BP Pollution Tiff Hits Chicago Bond Underwriters
Date: 06-Aug-07
Country: US
Alderman Edward Burke, chairman of the city's finance committee, informed the city's chief financial officer in a letter dated Thursday that he will cut off Goldman, Sachs & Co. and Bank of America from participating in city bond sales and other city business due to interlocking relationships between the firms and BP's board of directors.
BP's board chairman is Peter Sutherland, who is also chairman of Goldman Sachs International, according to BP's Web site. Dr. Walter Massey serves on both BP's and Bank of America's boards.
As reasons for his decision, Burke cited reports that the refinery expansion would "significantly increase the amount of toxic waste dumped into Lake Michigan," as well as BP's refusal to appear before a joint committee of the Chicago City Council.
He added in the letter that the firms will be refused city business until "BP exhibits its willingness to meet its obligation to clearly exhibit its respect for the city council and its committees, and BP demonstrates its appreciation for the environmental concerns ..."
Scott Dean, a BP spokesman, said the oil company did not receive an invitation to the council meeting, but was talking to a number of city officials about the Whiting, Indiana, refinery and the company's plans to protect the lake.
Bank of America spokesman Scott Silvestri said the firm understands "the valid environmental concerns of the mayor and Alderman Burke," adding that the firm values its business relationship with the city.
A spokesman for Goldman Sachs declined to comment.
There were no pending bond deals involving Goldman Sachs and Bank of America that would come before Burke's committee, according to a spokeswoman for Paul Volpe, Chicago's CFO.
Over the last five years, Goldman Sachs has earned US$1.1 million in fees from Chicago, while Bank of America has earned US$1.8 million, according to Burke's office.
BP's expansion plans, which would increase the amount of ammonia and solid waste generated from the refinery that is dumped into Lake Michigan, have touched off a firestorm of protest.
Illinois' congressional delegation, Gov. Rod Blagojevich and others have blasted the plan for the potential harm it could do to the lake, which supplies drinking water to more than 30 million people.
Burke also proposed voiding city-issued BP gas credit cards and urged all communities along Lake Michigan to boycott the company's gasoline.
