Florida brought it back to the parish, got it hired by Loupe, parked it behind the docks and came into the launch every nine or 10 days to bill BP for fuel for the generator.
"They used to hide it behind the docks over there, and it never worked," Campo said.
Small companies tried to find a way in the door, to tap the right connection to get hired.
In July, Loupe hired a Washington state company, Farrow Construction Specialties Inc., to set up marsh-washing systems on barges. Almost immediately, a Farrow consultant named Larry Howell, who had once pleaded guilty to a federal bank fraud charge, set up his own company with people from South Carolina, Texas and Arizona to take over the Farrow contract.
Tim Henson, who had years of experience cleaning up oil spills and worked with a company that partnered with Farrow, said Loupe positioned 13 or 14 skimmer boats around each marsh-washing barge, even though the barges themselves functioned as oil skimmers.
"BP was being billed for all the man hours of all those boats," said Robert Brown, an engineer who helped out on the project. "One would disappear to go take a break or take lunch. Then another one would fill in and do nothing. It was the Keystone Kops."
In setting up his new company, Howell turned to family as well. One subcontractor he hired was a small Mississippi company run by his mother's brother-in-law. It charged Howell $15,400 per month to rent each of three generators, which usually each went for $1,500 a month. It charged more than $18 a foot for wire that other contractors said cost at most $4 a foot, and charged $3 a mile for 2,240 miles of travel when the IRS standard business rate was 50 cents. The company also billed Howell more than $14,000 for 140 hours of labor to set up a single generator, a job that other contractors say should take only a few hours. Howell passed all those charges up to Loupe and BP.
During a squabble over the Loupe subcontract, Mike Turner, who had initially partnered with Howell and Farrow, said rumors began spreading that the FBI was investigating him. He hired a lawyer and called the FBI. He said he was told he was not being investigated, but he spent hours talking to a New Orleans-based FBI agent about allegations of payoffs and overbilling.
"I spilled my guts. So now, it's my understanding they are being investigated," said Turner, referring to the parish and the businesses that were hired for the cleanup.
The FBI agent declined to answer questions for this story. Howell couldn't be found for comment. The company he helped form moved out of its office in December without giving notice.
As the cleanup dragged on, Loupe faced a cash-flow problem. For help, Loupe turned to Park Investments Ltd., a local company that primarily develops shopping malls and other commercial properties. Park Investments and its related companies had done business with plenty of parish powerbrokers in the past -- Stephens, the sheriff, had been a partner in at least one development.
Although a search of court documents showed that Park Investments rarely made and recorded such loans, the company agreed to loan Loupe an unspecified amount of money. As collateral, Loupe put up all the BP payments due from its clean-up contract.
Park Investments and companies run by its president, Lewis Frank, and owner, Joseph Georgusis, are major political donors in Louisiana. And one of the politicians they frequently donate to is Taffaro, the parish president.
At a 2009 fundraiser for Taffaro, Park Investments gave $2,500, the legal limit in Louisiana. Three other businesses formed by Frank and Georgusis or their businesses -- they've been involved in at least 15 over more than 20 years -- contributed $2,500 each. Georgusis contributed $2,500. So did Georgusis' wife, Cheryl.
In essence, the cleanup company chosen by Taffaro was now being financed by some of Taffaro's biggest supporters.
Taffaro said he had no interest in the business practices of Loupe or Park Investments. Frank said Park Investments loaned Loupe money because of "business." He dismissed any connection between the loan and earlier donations to Taffaro as "coincidental at best."
"If you're trying to link something, the link doesn't exist," Frank said.
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St. Bernard was certainly not the only community where markups flourished.
In another Louisiana parish, a BP supplier hired more than 20 vessels a day, paying at most $2,500 a day for each vessel but charging BP $15,000 a day. The supplier pocketed at least $250,000 every day for months, according to someone who saw the bills.
Bills from another Gulf state showed that BP paid a subcontractor $36 an hour for workers to clean up oil along sandy beaches, according to the same person. The subcontractor hired a temp agency, which provided workers for about $14 an hour, leaving the subcontractor with the $22-an-hour difference. The temp agency then made its own profit, hiring workers for about $10 an hour.
By late August, the BP spill had shifted from an emergency response to a long-term recovery, and BP started pushing back on some bills it was receiving, including in St. Bernard, where far less oil had arrived than originally predicted.
On Aug. 21, Loupe delivered 139 invoices to Louisiana's main incident command post in Houma -- the first time the finance team said it had seen any of the invoices. All told, Loupe claimed BP owed it $34.7 million.
Over the following week, BP's finance team reviewed the 55 largest invoices. Team members found that all the invoices lacked information showing that BP had authorized the goods or services. All also lacked supporting documentation like timesheets. One in five had basic errors and omissions, such as differing daily rates for the same vessels, double-billing for the same equipment, and math errors.
Meanwhile, Loupe officials were demanding payment, and Taffaro was calling BP over the impasse. Despite the fact that the well was plugged, Taffaro declared another 30-day emergency -- his last -- meaning that for another month, he still controlled the cleanup.
On Saturday, Aug. 28, Paul Loupe, Taffaro and Dysart met with BP officials in New Orleans. Loupe, unable to pay his subcontractors, asked BP to pay him something within two days. BP officials refused. Loupe and BP then agreed to review the invoices together.
The meeting, agreement and invoice problems were outlined in a letter sent by the chief operating officer of BP's Gulf Coast Restoration Organization to Paul Loupe. The letter, obtained by ProPublica, was also sent to Taffaro.
"As we discussed at the meeting, all of the invoices reviewed to date lack certain critical information that, in accordance with well accepted business practices and BP's code of conduct, BP requires before it can approve an invoice for payment," the letter said.
BP also began balking at other bills. Parish Oilfield claimed to be owed $900,000 for sheriffs' deputies, BP's Ellis said. At $45 an hour, that meant the deputies had clocked as many as 20,000 hours since the spill.
If Parish Oilfield pocketed $15 for every hour worked -- given that the normal off-duty deputy rate was $30 an hour -- that would have meant $300,000 for the company itself.
In addition, Amigo Enterprises, run by the sheriff, his cousin and a third partner, claimed to be owed millions for equipment, rent and fuel at the Hopedale base.
Within days, the spill cleanup ground to a halt. Amigo refused to provide fuel for the cleanup. So did Campo at Shell Beach and another fuel dock on Delacroix Island, because Loupe hadn't paid past bills.
On Aug. 31, the sheriff's office signed an eviction notice for BP at the Hopedale site because BP had not paid rent to Amigo. "Landlord wants possession of his property," the notice said, without clarifying that the sheriff's company was the landlord. That night, Taffaro held a press conference, highlighting the eviction notice and accusing BP of not paying its bills, including more than $3 million owed to Amigo and more than $34 million owed to Loupe.
"We are calling on BP to step forward to make this right," Taffaro said.
BP paid Amigo. The cleanup resumed.
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While contractors fought for BP's cleanup money, commercial fishermen jockeyed for BP-financed jobs to replace their lost income.
As long as oil poured into the Gulf, the fishermen were unable to work and unqualified for most other jobs. Some went on anti-depressants. Others started drinking too much. Nearly all tried to join BP's "Vessels of Opportunity" program, which was supposed to provide a lifeline for commercial fishermen by hiring them and their boats for cleanup work. Boats could make $1,200 to $3,000 a day. Crew members often earned $200 a day, while captains earned as much as $360 a day.
The program was so lucrative, if disorganized, that people throughout the Gulf, including some nonfishermen, started fighting over the slots for boats. As complaints grew, Landry, the St. Bernard council chairman, and another council member pulled together a committee of fishermen and seafood dealers to create a list of bona fide fishermen. Then they drew names to set up assignments.
"That list was posted," Landry said. "And the next day everything changed. Craig Taffaro took over."
Using his emergency powers, Taffaro set up St. Bernard's version of Vessels of Opportunity. Now Taffaro, not BP, controlled who got the coveted jobs.
David Dysart, the homeland security director, said the jobs were handed out fairly through a public lottery. But a ProPublica reporter attended a meeting where Taffaro gave a job to a seafood dealer without a drawing. And dealers complained repeatedly that they weren't listened to when it came to hiring the parish's top fishermen. State officials also said the parish didn't follow up on an early request for a list of top fishermen.
Soon after the cleanup began, commercial fishermen also started complaining that a small group of favorites got more work than anyone else. ProPublica's analysis of parish checks paid to fishermen over the first six weeks, filed as part of a court case, seems to bear that out. A small group worked regularly, earning $24,000 to $34,000. Although Taffaro and Dysart said those fishermen performed additional jobs, the same fishermen got and kept those additional jobs throughout the entire cleanup. Meanwhile, Eric Melerine, a top fisherman from Delacroix Island, earned only $5,260 during those first six weeks. His younger brother Jason, also a full-time commercial fisherman, earned just $4,560. Another fisherman, Donald Campo, failed to get hired on the BP cleanup at all, despite signing up.
"Sometimes with things like that, it's all about who you know," Campo said. "It's about connections."
Knowing Taffaro was key to getting hired, fishermen said. Kim Alfonso said he was initially told he couldn't get his crab boat on the job. He protested.
"I said, 'Craig Taffaro said I can get it on,'" he recalled. "They said, 'Alright, come on in.' That's the way they did business. If you went in there and said, 'Craig Taffaro said this,' you was on."
Cisco Gonzales, who owns an air-conditioning company and runs the Louisiana Crawfish Festival, got his boat on the cleanup by lending it to his nephew, a fisherman whose own boat broke down. Many fishermen complained about Gonzales earning money from the spill, especially fishermen who couldn't get a boat hired. Gonzales said he felt bad about all the animosity against Taffaro.
"Me and him's good friends, to tell you the truth," Gonzales said. "With Craig, he's done a more than fair job in our community."
On June 1, fishermen showed up at a council meeting to complain about the selection system. They complained that some fishermen worked seven days a week, while others hadn't worked in 30 days. Stacy Campo, a fisherman's wife, said the inequities were ripping apart the community.
"You are the one we look to for the answers," she told Taffaro. "You are breaking up families and friends because you can't get an answer. Why is it that we have some big boats on the job that's been on the job since this started? My husband's been on rotation once. Why is that? We want the answers. This is going to kill a community that has been together for hundreds of years."
Taffaro promised to fix the job list and make sure assignments were fair. He also emphasized that St. Bernard was handing out more money to the fishing industry than any other Louisiana parish. In the next two weeks, he said, parish fishermen would earn $4.5 million working for BP. By early September, that would reach $7 million.
"That's the result of the pressure that we're putting on them," Taffaro told the audience. "Believe me, BP would rather do none of this."
One fisherman complained that BP was putting absurd amounts of money into the parish and said he wanted his own piece of the action.
"This is ungodly amounts of money," Taffaro agreed. "Many people are making more money than they've ever made in their entire lives. I don't have a problem with that, and I agree with you: that I want everybody to share the wealth in this situation."
At the end of the meeting, Landry asked Taffaro for an accounting of how the parish had spent the BP money.
"Not a problem," Taffaro replied.
But Taffaro and the parish turned over only some of the records, despite four public-records requests by Landry and the council clerk. Landry had to get a court order to obtain more. The council shared some records with ProPublica; others were in the court file.
The system featured bizarre incentives and rules. It didn't differentiate between those who got cleanup jobs with BP and those who didn't. The amount people received for their initial six-month emergency claims was based on whatever paperwork they decided to submit, not on their actual losses. The final claims formula seemed to reward fishermen who stayed home after the government fishing bans were lifted and punished fishermen who returned to work.
One man who earned $67,000 in 2009 fishing crabs and hunting a swamp rat called nutria got $100,000 for his six-month emergency claim. That was on top of $90,000 he earned working on the cleanup and $20,000 he received in initial BP claims. In the eight months after the spill, he earned a total of $210,000, more than three times as much as he earned in all of 2009.
The distributions seemed crazily disproportionate.
Thomas Gonzales, who said he filed $90,000 in taxable income in 2009, received only $22,000 in his six-month payment. "They're giving the money to the young generation," said Gonzales, who is 73. "They figure I got one foot over the hole, the other one on the edge."
Jason Melerine, 28, who said his income was about $90,000 in 2009, received a six-month emergency compensation check for $180,000. To support his claim, he submitted invoices showing that his boat sold $280,000 worth of seafood the year before, an amount that didn't reflect his expenses.
His brother Eric Melerine, who earned $111,000 in 2009, received just $60,000. To support his claim he used his 2009 tax return, which did reflect his expenses.
Eric Melerine's deckhand Mikey Labat, who made about $70,000 in 2009, initially received $6,900 for his six-month claim. His wife, Laura, was so upset that she filed an appeal and got the family another $18,000. Later, after hearing rumors of waitresses and hairdressers earning big money, she said she went to the claims office and sarcastically asked if she could file her own claim because her husband wasn't paying her an allowance for cooking and cleaning.
"They said, 'Go ahead, file a claim,'" Laura Labat said, adding that she didn't.
Many fishermen fretted that businesses that were suffering from the recession, not the spill, were getting BP money. A hairdresser at Dorene's hair salon received $8,000 for her emergency claim. Waitresses at the World of Wings Café and Wingery received between $5,000 and $7,000; the restaurant's owner got $50,000. A valet car parker at a five-star hotel in New Orleans that was 98 percent full received $1,000.
Felesia Carter, a manager at St. Bernard's only off-track betting parlor, said she heard customers talking about how they were gambling away claims money. Her business was so good, she said, that employees worked overtime and weren't allowed to file for claims.
"I don't understand how BP is just giving its money out like this," Carter said. "Give it to the people who deserve it."
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In September, Randy Nunez, one of Loupe's lawyers, invited people to an event hall in New Orleans' historic warehouse district to raise money for Craig Taffaro's re-election campaign, two invitees said. Nunez did not return later calls from ProPublica.
The stakes are high for the October election, because the parish council recently bumped the next president's salary from $70,000 to $128,000, a hefty sum in a community with a median household income of about $38,500 a year, about $13,500 below the national median.
More than 200 people showed up for the fundraiser at The Chicory, including Paul Loupe and his wife, witnesses said. Records filed by Taffaro's campaign committee show that he pulled in $207,400 -- more than his combined donations from the previous two years. No other president or presidential candidate in St. Bernard has ever reported raising that much money in a single night, according to Louisiana records available online.
At least $45,800 of that money came from people and companies that ProPublica has linked to the cleanup effort, including Loupe, Nunez's law firm, Park Investments and people and businesses connected to Park. The amount is likely higher than that, but no list of companies that worked on the spill is available for comparison with Taffaro's campaign filings.
Through his spokeswoman, Taffaro said all of the contributions were legal.
Loupe is now enmeshed in a battle with BP over what it says it is owed. As of November, the last time the company's lawyers spoke to ProPublica, Loupe had been paid $25 million, but it claimed to be owed $100 million more. Some contractors in other parishes claim that BP owes them millions, too.
Is BP shortchanging contractors? Are contractors trying to scam BP? Because none of the records are public, it's impossible to know for sure.
The last interview ProPublica had with Taffaro was in November. He complained that the BP emergency claims were not distributed fairly and said BP and the federal government should have listened more to local authorities.
When pressed about how he selected Loupe and picked the boats for cleanup, Taffaro abruptly ended the interview.
"We're done," he said, escorting the reporter to the door. "I will not allow you to do this to St. Bernard Parish."
ProPublica's research director, Lisa Schwartz, and researchers Kitty Bennett, Sasha Chavkin and Liz Day contributed to this report.
Spillionaires Revisited: Gov't Official's Associates Got Big Contracts After the BP Oil Spill
Craig Taffaro, president of Louisiana's St. Bernard Parish, has denied allegations in an earlier ProPublica story, but new reporting shows that longtime associates got lucrative spill-related work—and then they helped raise money for his re-election.
Last month, Craig Taffaro Jr., the president of Louisiana's St. Bernard Parish, lambasted a ProPublica story while testifying before a congressional committee.
The story, published in April, described how some local powerbrokers and others, aided in part by Taffaro, cashed in after the BP oil spill, winning lucrative jobs related to the cleanup effort and earning the nickname "spillionaires." The story also showed how some who profited from the spill then donated to Taffaro's campaign. On June 2, Taffaro told the House Committee on Oversight and Government Reform that the story was "a hatchet job" with "no factual data."
New documents obtained by ProPublica, however, show that BP's auditors repeatedly questioned bills submitted by St. Bernard contractors, including three with ties to Taffaro, based on suspicions that they had overcharged or charged for permanent parish improvements unrelated to the spill.
Other reporting shows that six of Taffaro's associates got BP work last summer potentially worth millions of dollars. A seventh, Taffaro's biggest campaign donor, loaned money to help the parish's main spill contractor—a company picked by Taffaro. These seven men subsequently joined Taffaro's re-election committee. One, an old friend of Taffaro's who landed the BP catering job, solicited others working on the spill for donations to Taffaro's campaign, according to an email sent on the man's behalf.
Taffaro, 46, a marathon runner and avid bicyclist who once offered to wash the feet of parish employees in an attempt to show humility like Jesus Christ, is well known for his take-charge personality in St. Bernard. After the spill, Taffaro liked to tell local fishermen that the buck stopped with him. As parish president, he declared a state of emergency, allowing him to suspend typical government checks and balances on contracting, such as competitive bidding. He picked the main parish cleanup contractor without a standard bid process and directed who got other jobs, according to a parish official and a BP contractor familiar with the cleanup.
Taffaro's critics say his maneuvering hurt local businesses and fishermen affected by the spill who were not connected to parish powerbrokers.
"If BP could have taken all the millions they wasted on these people and given it to the fishermen, I wouldn't be complaining," said Wayne Landry, a parish councilman and candidate for sheriff who went to court to try to find out how parish cleanup money was spent.
Taffaro did not respond to questions from ProPublica. His interim chief administrative officer, David Dysart, and spokeswoman, Karen Turni Bazile, said BP picked all the contractors in St. Bernard except for the main contractor. They denied that Taffaro had any influence on who did what.
BP officials declined to speak publicly about what happened with the oil spill in St. Bernard parish. But one of BP's main consultants in St. Bernard, Pat Touchard, who worked there for almost six months, said BP included input from the parish in deciding who got work. Touchard also said parish leaders were involved with choosing the contractor for Camp Hope, where some oil-spill workers stayed, and the contractor who built the parish's command center, both Taffaro associates. An internal BP billing document shows the parish actually handled the billing for the Camp Hope job.
But Touchard also said he did not think Taffaro, Dysart or anyone else engaged in favoritism. "I'd look anyone square in the eye and say I don't have any evidence of that," he said.
Touchard, who is from St. Bernard, has his own connections in the parish. His wife worked as Dysart's secretary before Taffaro was elected parish president in 2007. She also was a BP consultant in charge of housing after the spill and donated $300 to Taffaro last fall. Touchard denied any conflict.
"I was never involved in parish politics," he said. "I'm a retired state trooper. I never really worked for the parish. ... I'm a hired gun. I go from emergency to emergency."
Among the largest contracts given to a Taffaro associate was for providing food to St. Bernard spill cleanup sites, according to BP records and interviews. In late May 2010, Jim Besselman Jr., a longtime friend of Taffaro's, was put in charge of catering.
Besselman—a financial-services executive who with his wife helped run two restaurants in New Orleans, Ernst Café and its upstairs neighbor, The Chicory—had known Taffaro for at least 13 years. He served as chairman of the boardof a nonprofit home for teenage girls that Taffaro, a therapist, started in 1998.Besselman also loaned Taffaro $2,500 for his campaign for a parish council seat in 1999, campaign finance records show.
The Chicory billed BP more than $13 million for catering between June and September 2010, according to BP records. (Much of the money went to other restaurants that acted as subcontractors.) Auditors raised questions about excessive costs and recommended that tighter controls be put on who was eligible for meals. They also suggested that BP review market rates for similar services, records show.
Chad Blanchard, who runs Charlie's Restaurant and Catering in St. Bernard, said he was the lead caterer for BP in St. Bernard before the job was given to Besselman. Blanchard said he charged BP less than $27 a day for three meals per person. The Chicory charged at least $48 a day for three meals per person, invoices show.
"If BP would have stayed with me, I would've saved British Petroleum a couple million for sure," Blanchard said.
Dysart, Taffaro's chief administrative officer, said BP representatives explicitly requested Besselman because they were not happy with his predecessor's food. Touchard, the BP consultant, was not familiar with how Besselman was pickedbut said a central contractor was needed to handle the large amount of meals.
Two other men who later served on Taffaro's re-election committee got big construction jobs related to the BP spill: Buddy Turnage and Raymond Boasso, the brother of former state senator Walter Boasso.
Jerry Graves, who was director of the parish government office that handled permitting for new construction, said Taffaro told him that Turnage's companywas the contractor for the large command center on the main cleanup site. Graves estimated that the building cost at least $800,000, given its size.
Dysart said BP directed the job to Turnage. BP consultant Touchard, however, said the parish government led the project. No BP records made available to ProPublica indicate that BP questioned the charges.
Raymond Boasso got the job of refurbishing Camp Hope, a volunteer camp set up after Hurricane Katrina, a contract worth about the same amount as the command center, Graves said.
As of Aug. 22, the parish had charged BP $1.5 million for rent for spill volunteers staying at the camp and for refurbishing the building, BP records show. Auditors recommended paying the bill and did not challenge specific charges, but they suggested terminating the contract, a rare step. The record said only 80 people were staying there. (Three weeks after the auditor's note,The Chicory billed BP for meals for 242 people at the camp, invoices show.)
Two other members of Taffaro's re-election committee—Tim Thomasson and Thomas Bayham—held top posts at companies tapped for substantial cleanup roles. Thomasson is a managing partner at Public Safety Management Group, which was hired to provide training for spill workers and to help run the cleanup. It's not clear how much the contract was worth, and none of the records available to ProPublica indicate that anyone ever challenged the company's bills. Thomasson was named the operations section chief for the main parish cleanup site, according to a flowchart of parish cleanup management.
Bayham is the chief administrative officer at U.S. Environmental Services(USES). Together with a sister company, USES was put in charge of the parish Vessels of Opportunity program, which hired fishermen to clean up oil. USES and its sister company had started supporting Taffaro in 1999 with small donations, campaign finance records show. USES was a Coast Guard-certified Oil Spill Response Organization, a designation that helped it win tens of millions of dollars in contracts along the coast, but the company had a more limited role in St. Bernard, paying the checks of the fishermen and administering the program. Available BP records indicate no one questioned USES invoices in the parish. Taffaro was ultimately in charge of picking the fishermen, he has said in interviews and meetings in the past.
In September, as the spill cleanup wound down, Taffaro, who is up for re-election in October 2011, held a fundraiser.
The event took place at The Chicory, and Besselman, one of his business partners, Anthony Macaluso Jr., Raymond Boasso, Turnage, Thomasson andBayham were on the host committee. So was Joe Georgusis, one of Taffaro's biggest donors. One of Georgusis' companies helped bankroll Loupe Construction and Consulting Co., the main parish oil-spill cleanup contractor, after it had trouble paying its bills. (In late August, BP sent a letter questioning more than $28 million in Loupe invoices, saying they lacked proper documentation. Newly obtained BP documents show that one of those invoices, for a vessel called Brazos Express, billed almost $1.5 million even though auditors found "no proof ... that the vessel was used.")
The fundraiser invitation suggested a contribution of $1,500 per couple, and $2,500 per group of four. (Under Louisiana law, contributions are limited to $2,500 per person or company per election cycle to candidates for St. Bernard parish president.)
On Sept. 19, an email was sent out on behalf of Besselman to 23 recipients, along with the invite. The recipients primarily were restaurants that had been given spill catering work, known as "rotations."
"The upcoming election is in roughly one year, but by having a successful fundraiser and with Craig's high favorability rating this will greatly increase his bid for reelection," Besselman said. "I look forward to seeing you at the fundraiser. Once again, please understand that your contribution does not enhance your rotation and or your lack of participation does not hurt your rotation."
Most recipients donated, campaign contribution records show. Three said they felt obligated to do so because of the email from Besselman and because they got spill work; one said he did not feel obligated and did not donate; others could not be reached. Besselman did not return repeated calls from ProPublica, but Dysart and Bazile said Besselman's email clearly indicated that donations had nothing to do with spill work.
The fundraiser, on Sept. 29 raised $207,400, the most ever collected by a St. Bernard politician in one night, according to records available online, which stretch back to 1999. It was also more than Taffaro raised in the previous two years combined. The host committee members, along with their family members, their business partners and their different companies, donated $47,500, or almost 23 percent of the total.
Companies or people tied to the spill cleanup, including several of the catering subcontractors, gave an additional $59,300.
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