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For Immediate Release
November, 15 2012, 02:50pm EDT
Contact:
Phineas Baxandall
Senior Tax and Budget Analyst
U.S. Public Interest Research Group
Phineas@pirg.org
617-747-4351
True Amount of BP Settlement Will Depend on Hidden Tax Giveaways
WASHINGTON
Today, BP agreed to a $4.5 billion settlement to resolve felony and misdemeanor charges related to the Gulf oil spill, but taxpayers may end up indirectly covering up to 35 percent of that amount if the company is allowed to take the settlement as a tax write-off.
"The judge shouldn't approve this settlement if BP could pass off much of this settlement cost onto taxpayers," said Phineas Baxandall, the Senior Tax and Budget Policy Analyst at the U.S. Public Interest Research Group (U.S. PIRG). "Especially in the context of pressing budget shortfalls, every dollar BP writes off means an additional dollar Americans will pay in the form of higher taxes, budget cuts, or more national debt."
According to news accounts, BP has agreed to increase its existing $38.1 billion charge against earnings for the spill by $3.85 billion. The company has already written off almost $10 billion of these costs as tax deductions. If the company treats the entire new amount as a normal deductible business cost, then the oil and gas giant could reduce its future tax bills by an additional $1.3 billion. The total net cost to BP of the settlement would then be only $2.5 billion.
At issue is whether, by agreeing to a settlement, lawyers for BP can assert that these costs are not punitive, even though they are clearly for wrongdoing that brought criminal charges.
BP is expected to pay billions more in a future settlement related to violations of the Clean Water Act and other environmental laws. Whether or not those expenses would be tax deductible will depend on the exact deal those federal agencies negotiate.
"Paying settlements for causing disasters like the Gulf spill is supposed to teach a lesson to corporate wrongdoers. To the extent that taxpayers pick up the tab, it becomes political theater. BP and the Department of Justice both get to tout a big number that isn't real," said Baxandall.
In fact, when a company negotiates a tax-deductible settlement for its misdeeds, the public loses out four times over. First, the public suffers the direct impact of corporate wrongdoing. Second, taxpayers are forced to shoulder the forgone revenue by raising tax rates, cutting public programs, or adding to the national debt. Third, future deterrence of corporate wrongdoing is weakened. And fourth, the absence of a trial eliminates opportunities for a public airing of evidence about corporate misdeeds and the lax regulations that can lead to them.
A 2012 report by U.S. PIRG on the tax deductibility of costs from corporate wrongdoing can be found here.
U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitols across the country, we take on the special interests on issues, such as product safety,political corruption, prescription drugs and voting rights,where these interests stand in the way of reform and progress.
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UNICEF Says Children 'Being Pulled From Under Rubble' in Lebanon After Israeli Bombardment
The United Nations Children's Fund warned that Israel's continued assault on Lebanon "poses a grave risk to the ceasefire and the efforts toward a lasting and comprehensive peace."
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A United Nations agency said late Thursday that Israel's massive bombardment of Lebanon earlier this week killed or wounded more than 180 children, a statement issued as the Israeli military vowed to continue assailing the war-ravaged country—potentially derailing ceasefire efforts in Iran and across the region.
The UN Children's Fund, widely known as UNICEF, said the toll from Israel's assault on Wednesday brought the total number of children killed or wounded in Lebanon since March 2 to at least 600. The agency said it is "receiving reports of children being pulled from under the rubble, while others remain missing and separated from their families."
"Many are experiencing trauma, having lost loved ones, their homes, and any sense of safety," UNICEF said. "Across the country, more than one million people have been uprooted, including an estimated 390,000 children, many for the second, third, or even fourth time."
UNICEF went on to echo growing concerns in the region, and around the world, that Israel's continued bombing and invasion of Lebanon "poses a grave risk to the ceasefire and the efforts toward a lasting and comprehensive peace."
"The children in Lebanon cannot be left behind," the UN agency said.
UNICEF's statement came as the chief of staff of the Israel Defense Forces said Lebanon is the Israeli military's "primary combat" zone and that the IDF is "in a state of war, we are not in a ceasefire."
US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu have both insisted that Lebanon was not included in the Iran ceasefire agreement announced late Tuesday—a claim that Iranian leaders and Pakistan's prime minister, who is mediating peace talks, have said is false.
On Thursday, Trump said Netanyahu agreed during a phone call to "low-key it" in Lebanon. But in a recorded statement addressed to residents of northern Israel on Thursday, Netanyahu declared: “There is no ceasefire in Lebanon. We continue to strike Hezbollah with force, and we will not stop until we restore your security.”
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NRDC senior attorney Becky Hammer called the pending rollback just "the latest in a long, long, line of Trump administration giveaways to fossil fuels industries," which have also included repealing EPA rules that targeted chemical pollution from coal-fired power plants, declaring a national energy emergency, and scrapping the 2009 "endangerment finding" that underpins all federal climate regulations.
Other advocacy organizations were similarly critical of Thursday's announcement. Daniel Estrin, Waterkeeper Alliance's general counsel and legal director, pointed out that "coal ash is contaminating water at nearly every active and retired coal plant in the US."
"By gutting these safeguards, EPA is abandoning its duty to protect impacted communities by allowing preventable contamination of our rivers, lakes, streams, and groundwater," he said. "The longer the coal industry is allowed to delay closing and cleaning up its toxic waste sites, the more difficult and costly it becomes to fix the damage. By failing to enforce the law, EPA is letting polluters continue harming people and wildlife without accountability."
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— Ed Markey (@edmarkey.bsky.social) April 9, 2026 at 3:31 PM
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