How BP Hilariously Locked Itself Into Billions in Oil Spill Payments

Last night, 60 Minutes aired a report on how BP is trying to get out of a contract that has forced the oil giant to pay billions in reparations stemming from the Deepwater Horizon oil spill, even to people who weren't directly affected by the disaster. The funny thing is that BP has no one to blame but itself.

After the oil spill, BP—as it scrambled to stem a PR disaster—entered into an agreement with lawyers representing Deepwater Horizon victims that said the company would pay money to any business owner in Alabama, Louisiana and Mississippi whose business suffered a loss in the year of the spill before rebounding the next year. The catch is this: a claimant doesn't have to prove that the business lost money because of the oil spill, only that it lost money during the covered time period.

This has led, by the company's own admission, to BP being used as an ATM by people whose businesses were not even remotely directly affected by the spill, if at all. And this wasn't tricky lawyering on the part of the plaintiffs' lawyers either: the 60 Minutes report makes clear that BP's lawyers were well aware of the language in the agreement, but didn't think that it would become a problem.

Now, though, it has definitely become a problem, so much so that BP sent its vice president to essentially cry on the lap of CBS' Scott Pelley. A court appointed mediator has stuck to a strict reading of the contract's language and has authorized billions of dollars in payments on behalf of BP, which is fighting (to no avail) in appellate court to have the deal struck down.

The oil company—which makes a chicken-and-egg argument about "proof" in the piece—says it will take its case to the Supreme Court if necessary. But in the meantime 60 Minutes is asking the type of question you would expect from a "balanced" news organization: "Are some Gulf Coast businesses exploiting BP?"

To which we reply: hopefully.

[image via Getty]