You'd think BP would have its hands full right now, what with both the reality of the massive oil gush in the Gulf and the PR fight it has to wage. This article from Mother Jones isn't really going to help on the PR front.
Oil giant BP may be overwhelmed with the clean-up from the collapse of its Deepwater oil rig in the Gulf of Mexico. But the corporation has still found time to fight tougher financial reforms on Capitol Hill. The corporation is a member of the Coalition for Derivatives End-Users, a collection of companies actively pushing for a loophole in new regulations governing derivatives, the complex and opaque products used to hedge risk and bet on fluctuations in the financial markets. Derivatives, experts say, exacerbated the 2008 financial crisis, and lawmakers and the White House have sought to drag that market into the sunlight. The financial reform legislation now in Congress, says President Obama, will “close the loopholes that allowed derivatives deals so large and risky they could threaten our entire economy.”
Not if BP has its way. The corporation, along with the US Chamber of Commerce, Business Roundtable, and other large advocacy groups, wants to ensure that it is exempted from a new provision in derivatives regulation that would increase transparency and make derivatives trading less risky. (BP did not respond to a request for comment.)...
[W]hat’s got BP upset is a proposal to force derivatives to go through a clearinghouse, a central body that would act as a middleman on each trade, collect data, and help protect failed derivatives deals from leading to massive losses that harm the wider economy. The clearinghouse would do so by requiring companies in a trade to put forward money or other collateral in case those trades went wrong. This, lawmakers and finance experts say, is crucial: Without this middleman ensuring everyone can deliver on their bets, the likely result is another AIG-like meltdown, when a company enters into so many trades that it can’t afford to cover them all if they all fail.
BP doesn't want to front up cash or collateral when it trades in derivatives. "These additional costs will impact the ability of these companies to meet their financial obligations, threaten needed job creation, and significantly weaken the ability of American companies to compete globally,” the Coalition for Derivatives End-Users wrote in a April 28, 2010, letter urging Congress to include an exemption for end-users, the non-financial companies that use derivatives as part of their business practices of hedging risk. (The letter was signed by the American Petroleum Institute, of which BP America is a member.) In addition to its membership in the end-users coalition, BP America hired the Podesta Group, a powerful Washington firm, to lobby this year on derivatives and other financial reform issues on Capitol Hill, according to the Center for Responsive Politics.
The coalition including BP did manage to win its exemption from the House in their version of the bill, but they failed to secure it in the Senate derivatives reform coming out of the Ag committee. No word yet on whether there will be a BP carve-out amendment offered in the Senate.