Gansler sues BP over alleged spill-related pension loss
By By Justin George and The Baltimore Sun
Apr 21, 2014 at 12:48 PM
Maryland Attorney General Douglas F. Gansler has filed a lawsuit against oil company BP over investment losses following the 2010 Deepwater Horizon explosion, alleging that the state's pension fund lost millions after the company misled the public about its safety protocols.
BP made "false and misleading statements regarding its commitment to safety reforms and oil spill prevention and response capabilities," Gansler said. He said those misstatements gave investors like the Maryland pension fund unwarranted confidence in the company, which should "be held accountable for the losses that have occurred."
The attorney general filed the 100-plus-page lawsuit in U.S. District Court in Texas on Friday, seeking at least $15 million in damages. BP America is based in Houston.
BP declined to comment.
The company's stock plummeted after the April 2010 Deepwater Horizon oil spill in the Gulf of Mexico, one of the largest in history.
Gansler, who is running for governor to replace the term-limited Martin O'Malley, said he did not know how many BP shares the state pension system owned or how much the shares lost in value. The lawsuit also seeks court costs and lawyer fees.
The state's $44 billion pension system, which administers benefits for more than 382,000 retirees and employees, invested in shares of BP between November 2007 and April 2010, according to the lawsuit.
According to an annual report, Maryland's pension system owned 9.6 million shares valued at $75 million as of June 2009.
The lawsuit alleges that BP made false and misleading statements about implementing specific safety protocols after "numerous accidents" before the spill, and about how much oil was flowing into the gulf after the accident.
The suit is similar to ones filed by funds in Ohio and New York, which also argued that the company made misleading statements that caused their retirement funds to lose value.
"I can assure you that if this spill affected our pension system by as much as Mr. Gansler claims, then our pension was not properly diversified, putting it at a high risk," said George.
Harford County Executive David R. Craig, also a Republican candidate for governor, said Gansler's office should focus on contractors the state hired to build its flawed health insurance exchange.
Gansler agreed that the state pension system had been mismanaged but said he had no role in how it invested money. He also noted he didn't play a role in selecting the exchange contractors.
Update: Gansler later asked to clarify his comments. He said he did not intend to criticize the way the state's trustees have managed the state's pension investments, but disagreed with the administration and General Assembly's decision to use pension money to cover the budget.
Baltimore Sun reporters Erin Cox and Justin Fenton contributed to this article.