Biz Brief: Congressman Asks BP to Suspend Dividend Payments, Ad Campaigns
More calls have been raised for BP (BP) to suspend dividend payments and end its multi-million PR campaign as the Gulf Coast is battered by the worst oil spill since Exxon Valdez.
"As oil continues to gush into the Gulf, BP is mistakenly focused on protecting the well-being of its shareholders and its image," said Rep. Peter Welch, a member of the House Energy and Commerce Committee. "Tony Hayward ought to be marshalling all of his company's resources on capping the well and cleaning up the Gulf – not frivolous PR gambits and investor relations." More than 31 other members of Congress are supporting Welch's call.
Here is a copy of the letter below:
Dear Mr. Hayward,
As BP presides over one of the greatest environmental and economic catastrophes of our time, we find it troubling that your company plans to divert financial resources to shareholder dividends and slick marketing campaigns.
Even as oil threatens to flow into the Gulf of Mexico for months to come, press reports indicate that you hope to distribute $10 billion in dividends to shareholders before the full cost of this devastating oil spill is known. At the same time, your company has launched an aggressive public relations campaign, with full page ads in major newspapers and a reported $50 million television blitz.
We urge you to halt your planned dividend payout and cancel your advertising campaign until you have done the hard work of capping the well, cleaning up the Gulf Coast and making whole those whose very livelihoods are threatened by this catastrophe. Not a moment before then should you return to business as usual.
Sincerely,
PETER WELCH
Member of Congress
On Tuesday, BP said that it would honor $2.63 billion in dividend payments, initially announced a week after the spill, that will be paid on June 21. What happens on future payouts remains to be seen. If BP does not suspend payments, it's expected that the company could share a total of $10.5 billion in dividends with investors this year. Meanwhile, television ads claiming that BP "will make this right" continue to broadcast nationwide.
