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BP CEO Testifies on Capitol Hill; Analysis of Hayward's Opening Comments; White House Reaction to Joe Barton's Remarks; The Public Weighs in on Hayward's Testimony
Aired June 17, 2010 - 10:58 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Welcome back to our special continuing coverage. The BP CEO, Tony Hayward, he is at the top right of your screen. He is before the House Energy and Commerce subcommittee on oversight and investigations. He will testify shortly. He will deliver testimony. We have obtained an advanced copy of that in which he will apologize and say BP promises to get to the bottom of this. And he will also say BP is committed to making right to the people of the Gulf Coast who have been affected.
Let's go back now as we wait for Tony Hayward and listen to the continuing opening statements from the committee members. This is Republican Parker Griffith of Alabama.
(JOINED IN PROGRESS)
REP. PARKER GRIFFITH (R), ALABAMA: -- our valuable resources can continue, and I might say this to you. You are never as good as they say you are or as bad as they say you are, so this hearing will go back and forth.
The other thing I'd like to remind the committee is that the greatest environmental disaster in America has been cigarettes. Sixty thousand Americans today this year will die from cigarette-related cancers. So, if we're going to talk about the environment, let's be sure we don't leave that out. I'm a cancer specialist, by the way, by training, and I never fail to bring that up.
So, the environment is it an important concept. We regret the loss of life, but there is much that we can do. And we can put this in perspective. This is not going to be the worst thing that ever happened to America.
Thank you.
UNIDENTIFIED MALE: Ms. Schakowsky, three minutes opening statement, please.
REP. JAN SCHAKOWSKY (D), ILLINOIS: Thank you, Mr. Chairman.
At this very moment, oil is gushing from Deepwater Horizon blowout at a rate between, we've learned, 35,000 and 60,000 barrels a day, killing animals, destroying fragile wetlands, and wiping out entire populations of fish and along with it the jobs of hundreds of thousands of people. Most upsetting about this travesty is that it could have been avoided. As the ongoing investigation by this committee has already discovered, BP executives created an atmosphere where safety concerns were ignored in order to ensure that the company's already staggering profits this year, approximately $93 million a day in the first quarter continued unabated.
This appalling disregard for the Gulf Coast and its inhabitants is, without question, one of the most shameful acts by a corporation in American history. Sadly, the Deepwater Horizon spill is just the most significant example of BP's disregard for the environment and the well being of its workers.
A report published by the Center for Public Integrity found that between June, 2007, and February, 2010, BP received a total of 862 citations from the Occupational Safety and Health Administration. Of those, a staggering 760 were classified as being egregious and willful, compared with eight at the two oil companies tied for second place.
Inexcusably, this pattern of behavior continued in the spill's aftermath. I hold in my hand a document called "Voluntary Waiver of Release" that BP made unemployed fishermen sign before they could be hired for spill cleanup.
The waiver states: "I hereby agree on behalf of myself and representatives to hold harmless and indemnify and release, waive and forever discharge the BP Exploration Production Inc. from all claims and damages that I or my representatives may have with regard to my participation in the spill response activities."
I know that you said this was an early misstep and that this was just a standard document, but this was the first response that you had to people that were hired, and outrage does not begin to express my feeling. These are people who are unemployed because of the recklessness of BP, forced to take jobs cleaning up BP's mess in order to survive, yet to qualify for those jobs --
KING: You're watching our continuing coverage of the House Energy and Commerce Subcommittee on Oversight and Investigations.
The big drama today, the testimony of the man you see in the upper right of your screen, the CEO of BP, Tony Hayward. For the past hour, this committee hearing has been under way. Opening statements from the chairman, other members of the committee. Mr. Hayward has been waiting patiently.
Also on hand, our senior congressional correspondent, Dana Bash. I want to bring her in.
Dana, so far, predictable scorn from the Democrats and a couple of surprises from the Republicans.
DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: There were some surprises. I think the most interesting and perhaps the most fireworks was, ironically, not anything to do with what this hearing is about, which is specifically an investigation into what went wrong, and wanting to get Tony Hayward to answer questions about some incidents that happened leading up to the explosion. But, in fact, it was about that $20 billion escrow fund that executives at BP agreed with the president and administration officials at the White House that they would go ahead and do.
Well, we heard from a ranking Republican, a top Republican on this committee, that he was not happy with that at all, and then a Democrat said it's absolutely appropriate.
Listen to what happened.
(BEGIN VIDEO CLIP)
REP. JOE BARTON (R), TEXAS: But I'm ashamed of what happened in the White House yesterday. I think it is it a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown. In this case, a $20 billion shakedown, with the attorney general of the United States, who is legitimately conducting a criminal investigation, and has every right to do so to protect the interests of the American people, participating in what amounts to a $20 billion slush fund that is unprecedented in our nation's history, that has no legal standing, and which sets, I think, a terrible precedent for the future.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
REP. EDWARD MARKEY (D), MASSACHUSETTS: No, this is not a shakedown of that company. This is the American government, President Obama, ensuring that this company is made accountable, and sending a signal to all other companies that seek to treat ordinary American families in a way that can destroy their entire family's history.
(END VIDEO CLIP)
BASH: Now, even though you heard that Republican upset about that $20 billion escrow fund, make no mistake about it, Republicans are trying to make clear, one after another, that they are as angry at BP as the Democrats are, talking about the investigation that their staff had done, looking at some of the missteps and cost-cutting and cutting corners, as many of these members have said. You are definitely hearing that from Republicans as much as Democrats.
And one piece of color that I wanted to point out, I'm not sure if this comes across on television, but what you see in there is Tony Hayward at a huge table. It's really enormous. The table could probably fit, I don't know, 10 people at the witness table. But he's alone. He's alone in the middle.
So, the visual is sort of a little man in the middle of this big table facing this panel of investigators and, frankly, interrogators, that they're going to ask these tough questions of him.
KING: Dana Bash for us outside the hearing room. Tony Hayward, the man in the middle, certainly a good way to put it today as we await his testimony and we listen to the continuing opening statements of the members of the committee.
I also want to bring in our national political correspondent, Jessica Yellin, into the conversation.
It has been interesting so far that you have Democrats' scorn at BP. Republicans, for the most part, big questions for BP, but also saying, let's not forget the Obama administration in charge for 15 months, granted the waivers, granted the permits, granted the leases, that it is in charge of oversight of this agency. One thing that has not come up, though, they promised to do their due diligence now, the Congress.
We pulled some numbers for the "JOHN KING USA" program. The number of oversight hearings on offshore drilling before this spill: In 2010, zero. In 2009, after some critical inspector general reports, five in the House and two in the Senate. In 2008, zero. In 2007, one in the House and two in the Senate.
So, everyone needs to look in the mirror here, not just BP, not just the executive branch.
But, has the legislative branch kept its commitment to do oversight?
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Absolutely not. They had a responsibility here, too. Specifically, members of Congress, even some of those people we heard speaking earlier -- John Dingell, for example, the older man who was speaking critically of BP.
Well, in fact, he was running a committee that for years, had oversight responsibility for some of this. And we see how few hearings.
Right now, there is a hearing going on, actually, into MMS. The inspector general for the Interior Department is testifying before Congress right now, or has been, about the MMS investigation and how it's going on right now. And I want to just share with you a few of the things she's saying.
She said in her opening statements that, first of all, the way that MMS is probing this incident is backwards, in her view. She says that they are going out and getting public testimony in the wrong order. They should be doing an investigation first, and then getting testimony.
She says that she thinks there needs to be a new ethics rule set up for the industry. And she says that part of the problem here is that the culture of the industry enables these inspectors to misbehave, to be too cozy, and that there have to be formal ethics standards written to stop that.
And here's something that should be a little chilling. She says that the way oversight is done is inconsistent. For example, in the Pacific, for all the rigs there, there's one inspector for every two facilities. But in the Gulf, there's one inspector for every 66 facilities. It's just lopsided, off balance, inconsistent. Obviously, no secret here, you need a huge overhaul.
KING: And as we listen to the testimony and we talk about how this should work and what the follow-up will be in Washington, we also want to check in with our Ali Velshi. He's down along the Gulf Coast.
And Ali, a lot of talk at this committee so far. People have been following it from the beginning. They're hearing a lot of talk about centralizers, about casings, about cementings. And if you don't know the industry, it's highly technical.
But the point the Democrats are trying to make is that BP cut corners. In their view, this was a rig that was behind schedule, over budget, cut corners. And as a result of that, you have the environmental and economic catastrophe you are down there witnessing this week.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes, and it's going to come down to two things. One is, there are those who say it's an accident, this kind of thing is bound to happen from time to time. Were the regulations and was MMS, the division of the Department of Interior, doing the right thing?
And then there's that, which you just mentioned -- were there specific corners cut? Did BP direct its subcontractors to do things that was against their better judgment because they were in a hurry to get that drilling rig out of that hole somewhere else? And that is a very, very important thing.
The oil industry, whether it's on land or on water, John, is a 24/7 industry. They dispatch engineers and teams the minute they think something is going on. This isn't an industry that sits on its heels.
Why? Because we consume all of the oil almost every day in the world that we drill. The U.S. consumes more than 20 percent of the world's oil, makes two percent of it. So, when there's oil anywhere around us, they go right to it.
Now, is that a BP fault? Is that our pressure? Is that the regulators that didn't do their job? I think that's what needs to come out of this.
You were talking to Mr. Hofmeister earlier about the partisan nature of these types of questions. What really needs to happen is we need to narrow it down to, who is at fault, what needs to change so this doesn't happen again? Because the fishermen that you and I talked to earlier this week, John, are actually not convinced that this won't happen again. And one thing we're all convinced about, John, is that if it does happen again, we're not any better at solving this problem than we have been for the last 59 days.
KING: Excellent observations there from Ali Velshi, at the source.
You are continuing to watch our coverage here.
Tony Hayward, the BP CEO, he's in the top right of your screen. He has been diligently taking notes as he listens to the opening statements of the members of this subcommittee. It is the House Energy and Commerce Subcommittee on Oversight and Investigations.
Mr. Hayward, we expect, to testify at any moment.
Stay where you are. Our continuing coverage -- we'll be back in just a moment.
(COMMERCIAL BREAK)
KING: You're watching our continuing coverage of the House Energy and Commerce Subcommittee on Oversight and Investigations.
The star witness today is the CEO of BP, Tony Hayward. He has yet to speak because committee members have been delivering their opening statements. Most of them harshly critical of the company.
Democrats painting a narrative of a company that essentially put profits over safety, and that ignored warning signs on the Deepwater Horizon in the weeks, days and hours before the deadly explosion on April 20th. Worth remembering, 11 men died in that explosion. And as a result of it, what you see on the left of your screen, the continuing flow of oil into the Gulf of Mexico, millions of gallons now. BP beginning to cap and contain some of it -- some of it -- but a relatively small percentage so far.
In his testimony today -- we've received an advanced copy -- Mr. Hayward will apologize. He will say BP is trying to get to the bottom of just what happened. What will be quite interesting is when he is pressed with questions, pressed with questions based on thousands -- hundreds of thousands of pages -- the committee has before it, will he give any new details under quite a bit of pressure? Because as he speaks, he know the Justice Department is investigating BP for possible criminal negligence, and there is also the possibility of dozens of civil lawsuits against the company.
Let's dip back into the hearing quickly to listen to some of the opening statements.
(JOINED IN PROGRESS)
REP. PETER WELCH (D), VERMONT: -- for willful safety violations, including the use of valves similar to those that contributed to the Texas City blast.
And finally, of course, we have the Deepwater Horizon catastrophe, and the more evidence that comes in, the more it's clear that that event was foreseeable and it was avoidable.
After the explosion, BP said there was no oil leaking. Then it said there was 1,000 barrels a day leaking. Then it went to 5,000 barrels. We're now up to 60,000 barrels.
For 59 days, Mr. Hayward, BP has told the American people that this was an aberration, that it was a singular occurrence, and that it wouldn't happen again. Mr. Hayward, it's not an aberration.
For BP, regrettably, this is business as usual. It's deja vu again and again and again and again.
And the question I think many of us have is whether a CEO who has presided over a company that has incurred $370 million in criminal fines, whose company, according to independent assessors, has one of the worst records in the world for safety, and consistently puts money ahead of safety, whose peers, including Mr. Tillerson from ExxonMobil, who testified where you are two days ago, said that they never -- Exxon never would have drilled a well they way BP did at Deepwater Horizon, and who as CEO has presided over the destruction of nearly $100 billion in shareholder value and the suspension of an annual $10 billion dividend, does that leader continue to enjoy and have a valid claim on the trust and confidence of his employees, his shareholders, the public regulators, and, most importantly, the families and small businesses of the Gulf Coast? Or is it time, frankly, for that CEO to consider to submit his resignation?
I thank you and yield back.
UNIDENTIFIED MALE: Thank you.
Mr. Green, for an opening statement, please.
KING: More criticism there of the BP CEO form the Democratic congressman from Vermont suggesting perhaps that Mr. Hayward has worn out his trust not only with the American people, but with his own shareholders.
We'll continue to await the testimony of the BP CEO.
And as the members of the committee talk about the impact on businesses across the Gulf Coast, our Ed Lavandera is right in the heart of that right now in Kenner, Louisiana -- Ed.
ED LAVANDERA, CNN CORRESPONDENT: Hey, John.
Kenner, Louisiana, at a great little family diner here called Dot's Diner. And a lot of -- clearly, this is the type of place where Tony Hayward has a lot of work to do to win over the hearts of the people here on the Gulf Coast.
We have got Richard with the most Cajun last name you're going to meet this morning.
Give it to me one more time.
RICHARD CAZAUBON, RESIDENT: Cazaubon.
LAVANDERA: Cazaubon. All right.
So, Richard, we're about to hear from Tony Hayward. What do you want to hear from him?
CAZAUBON: Well, I want to hear him explain what happened here. You know, all this PR work they've been doing, I want to hear the real reasons why this happened.
LAVANDERA: Does he have a chance to still kind of win you over in any kind of way?
CAZAUBON: No. I think the damage has already been done by him. He has clearly no understanding of what's going on down here.
LAVANDERA: You said -- you were telling me you have a lot of friends that are in the shrimp wholesale business. In your words, they're dying right now?
CAZAUBON: Correct. They have no product to pick up and sell.
LAVANDERA: What do you think they want to hear? Is there anything that they could hear that would help them out?
CAZAUBON: Oh, I think they're glad to hear about this $20 billion. But like on one of your earlier reports, they want to know how it's going to be distributed. You know, what red tape they're going to have to go through to get some money. Right now, I think they're picking and choosing for PR reasons who they are giving money to, but there are a lot of people out there that are still suffering.
LAVANDERA: I'm sure you have been paying a lot of attention to the cleanup effort right now. How do you think that's going?
CAZAUBON: I think that's a joke. I think that in the first three, four days, when we were offered help from other countries, Obama refused because of the unions to release that Jones Act and allow these foreign companies in here to help us. And that's something President Bush did. He waived the Jones Act and got other people to come in here and help us.
And then when you hear about places of booms in Maine (ph), USA, that's still not be put down here in the shortage of booms and all --
LAVANDERA: You told me earlier you thought that this response has actually been worse than Katrina. Did you really mean that?
CAZAUBON: Oh, yes. Absolutely. Absolutely. The response here by the federal government has been absolutely zilch.
LAVANDERA: All right. I appreciate it, Richard.
So you really get a sense there.
Another one of his frustrations here this morning, John, is he's actually very anxious to hear Tony Hayward speak. So he's ready to stop listening to the congressmen make their opening statements and he's very anxious to start listening to Tony Hayward -- John.
KING: Ed Lavandera for us in Kenner, Louisiana. And a fascinating point there.
Let me continue the conversation with our national political correspondent, Jessica Yellin, who is with me.
I saw this a lot when I was in the Gulf, people saying, "Where is the federal government?" "The president was too slow to get the urgency of this."
Some is perception, some of it is reality. In politics, that doesn't quite matter.
YELLIN: It doesn't matter. And, you know, there is enormous frustration, I know, among some of the people working in the administration on response because they feel like they are really working hard, doing what they can. They've gotten tens of thousands of personnel down there, and this is a problem that is out of control.
One of the frustrations they feel is that, for some reason, some on the team think that the administration has not done a good job explaining the nature of this crisis and how their response is working. And it might not always be visible, but it is in place, and they're doing what they can. Obviously, to people who are suffering, it's not enough.
The difference with Katrina is it's a hurricane, it comes and then it's gone, and you can go in and fix what happened. This is an ongoing problem.
KING: And the uncertainty and the anxiety gnawing at people.
We're going to take a quick break. We are just moments away from what we're all waiting for today, the dramatic testimony of the BP CEO, Tony Hayward.
You see him in the top right of your screen. He has been listening and taking notes during the opening statements. But in just moments, he will testify before the Congress, say he's sorry, and try to explain what happened and what BP will do about it.
(COMMERCIAL BREAK)
KING: Live pictures there or Capitol Hill.
To the top right of your screen, the BP CEO, Tony Hayward. To the left of your screen, of course, the catastrophe.
He is there to testify about the BP oil spill into the Gulf of Mexico. Tony Hayward is due to testify in just moments.
We will take you there live.
But this Washington drama is an American drama because of the scope and breadth of the devastation caused by this oil spill. Everyone around the country is talking about it, including Oprah Winfrey.
Our Don Lemon caught up Oprah exclusively.
(BEGIN VIDEOTAPE)
DON LEMON, CNN CORRESPONDENT: I have to ask you this, because of the news. You have been so supportive of the folks down south and what's going on with the oil. What's going on in your heart with that?
OPRAH WINFREY, HOST, "THE OPRAH WINFREY SHOW": What's going on in my heart is the same thing that's happening, I think, everybody feels for what is happening to all of the fishermen and all of the families who this time of the year would be hosting people from all over the country and all over the world there, you know?
We can only hope and pray that this will soon be resolved in a way that people can pick themselves up and we begin to move forward. Yes.
LEMON: The criticism from the president, his handling of --
WINFREY: I think the president is doing the best anybody can. I really don't understand what people want him to do. I think -- he's the president of the United States. You're not supposed to be emotional. You're supposed to take action and get things done and make sure those things happen.
So I really don't know what it is people want him to do.
LEMON: You're so charitable. Are you going to help do anything for the folks down there?
WINFREY: Well, I don't have any plans right to do anything specifically because it's going to take more money than I have to do that. So I think that all of us being united in our sense of understanding, what is going on and what is happening not only to the people but to the -- to the animals, that's what breaks my heart too, watching that every day.
LEMON: Thank you, Oprah.
WINFREY: Thank you.
(END VIDEOTAPE)
KING: Oprah Winfrey with our Don Lemon there.
The opening statements have concluded. Let's get right back into the committee hearing room.
(JOINED IN PROGRESS)
REP. BART STUPAK (D), CHAIRMAN, HOUSE ENERGY AND COMMERCE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS: I would like to comment that Mr. Melancon and Mr. Scalise are members of our committee. They also hosted us when we had the field hearing in New Orleans a few weeks ago, last week. And we had nine members go down, one of the largest field hearings we ever had. So you can see the interest in here.
I should also note that Ms. Jackson Lee is with us, not a member of the committee. She will not be allowed to ask questions, but we welcome her. And I know she's sat in on previous hearings we've had.
So, let's move on with our first witness.
Our first witness is Mr. Tony Hayward, who is the chief executive officer of BP PLC.
Mr. Hayward, it's the policy of this subcommittee to take all testimony under oath. Please be advised that you have a right under the rules of the House to be advised by counsel during your testimony.
Do you wish to represented by legal counsel?
I'm sorry. You're going to just have to press that button there, sir.
TONY HAYWARD, CEO, BP: I do not.
STUPAK: Do not.
OK. We also asked -- the committee asked if you would have a technical person with you so you could consult if we have some questions that you want to run by your technical person.
Do you have a technical person with you?
HAYWARD: I do.
STUPAK: Could you state his name and position for the record, please?
HAYWARD: Mike Zangy (ph), drilling engineer.
STUPAK: OK. During your testimony, any time if asked a question you want to consult with that individual, please let us know. We'll give you a moment to do so before you answer, but you'd be the only one who could answer the question.
Is that clear?
Thank you.
And, Mr. Hayward, I'm going to ask you to please rise, raise your right hand, and take the oath.
UNIDENTIFIED MALE: Do you swear or affirm the testimony you are about to give to be the truth, the whole truth, nothing but the truth, in the matter pending before this committee?
HAYWARD: I do.
STUPAK: Let the record reflect the witness answered in the affirmative. Mr. Hayward, you are now under oath. We would like to hear an opening statement from you. You may submit a longer statement if you wish, for the record.
But, if you would, please begin your opening statement. And let me, again, on behalf of all members of the committee, we appreciate your willingness to appear here today.
HAYWARD: Chairman Waxman, Chairman Stupak --
UNIDENTIFIED FEMALE: (INAUDIBLE)
STUPAK: OK.
Suspend, please, sir.
UNIDENTIFIED FEMALE: (INAUDIBLE)
STUPAK: Ma'am --
UNIDENTIFIED FEMALE: (INAUDIBLE)
KING: You are watching the back of the committee hearing room. Tony Hayward had just begun his opening statement. It was perhaps inevitable. We knew there were protesters in the room as the committee hearing was getting under way a little more than an hour ago.
We saw them holding signs. A woman with her hands darkened, as if with oil, raising them and shouting at Tony Hayward just as he began his opening statement.
Chairman Stupak suspended -- asked Mr. Hayward to suspend. And now you see Capitol Police and other committee staffers trying to escort the protesters out of the room.
Again, it was inevitable, perhaps, given the emotions on this issue. You see a large media contingent in there as well.
Once these protesters are escorted out of the room -- you see others still in the room with signs -- the hearing will get back under way. Tony Hayward will begin.
He was just words, seconds into his opening statement. Mr. Hayward will resume momentarily, and we will keep an eye out for further demonstrations.
You see the large hearing room here, and you see Mr. Hayward sitting alone in the middle of that table, surrounded -- he does have staff and attorneys with him.
The chairman, Bart Stupak.
STUPAK: Those viewers in our audience, emotions run high on this issue. But we have a hearing to conduct here. We're going to conduct our hearing. It's going to be done with proper decorum. Mr. Hayward, when you're ready, ,we are going to start the clock over.
You may begin.
HAYWARD: Chairman Waxman, Chairman Stupak, Ranking Member Barton, Ranking Member Burgess, members of the committee, I'm Tony Hayward, chief executive of BP.
The explosion and fire aboard the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico --
UNIDENTIFIED MALE: Excuse me, Mr. Hayward. I'm going to ask you just to pull that up. Some of the members are having trouble hearing, probably over the clicking of the cameras. But we're having a little trouble hearing you. If you could just pull it a little closer.
Thanks.
HAYWARD: The explosion and fire on board the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico never should have happened, and I'm deeply sorry that it did.
When I learned that 11 men had lost their lives, I was personally devastated. Three weeks ago, I attended a memorial service for those men, and it was a shattering moment.
I want to offer my sincere condolences to their friends and families. I can only begin to imagine their sorrow.
I understand how serious this situation is. It is a tragedy. I want to speak directly to the people who live and work in the Gulf region.
I know that this incident has had a profound impact on your lives and caused great turmoil, and I deeply regret that. I also deeply regret the impact the spill has had on the environment, the wildlife and the ecosystem of the Gulf.
I want to acknowledge the questions that you and the public are rightly asking. How could this happen? How damaging is the spill to the environment? Why is it taking so long to stop the flow of oil and gas into the Gulf?
We don't yet have all of the answers to these important questions, but I hear and understand the concerns, frustrations and anger being voiced across the country. And I know that these sentiments will continue until the leak is stopped and until we prove through our actions that we are doing the right thing.
Yesterday, we met with the president of the United States and his senior advisers. We discussed how BP could be more constructive in the government's desire to bring more comfort and assurance to the people of the Gulf Coast beyond the activity we've already done.
We agreed in that meeting to create a $20 billion claims fund to compensate the affected parties and pay for the costs to federal, state and local governments of the cleanup and environmental mitigation. We said all along that we would pay these costs, and now the American people can be confident that our word is good.
I've been to the Gulf Coast. I've met with fishermen, business owners and families. I understand what they're going through, and I promise them, as I'm promising you, that we will make this right. After yesterday's announcement, I hope that they feel we're on the right track.
I'm here today because I have a responsibility to the American people to do my best to explain what BP has done, is doing, and will do in the future to respond to this terrible accident.
First, we're doing everything we can to secure the well and, in the meantime, contain the flow of oil. We're currently drilling two relief wells. We believe they represent the ultimate solution. We expect this to be complete in August.
Simultaneously, we've been working on parallel strategies to minimize or stop the flow of oil. While not all have been met with success, it appears that our latest containment effort is now containing about 20,000 barrels a day. By the end of June, we expect to have equipment in place to handle between 40,000 and 50,000 barrels a day; and by mid-July, between 60,000 and 80,000 barrels a day.
Second, I've been clear that we will pay all necessary cleanup costs. We've mounted what the Coast Guard has recognized as the largest spill response in history. We've been working hard on the leadership of the Unified Command to stop the oil from coming ashore. And whilst we're grateful these efforts are reducing the impacts of the spill, any oil on the shore is deeply distressing. We will be vigilant in our cleanup.
Third, as I have made clear from the beginning, we will pay all legitimate claims for losses and damages caused by the spill. Those are not just words. We've already paid out more than $95 million, and we've announced an independent claims facility headed by Ken Feinberg to ensure the process is as fair, transparent, and rapid as possible.
Fourth, we need to know what went wrong so that we as a company and we as an industry can do better. That is why less than 24 hours after the accident, I commissioned a non-privileged investigation. I did it because I want to know what happened and I want to share the results. Right now, it's simply too early to say what caused the incident. There is still extensive work to do. A full answer must await the outcome of multiple investigations, including the marine report.
To sum up, I understand the seriousness of the situation and the concerns, frustrations, and fears that have been and will continue to be voiced. I know that only actions and results, not mere words, ultimately can give you the confidence you seek. I give my pledge as the leader of BP that we will not rest until we make this right. We're a strong company and no resources will be spared. We and the entire industry will learn from this terrible event and emerge stronger, smarter, and safer.
Thank you.
UNIDENTIFIED MALE: Thank you, Mr. Hayward.
One of the bad parts while conducting a hearing is we get interrupted every now and then by votes. And we have three votes pending right now. There's about 10 minutes remaining on this vote. I would suggest instead of trying to get into questions, we take a break right now. Let's stay in recess for 30 minutes. Let's come back at noon and continue the hearing. We'll start with questions from all of the members.
This committee will be in recess until 12:00 noon.
(END OF COVERAGE)
KING: A quick recess taken just after the dramatic opening statement from the BP CEO Tony Hayward. The committee taking a break so that it can go to the House floor to conduct some votes. It will be back at noon. Then the questioning of the BP CEO will begin.
Tony Hayward had submitted a lengthy opening statement in writing to the committee. He chose to deliver just a short portion of that statement, saying he apologized, saying that BP would make it right, and the American people would ultimately he said, become convinced; our word is good. The tough part will come when the committee resumes at the top of the hour.
Then Tony Hayward will face questions from committee members, many of them armed with company documents they say prove that BP put profits over safety and was behind budget -- over budget and behind schedule on the DeepWater horizon. And that that is what led to decisions that led to the tragic explosion -- the deaths of 11 people and the continuing oil spill.
Jessica Yellin our national political correspondent joins me here.
He kept it short, he kept it contrite, he tried to look at the committee in the eye. Tony Hayward has a tough sales challenge today.
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: That's right. I mean, the opening statement, John is not what these hearings are about. It's really about the grilling that he's going to get from these members of Congress. And we're going to have to see if what they give us is a show, this forced outrage that we often see in these hearings in Washington, that make a lot of people feel uncomfortable. Or if it's actually going to substantive questions that get to the heart of what went wrong and how make sure it doesn't happen again, and what kind of response should happen by both BP in the future, and by the federal government.
I thought it was interesting that repeatedly Hayward used the phrase -- you said -- that we -- our word is good, we will make this right, these are not just words. He's trying to convey the sense that they are full participants in fixing the problem that they caused. We'll see how convincing he is.
KING: And as Tony Hayward was beginning his statement, he was interrupted briefly by a demonstration. One of the protestors in the room making herself heard.
Our senior Congressional correspondent Dana Bash was in the room. She now is outside the room.
Dana, tell us what happened.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, you know, this is something that we see, frankly, quite often in hearings. They often don't have the kind of play that this had just now for obvious reasons.
But there are a few protesters who are here, we believe, from the organization Code Pink, and they basically set up shop here on Capitol Hill. They are pretty much at every hearing where they could make a protest like that. I'm not sure how much you could see on TV because I was in the room, but she had tar on her face, tar on her hands, and she was saying that she wants Tony Hayward to be charged with a crime.
There's another woman walking around here who has feathers stuck to her entire body. And if she could get in there, I wouldn't be surprised if we see something later on with her.
But, look, it's interesting because just to set the scene here, there is a lot of security here, a lot more than you would normally see for an executive of any company at all. It's almost like it's a member of the president's cabinet or a dignitary who's here. That's how tight the security is here. So they knew that this was going to happen. They expected it. But to be honest with you, sometimes when protesters interrupt and voice their outrage, people are annoyed.
In this particular case, you got the sense in the room that the members were annoyed that he was interrupted, but maybe not so much because she was voicing some of what they've been hearing from their constituents and from the American people.
KING: Dana Bash in the room for us.
You see the buzz of activity behind her. That is the reflection of the drama on this day. We just heard the opening statement from Tony Hayward. We will get to the questions and the answers beginning at the top of the hour.
Tony Hayward saying he was sorry, saying that BP was determined to get to the bottom of this, saying BP is determined as quickly as it can contain more of the oil, ultimately to stop the leak. Tony Hayward also making this commitment to the people of United States.
(BEGIN VIDEO CLIP)
HAYWARD: We will pay all legitimate claims for losses and damages caused by the spill. Those are not just words. We've already paid out more than $95 million and announced an independent claims agency, headed by Ken Feinberg, to assure that the process is as fair, transparent and rapid as possible.
(END VIDEO CLIP)
KING: Along the Gulf Coast, many complain the process so far has not been as quick and as fair from their perspective.
Among our correspondents down in the region is Ali Velshi.
Ali, when Tony Hayward looks to Congress in the eye, looks the |American people essentially in the eye and the people who live where you are in the eye and says, we will make this right, will they take him as a credible witness along the Gulf Coast?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: I was talking to people who were telling me that in a great month they might make $30,000, and that's by the way, in a shortened fishing season. But that's the kind of money they hope ever to make it life in a short period of time.
They're not counting $20 billion. They're saying, how is the money I made a year ago that I didn't make today going to get to me efficiently? Why are there problems in the process? So we're going to hear about that.
The other thing is that as they grill Tony Hayward about BP, twp things to think about, John. One is, how much did BP know about this, and what's BP's own corporate history about profitability and safety got to do with this? Remember, they had that big explosion in the Texas city refinery. They had a spill on the Alaskan north slope. BP is a company that is plagued with a bit of this stuff.
But you also heard a Congressional committee interviewing other CEOs of oil companies earlier this week, John, where they found out that the other companies had the same disaster response plan for a spill in the Gulf Coast that BP had, prepared by the same people. So how much of this is industry-wide? And, by the way, how much of this has to do with the regulators, the Minerals Management Service of the Department of the Interior not knowing what would happen with a spill like this?
I think we need to make sure -- we hope -- that this conversation today has broadened out at Congress to say, how much is BP, how much is the industry, how much of the responsibility falls on regulators? And jointly, how do we make sure this doesn't happen again? I have been hanging around, John, with a lot of people who are very concerned that this kind of thing can happen again, can happen soon, and what will happen if it does.
KING: And Ali, in terms of the claims process, as you know, a lot of people early on complained they got a $5,000 check. Do they, in recent days, the administration said it would try to do a better job pressuring BP. BP said, look, it takes time to hire all these people.
Is it better today than it was a week ago? VELSHI: I was in a claims office on Monday. I don't know if it's sped up since then. But we were still hearing -- some people said it was very efficient. If your record keeping is very clear, they've had their claims processed. But about half the claims haven't been and that's where the problem is. A lot of places around here are small businesses, work on a cash basis, hard to know month-to-month how it compared to last month.
In the shrimping and oystering industry, in particular this year, this was going to be a banner year. Oystering in parts of these waters has been destroyed since Katrina. They had re-harvested. This was going to be the best year they've had in years. Now they're worried they may not see another year like this for 10 years.
KING: Ali Velshi for us along the Gulf Coast.
Let's go back up to Capitol Hill. Our senior Congressional correspondent Dana Bash is standing by with the ranking Republican on this subcommittee. It's the House Energy and Commerce Committee's subcommittee on oversight and investigation. The ranking Republicans is Michael Burgess of Texas.
Dana, take it away.
BASH: That's right. We do have Congressman Burgess.
Thank you very much for stopping and talking to us.
First, I just want to get your impression of what you saw so far from the opening statements of your colleagues. What struck me is you and your fellow Republicans seem to be just as angry at BP about what you thought were cutting corners, as maybe some of the Democrats.
REP. MICHAEL BURGESS (RR), RANKING MEMBER, OVERSIGHT AND INVESTIGATION SUBCOMMITTEE: Well, we heard from the executives of other oil companies earlier this week that they wouldn't have done things the way BP did. So, legitimate questions. Why were they doing things that way? Were they cutting corners? Were they sacrificing safety and putting it ahead of profit? Or putting profit ahead of safety?
Right now we've got this terrible problem going on down there. The entire livelihood of the Gulf is in danger because they can't fish. And now they may be on a moratorium where they can't drill. And those poor folks are being hit with a double whammy.
BASH: You ask questions but you've also been privy to hundreds, maybe thousands of documents that could answer those questions. What do you think?
Were they cutting corners? Were they putting at risk safety to make money?
BURGESS: I think the memo that was put out by the committee, the five questions that were asked that Chairman Waxman (ph) alluded to, are actually right on target. Maybe they didn't need all of the centralizers, and there was a concern about, you get the rod stuck it's going to be better to push cement through. But then you've got to check. And they didn't check. They had the people there to check and they sent them home and they proceeded anyway. Those are the kinds of things that are really just meddlesome questions.
And we heard from the two widows a week and a half ago, the two ladies who lost their husbands on the rig. And they said they went through safety drill after safety drill. Safety was job one and then they would get e-mails and telephone calls from their husbands that corners were cut and safety was being sacrificed.
BASH: So give us a sneak preview. We're going to go into Q&A in about 15 minutes when you come back from this session.
What's going to be your question for Tony Hayward?
BURGESS: Well, we try to establish that line of, was the CEO briefed on some of the problems they were having with the well? It was a difficult well. This wasn't something that happened in the last 20 seconds of its existence. This had been going on for days or even weeks beforehand. Was he being briefed? What were his directives as a result of those briefings? Did he direct them to in fact proceed with all dispatch? Or, did he direct them to act safely?
BASH: Do you think you're going to get the answers?
BURGESS: We'll see.
BASH: OK. Thank you very much. Thank you very much. Congressman Michael Burgess, as you said, the ranking Republican on this subcommittee.
And we're going to hear from this congressman and many others get their chance to actually ask Tony Hayward questions, again, probably in about 15 minutes when they go back into session -- John.
KING: Dana, if you have a chance before the congressman gets away, I'd like to ask him, does he agree with his colleague from Texas, Joe Barton, who called the $20 billion a chase down in a slush fund created by the Obama White House.
Does he agree with that?
BASH: That's a good question.
The question is, do you agree with your colleague Congressman Barton that the $20 billion fund, the escrow fund is effectively just a slush fund?
BURGESS: Well, we have known for sometime that BP, as Mr. Hayward said, BP was committed to paying for their responsibility and the cleanup. I think it's important. I think it's important to have a floor established for the people in the Gulf Coast. There are guys out there taking out loans with only their names as a signature. As a small business person, I can tell you, there's nothing more uncomfortable than taking out an operational loan and not knowing if your business is going to be around to pay for it. Well, now we'll have BP's signature on that loan, as well. And I think that provides some stability for the folks in the Gulf who are going to need it.
BASH: So you disagree with your colleague?
BURGESS: Well, the concept or the appearance of having the attorney general across the table, I'll admit, that is troublesome.
Look with this administration already has a history when they took over GM and they said you have to fire Mr. Wagner. I was uncomfortable with that. So this administration does unfortunately have an history of overreaching into private business. And I think you were hearing Mr. Barton's frustration with that.
BASH: But in this case, thumb's up on the $20 billion fund?
BURGESS: Well, we knew all along that BP was going to -- they have never questioned the fact that their liability was not capped at $75 million. They've never questioned that they would be responsible for paying their share of cleanup and restoring people the Gulf.
That is something that they had consented to all along. The structure of it and how it came about at the White House, no one asked me about that beforehand. I don't know if I'd be quite as strong as Mr. Barton, but I agree with him, it was unseemly to have the attorney general, perhaps holding criminal papers in his hand, asking for them to sign on the line.
BASH: Thank you, Congressman.
BURGESS: Thank you.
BASH: So John, you heard the answer there.
Maybe the method to getting it, not necessarily appropriate in his view, but the end result is something that they need -- John.
KING: Dana Bash for us on Capitol Hill.
Before we take a quick break, Robert Gibbs, the White House Press Secretary has responded. Again, it was Congressman Joe Barton, Republican of Texas, who said it was shameful that the White House created what he calls a shakedown of BP to create a $20 billion slush fund. The White House says that it's a $20 billion escrow account to protect the victims of this oil spill along the Gulf Coast.
Robert Gibbs saying this, what is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fisherman, small business owners, and communities whose lives have been devastated by the destruction. Congressman Barton may think that a fund to compensate these victims is a tragedy but most Americans know that the real tragedy is what the men and women of the Gulf Coast are going through right now.
The White House saying members of both parties should repudiate that comment. We're going to take a quick break. Obviously a dramatic day here. Partisan lines drawn, emotions are high. And the moment we've been waiting for -- we've heard the opening statement of the BP CEO Tony Hayward. The Q&A of him will begin at the top of the hour.
Our continuing coverage. We'll be back in just a moment.
(COMMERCIAL BREAK)
KING: Welcome back to our special coverage.
It's a big day in Washington, and a big day for the country. The BP CEO Tony Hayward testifying to Congress about what happened in the Gulf of Mexico eight weeks ago, what BP is doing to stop the leak, and promises in his words, quote, "We will make this right," including a $20 billion escrow account.
He will be questioned by members of this subcommittee at the top of the hour. They have take a quick break so that they can cast some votes on the House floor.
I want to bring you to the conversation now. That's the empty committee room. Our White House correspondent Dan Lothian.
Because, Dan, this drama on Capitol Hill taking place a day after the oil spill summit at the White House. And the President did sit across the table from the BP delegation. But one meeting that perhaps many Americans might have expected to happen didn't.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. I mean, the President did not sort of meet face to face with Tony Hayward. That was something that a lot of people, the critics in fact, have been saying, why has the President not reached out to the CEO to meet one on one?
While he was there in the meeting yesterday, the President did not pull him aside, have words with him. I talked to a senior administration official who told me that there was nothing that the President had to say directly to him that he couldn't say to the entire group.
They believe though that the President was able to get his message across, and that ism first of all, that BP has to remember the victims in all of this. That it's not just about dollars and cents, but it's about real victims who don't have a safety net and need this money in order to survive -- John.
KING: Let's go back to the pictures. If we can hold that one right there, Dan, I don't know if you have return at the White House.
We're showing the picture now in the Roosevelt Room -- if we can go back to that -- of the big meeting, the President of the United States sitting across the table from the BP delegation. At the end of the table on the President's side, to the far right, right there. That's Eric Holder, the Attorney General. The Labor Secretary Hilda Solis is in the blue at the end there. This is the BP CEO in the Oval Office.
If we could go back to that one photograph and stop on it in the Roosevelt Room. Right there. If we could just stop right there. There's BP CEO Tony Hayward across the table from the President.
Dan, a number of the Republicans, one Republican, Joe Barton of Texas, on Capitol Hill saying the Attorney General being in the room was somehow in his way inappropriate because the administration is conducting a criminal investigation of this conduct.
Does the administration have anything to say about that?
LOTHAIN: You know, someone did bring that up during the briefing yesterday, and the administration is saying at no time was anything brought up about the Justice Department investigation. That this was really focused on this $20 billion fund, and also that $100 million that BP has set up for those workers, the unemployed rig workers.
But I should also point out, the White House is reacting to some statements that Mr. Barton made this morning about this fund being a shakedown, if you will. White House Spokesman Robert Gibbs releasing a statement a short time ago saying quote, "What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners, and communities whose lives have been devastated by the destruction."
"Congressman Barton," it goes on to say, "may think that a fund to compensate these Americans is a tragedy, but most Americans know that the real tragedy is what the men and women of the Gulf Coast are going through right now. Members from both parties should repudiate his comments.
The White House believing that this fund is just the beginning. But it's needed in order to make the victims of this oil spill whole -- John.
KING: Dan Lothian tracking this for us at the White House.
Thank you, Dan.
Let's also check in with Ines Ferre in Atlanta, who is keeping track of reaction to this dramatic testimony from the BP CEO.
INES FERRE, CNN CORRESPONDENT: Hi, John. Yes, I've been here and watching people as they've been watching the testimony of BP's CEO. And here we've got Michael Parker and Jennifer Parker. You two have been watching for quite a while.
What do you think about BP's CEO testimony?
MICHAEL PARKER, REACTING TO HAYWARD TESTIMONY: I think he's saying exactly what he has to say in order to keep the people calm. And he's going to have to come good on his promise as far as putting the money in the escrow account and helping the people clean up a lot more.
FERRE: Jennifer, what do you think of the oil spill and the response to it?
JENNIFER PARKER, REACTING TO HAYWARD TESTIMONY: I think it should have come sooner. I believe that he could have gotten more, you know, boats out just like my husband had said, a lot more sooner.
FERRE: So you guys think more could have been done?
M. PARKER: Yes, I think a lot more could have been done a lot sooner. It's a giant company, they know that this could have happened. And I don't think it should have taken 59 days to start cleaning up oil, burning the oil off. I think they could have done it a lot sooner.
FERRE: All right. Thanks so much. Michael Parker and Jennifer Parker.
And John, I just want to say that I've spoke to quite a few people here and a big feeling that people have had is no matter what Hayward says, they just don't feel that it's enough. I mean that's, that's a big sentiment that I've heard over and over again -- John.
KING: It is a reflection there of the enormous credibility challenge, not only for this company, but for the personal face of the company at the moment. Tony Hayward, the BP CEO.
At the top of the hour, Tony Hayward will be back in the chair under oath answering questions from the House Energy and Commerce Subcommittee on Oversight and Investigation. It's a dramatic day in Washington, a dramatic day.
If you want answers to just what happened on the DeepWater horizon, when will the leak be plugged, and any details of how BP plans to spend the $20 billion it has promised to set aside for the victims, our coverage will continue in just a moment.
(COMMERCIAL BREAK)
KING: We're just moments away from the question and answers at the House Energy and Commerce Subcommittee on Oversight and Investigations. The star witness this day, the CEO of BP, Tony Hayward.
Tony Hayward won't win this committee over today. Many of its members are openly scornful, saying BP cut corners, put profits over safety, and that is why we have the largest environmental catastrophe in U.S. history. But in this opening statement, Tony Hayward did try to convince the committee that BP realizes the gravity of the situation and will in his words, make it right.
(BEGIN VIDEO CLIP) HAYWARD: I know that this incident has had a profound impact on your lives and caused great turmoil and I deeply regret that. I also deeply regret the impact the spill has had on the environment, the wildlife and the ecosystem of the Gulf. I want to acknowledge the questions that you and the public are rightly asking. How could this happen? How damaging is the spill to the environment? Why is it taking so long to stop the flow of oil and gas into the Gulf? We don't yet have all the answers to these important questions. But I hear and understand the concerns, frustrations, and anger being voiced across the country. And I know that these sentiments will continue until the leak is stopped and until we prove through our actions that we are doing the right thing.
(END VIDEO CLIP)
KING: A soft-spoken and contrite Tony Hayward there, testifying just moments ago before this committee. He will face questions soon.
Let's bring in our Ali Velshi who is down in New Orleans, and has spent the week along the Gulf Coast.
Ali, he is sorry, he is soft-spoken, he is being deferential at moment. But this is the same Tony Hayward who said at the beginning there would be a very, very modest environmental impact, and BP would turn out to be a model to the oil community in showing to how it responded to this. And who famously said, I want this to be over, because, quote, "I want my life back."
VELSHI: Yes. He and Barack Obama didn't spend a lot of one-on- one time together at the White House. They might want to because they've got a lot in common. Every time they say something they have to sort of try and soften it or come across the other way.
But he did say something in that piece that you just ran, which actually resonates around here in the Gulf Coast. Why is it taking so long to stop this leak? A lot of the people you and I spoke to earlier this week, particularly who are involved in the fishing industry, but also in the oil industry, are a little less concerned about the blame. They understand oil is going to have to be drilled for in the Gulf of Mexico for decades to come. Even if we decide we don't like oil, it's still going to be a while.
The bottom line is, why is this thing still leaking. In the President's speech, you didn't hear something about new developments about stopping this leaking and I would love to hear if Tony Hayward has something where he says, we're closer, we've got a deadline. We've got some sense of it. Because until now, as you know, those relief wells, the thing that we think is going to be the ultimate solution, we're still looking at August for that.
KING: And beyond that, Ali, that is the number one question in the region is when, when, when will the oil stop?
What's number two?
VELSHI: Well, until we know when the oil stops, we don't know how much damage has been done to the fishing industry, which is such a big part of the livelihood here. And that's important. These people have been through hurricanes, they've been through low shrimp prices and low oyster prices. They can weather a storm, they're hardy.
They say if this is a five-year problem, they can probably weather it. If it's a 10-year problem, how do you pay for your house? How do you stay here? You have to start looking for other things to do, other places to move after generations of families have been here. So they need to know when the oil stops. The day the oil stops there can be some estimate of how much is there, how much needs to be burned, how much needs to be siphoned, how much needs to be dispersed and when the shrimp and the oysters and the crabs and the fish come back.
Number one is when does it stop. Number two, when does it get back to normal.
KING: Ali Velshi for us, along the Gulf Coast. Ali does not travel with a band. That is a nearby coming from down there.
Thanks for working through that, Ali.
