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$100-million suit targets BP brass over mishaps Add to ...

Canadian ambassador to Washington Michael Wilson is among 34 current and former BP PLC directors and executives named in a $100-million-plus (U.S.) lawsuit, alleging corporate waste and reckless breach of duty over the Prudhoe Bay pipeline spill and other mishaps.

Mr. Wilson, federal finance minister from 1984 to 1991 and architect of the goods and services tax, was a BP director from 1998 to early 2006, when he became Canada's top U.S. envoy.

The lawsuit, filed this week in Alaska Superior Court, alleges that long-time chief executive officer Lord John Browne, Mr. Wilson and the others should be held responsible for hundreds of millions of dollars worth of cleanup costs, fines and a crippling blow to its reputation.

The allegations have not been proved in court.

Bernie Etzinger, a spokesman for Mr. Wilson, said the ambassador would not comment on the lawsuit and referred all calls to BP.

"We don't comment on ongoing litigation," said Daren Beaudo, a BP spokesman.

In August, BP was forced to shut a key pipeline, taking off-line indefinitely more than half of the 400,000 barrels a day of oil it produces from the largest U.S. oil field. All but 50,000 barrels a day of that output has since been restored.

The British-based company is facing a swirl of criminal and civil probes over the Alaska spill, allegations of price fixing in the U.S. propane market and safety problems following a deadly blast at its Texas City refinery.

The defendants allowed "imprudent, improper and even illegal activities" on their watch in their eagerness to cut costs, boost revenues and temporarily increase BP's reported results, a 110-page statement of claim alleges.

The lawsuit alleges that BP cut corners and skimped on maintenance and repairs, contributing to the corrosion problems now plaguing its Prudhoe Bay oil field.

All the while, the company maintained the veneer of an "exceptionally progressive, highly ethical and environmentally sensitive corporation" through a massive advertising and public relations campaign, according to the statement of claim. The directors and executives paid themselves lucrative salaries and fees, based on the flawed image the company presented to shareholders and the public, the lawsuit alleges.

The so-called "derivative lawsuit" was filed by Unite Here National Retirement Fund of New York and Jeffrey Pickett of Alaska, an individual investor, on behalf of BP. Any monetary judgment in the case would go to the company, not shareholders. The court could also order change in BP corporate practices.

"The challenges of the case shouldn't be underestimated," William Lerach, the plaintiffs' lawyer said in an interview from London. "But BP's behaviour has been atrociously bad, across a wide spectrum of events in North America. [Prudhoe Bay]is not an isolated incident.

It's multiyear, multidimensional bad behaviour."

Follow on Twitter: @barriemckenna

 

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