“The courts,” he said, “of course.”
Three months ago, at the end of a chaotic legislative session, there was an extraordinary exchange between two Louisiana state representatives, an exchange that, until now, had been completely unreported. The discussion wasn’t private. It occurred on the House floor, streaming live on the internet and on television. But there is a good reason the media didn’t find it newsworthy at the time. Ostensibly, the discussion centered on a mundane, seemingly uncontroversial, one-page bill that tightened up language about indemnification, the kind of routine legislative housekeeping that reporters typically ignore.
In order to understand why Barbara Norton’s (D- Shreveport) exchange with Ray Garofalo (R- Meraux) was, in fact, extraordinary, you need to know the backstory. Rep. Garofalo carried the bill, SB 129, to the House floor on behalf of State Sen. Bret Allain (R- Jeanerette), so although Garofalo wasn’t the bill’s author, he was its sponsor, tasked with explaining and defending it to his colleagues in the House.
Barbara Norton, almost immediately upon its introduction, made it clear that she was utterly confused by it, which is understandable. It is a confusing part of Louisiana property law, filled with terms and expressions that no one uses in everyday life. But in the simplest terms possible, the bill states that if you own a property that is only accessible by crossing through someone else’s waterway, you have to pay the owner of that waterway for any damage that you “may occasion.”
“Give me an idea of what you think the damage could be,” Norton asked Garofalo.
“If, for instance, there’s a dredging company that’s coming through to dredge- not dredging company, drilling company,” Garofalo responded. “Or a surveying company that’s passing through a waterway that’s on your neighbor’s property. If that dredging company causes any damage while they’re passing through, they have to indemnify that neighbor for any damage caused when they’re passing through his property.”
Norton then asked him if he was familiar with any other state with a similar law.
“I didn’t research any other states,” he said.
“There’s no other state?” Norton asked.
“No, but it’s really common sense,” he said. “Because if you’re passing through your neighbor’s property, and you damage it, you have to fix the damage. That’s what it’s saying.”
Norton then asked whether the bill set any caps on damages. “Let’s say it’s a million dollar cost,” she said. “If the person who owns that land says it’s a million dollar cost, who validates that it is a million dollars?”
Without skipping a beat, Garofalo responds, “the courts.”
“The courts,” he said, “of course.”
In less than six minutes, Ray Garofalo, one of the state’s fiercest opponents of litigation against oil and gas companies for the damages they inflicted on Louisiana’s coast, unwittingly made the case against Big Oil like a seasoned environmental attorney and, in so doing, revealed his utter and complete hypocrisy.
Just last year, at a meeting of the House Committee on Natural Resources, Garofalo repeatedly said the oil industry would “voluntarily pay” for the damages once the governor stopped threatening to sue. It’s nonsense. “(Garofalo) ignored the fact that the parishes have already filed lawsuits,” wrote Anne Rolfes for The Lens, “and he had no answer for the obvious counterpoint: that the oil industry has had over 50 years to step forward and voluntarily pay for what it has destroyed.”
In 2014, Garofalo voted to retroactively kill the Southeast Louisiana Flood Protection Authority-East’s historic lawsuit against 97 oil and gas companies, and even though his next election was more than a year away, Garofalo pocketed campaign contributions from BP’s political action committee, Atmos Energy, Encana Oil and Gas, Exxon-Mobil, and Phillips 66, among others. He’s received tens of thousands of dollars from the oil and gas industry. After narrowly winning re-election, larger checks from Big Oil began pouring in, along with a generous donation from the Koch Brothers.
Among Louisiana Republicans, Garofalo is the rule, not the exception. This isn’t trivial.
There are real-world consequences: Regulatory capture, environmental degradation, ecological destruction, public health crises, catastrophic weather events. Simply put, Louisiana cannot sustain itself solely as a petrochemical state, and overwhelmingly, the people of Louisiana understand this.
The vast majority of Louisianians rank coastal restoration as a very important issue; the vast majority support the litigation against the oil and gas industry to force them to repair the damage they have admitted doing to our coast, and relatedly, the vast majority believe that oil and gas companies- not just the taxpayer- should foot the bill.
What explains the disconnect between public policy and public sentiment?
It’d be easy to point to the hundreds of thousands of dollars that the industry contributes to state lawmakers and their associated political action committees and attribute governmental failure to corruption, but that would miss an important part of the story.
In Louisiana, the oil and gas industry sells two products: Energy and fear.
In 2010, during the immediate aftermath of the worst environmental disaster in American history, President Obama placed a temporary moratorium on the issuance of new offshore drilling permits. Four years later, in a report for The Independent of Lafayette about U.S. Sen. Mary Landrieu’s connections to the oil and gas industry, I wrote about the actual consequences of the moratorium (emphasis added):
When the Obama administration placed a temporary moratorium on the issuance of new deepwater offshore drilling permits, a moratorium that ultimately affected only 21 of the more than 3,600 platforms in the Gulf, the industry went apoplectic. Lawsuits were filed. Rallies were staged, with oil and gas companies paying and busing in employees to join the protests. Economists who worked for the industry issued hastily reasoned and apocalyptic reports suggesting that the moratorium would result in the loss of 30,000 jobs in Louisiana, more than half of the entire industry. The moratorium, said Sen. Landrieu, “could cost more jobs than the spill itself.”
“It could affect 330,000 people in Louisiana alone,” she told Interior Secretary Ken Salazar during a Senate committee hearing.
A year after the spill, only 343 oil rig workers were able to collect claims as a result of losing their jobs during the moratorium. Indeed, according to an analysis by Harvard Professor Joseph Aldy in a paper titled “The Labor Market Impacts of the 2010 Deepwater Horizon Oil Spill and Offshore Oil Drilling Moratorium,” despite the sky-is-falling narrative that had been sold to us, “the most oil-intensive parishes in Louisiana experienced a net increase in employment and a net increase in wages.”
There is no question that the Louisiana economy is heavily reliant on oil and gas. Some may prefer a different word: Addicted. Too often, however, our dependency blinds policymakers and creates opportunities for the industry to monetize fear to the detriment of the public.
Oil and gas remains one of the most profitable businesses on the planet. “According Sageworks, as of 2013, the most lucrative type of businesses today are companies that extract oil and gas,” The Wall Street Survivor reported earlier this year. “The net profit for an oil and gas extraction company is around 24.1%.”
Currently, there are at least 93 billionaires whose fortunes were made in the energy industry. Notably though not surprisingly, the list doesn’t include a single citizen of Louisiana, whose only resident billionaire is a publicly-subsidized professional football team owner.
Earlier this year, while Lafayette and Lake Charles both worried about the ways in which the declining price of a barrel could stifle local development and job creation, Exxon-Mobil reported a quarterly profit surge of 122%.
Like the oil, the real wealth produced by the industry in Louisiana is exported elsewhere.
We are in an abusive relationship, and we have been for several decades. The abuse persists not just due to complicit politicians but, perhaps even more importantly, due to the intellectual dishonesty and moral bankruptcy of our own business lobby.
Consider this: On Feb. 20, 2014, Don Briggs, the President of the Louisiana Oil and Gas Association (LOGA), was deposed under oath.
During the deposition, Briggs was questioned by attorney Rock Palermo about what proof he had that a lawsuit would cause oil and gas companies to leave the state, a claim that Briggs and other business lobbyists had been repeatedly making to the media.
Palermo: “Do you have any evidence that any oil company considers Louisiana’s legal climate in deciding whether they will drill for oil and gas in Louisiana?”
Palermo: “Is it your opinion that oil and gas companies are leaving Louisiana because of the threat of lawsuits?”
Palermo: “Which oil companies have left Louisiana because of lawsuits?”
Briggs: “I don’t know.”
Palermo: “Give us a name of an oil company that has refused to do business in Louisiana because of lawsuits.”
Briggs: “I don’t know any.”
Palermo: “You can’t name a single company that has not drilled because of lawsuits?”
It is worth noting: The industry, by its own admission, claims to be responsible for at least one-third of the damage inflicted on the Louisiana coast, which translates into tens of billions of dollars. Robert Bea, the former chief engineer for Shell Oil, testified that the industry’s “canals and waterways, dug for shipping, barge traffic, drill rig access, and pipeline construction (contributed to) degradations in the natural defense against hurricane surges and waves in coastal Louisiana.”
These companies ravaged our vulnerable coast, which makes millions of people much more vulnerable to severe weather events. They’ve pillaged our natural resources for decades and made untold trillions in wealth. They have convinced Louisiana’s business lobbyists that they very well may abandon the billions of dollars in infrastructure they’ve built in Louisiana because of some sort of moral outrage over legal fees.
Drop the lawsuits, they tell people like Ray Garofalo, and we’ll pay our fair share. Trust us. We may be billionaires whose fortunes were built by selling your natural resources, but we’re not greedy, like those trial lawyers.
It’s absurd, a form of Stockholm Syndrome.
Three years after Don Briggs’s deposition, Melissa Landry, the head of an organization called Louisiana Lawsuit Abuse Watch and the spouse of a former executive at the Louisiana Association of Business and Industry (LABI), continues to make the same bogus argument, most recently in a letter to the editor of LaPlace’s L’Observateur.
“Deep pocket justice,” she writes. “That seems to be the flawed philosophy behind the ongoing legal attack personal injury attorneys are waging against Louisiana’s oil and gas industry.”
Landry has spent the better part of the last decade on a mission against “trial lawyers,” which is typically employed as a rhetorical device, a red herring, and a way of deflecting criticism from the industries and interest groups that bankroll both LABI and her organization. In reference to the SLFPAE’s case, she writes, “The suit sought to cast blame on the energy industry for Louisiana’s coastal land loss problems simply because the levee board wanted more money for flood protection projects and the industry was perceived as most able to pay. The levee board’s flawed legal filing asserted a smorgasbord of legal theories apparently intended to bypass the inconvenient need to show that the defendants in the case actually caused the damage the lawsuit supposedly sought to remedy.”
This is patently false.
According to the Natural Resource Defense Council (emphasis added), “Scientists working for oil and gas interests concede that 36 percent of the marshland subsidence is due to their employers’ activities. The U.S. Department of the Interior says the industry’s responsibility lies somewhere between 15 percent and 59 percent. Louisiana State University wetlands expert R. Eugene Turner has suggested that the figure is closer to 90 percent.”
Two months after Landry’s letter was published in L’Observateur, she submitted an almost identical column for publication on The Hayride, a far-right blog site. This time, however, Landry added another paragraph (emphasis added):
These actions (litigation) will only continue to move us in the wrong direction and further weaken our already struggling state economy. Over the last two years, more than 20,000 Louisiana workers have lost their jobs. Today working families are paying $1,500 more in taxes than they did just a couple of years ago. By and large, we are paying more and earning less. Our families are struggling, and yet, the governor continues to focus his agenda on creating more lawsuits, more taxes and more barriers to economic growth. It is time to change course.
Landry’s argument isn’t just specious; it’s factually incorrect. Landry’s source appears to be herself. She made the same claim in a post on the Chamber of Commerce affiliated blog, Louisiana Record, adding that “Unemployment is up.” There’s no other way to put it: This is a flat-out lie. Louisiana’s unemployment rate is higher than the national average, to be sure, but it has been ticking downward during the last two years.
On the day John Bel Edwards took office, in January of 2016, there were 11,000 more unemployed Louisiana residents than there are right now. “Data released on Friday, July 21, 2017, by the Bureau of Labor and Statistics (BLS) shows that the total not-seasonally adjusted nonfarm jobs increased by 21,600 from June 2016, bringing the new total to 1,990,600,” reports the Louisiana Workforce Commission. “This figure represents the largest over-the-year increase since February 2015.” All nine of the state’s metropolitan areas have decreased their unemployment rates during the last year.
Landry’s suggestion that “working families are paying $1,500 more in taxes” also appears to be pure conjecture. Working families are paying more in sales taxes, but that isn’t a consequence of the threat of litigation against oil and gas companies. It is a direct result of eight years of the disastrous economic policies of former Gov. Bobby Jindal and the intransigence of organizations like LABI to negotiate commonsense tax reform.
The data is undeniable. For eight years, Louisiana gave away as much as it could to the private sector, then, to no one’s surprise, the state found itself with a downgraded credit rating, a stagnant economy, and a structural deficit. The notion that increased sales taxes were caused by the mere specter of litigation against mega-billion dollar corporations isn’t just wrong; it’s absurd and offensive.
“Give us a name of an oil company that has refused to do business in Louisiana because of lawsuits,” Rock Palermo asked.
“I don’t know any,” said the head of the state’s oil and gas lobby, under oath.