Senate Dems Seek Probe Into Transocean’s $1 Billion Shareholder Payout
Monday, May 24, 2010 at 3:04 pm
Transocean Ltd., the Swiss company operating the Deepwater Horizon oil rig when it blew up last month, raised plenty of eyebrows last week when it announced its plan to pay out $1 billion in dividends to shareholders.
“It’s heartwarming to see that Transocean, the same company that rushed to limit its liability in the Deepwater Horizon rig explosion, seemed not to hesitate at all when it came to the decision to distribute its profits,” one maritime expert wrote of the plan.
Today, 18 Senate Democrats took the scrutiny a long step further, asking the Justice Department to investigate whether those payouts are appropriate “at a time when [the company] may be responsible for financial damages related to the massive oil spill in the Gulf of Mexico.”
“Transocean’s stockholders,” the lawmakers wrote in a letter to Attorney General Eric Holder, ”should not take huge profits from polluting our country’s Gulf Coast.”
We are concerned that such action to quickly move money out of corporate coffers to individual investors may make it more difficult to pursue liability claims against the company. Families of those who died in the disaster, the fishing industry that has been devastated by the oil spill and the governments that have worked full-time to clean up this spill deserve better. Transocean has also reported that it expects to make a $270 million profit on its insurance policy for the Deepwater Horizon, since the rig was insured for more than it was worth.
The letter, spearheaded by Sen. Ron Wyden (D-Ore.), also drew the support of Democratic Sens. Pat Leahy (Vt.), Charles Schumer (N.Y.), Tom Harkin (Iowa), Robert Menendez (N.J.), Mark Begich (Alaska), Byron Dorgan (N.D.), Patty Murray (Wash.), Jeanne Shaheen (N.H.), Bill Nelson (Fla.), Mark Pryor (Ark.), Mark Udall (Colo.), Jeff Merkley (Ore.), Max Baucus (Mont.), Amy Klobuchar (Minn.), Michael Bennet (Colo.), Blanche Lincoln (Ark.) and Robert Casey (Pa.).
Of note, Transocean is not exactly known for its corporate citizenship. Until recently, the company was based in Houston, but officials moved the headquarters to Switzerland “to avoid paying higher corporate taxes.“
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