Congressional "Fact Finding": Today's BP Hearing

I've watched a fair amount of today's Congressional hearing featuring BP CEO Tony Hayward, and I must admit that both Hayward and most of the members of Congress have behaved dreadfully.

It started yesterday, when retiring Michigan Democrat Bart Stupak apparently said Hayward would be "sliced" up by the Congress' members during the hearing. The absence of fairness and decorum in the House is truly stunning. It's living down to our Founding Fathers' view of the chamber as filled with mannerless rabble.

One Texas Republican Representative, in his opening statement, correctly characterized the $20B fund which BP was coerced by the administration into offering as a "shakedown." Every single other member whom I've heard speak has basically used the hearing to grandstand, bully and embarrass Hayward, while admitting absolutely no culpability on the part of federal regulators or the Congress' own legislation which has required deep water drilling in the first place.

Hayward, for his part, is about the worst guy BP could possibly have as its public face. When a demonstrator was forcibly removed from the proceedings, Hayward sported a grin from ear to ear that looked remarkably inappropriate.

Michigan Democrat "Tailpipe Johnny" Dingell repeated the performance he crafted for the Goldman Sachs CDO hearing, requiring "yes" or "no" replies to questions he knew that Hayward could not answer, because they were operationally-oriented and applied to lower-level BP or contractor employees engaged in managing the actually drilling on the rig which exploded.

Hayward looked totally out of touch with the operations of his company during that exchange. It's sort of hard to believe that he wouldn't have brought either documentation concerning the rig's operation, or a lieutenant with more direct knowledge of the decisions about which questions were asked. Additionally, he gave needlessly vague, circuitous replies to many questions, which did give the distinct impression that he desired to be evasive. His expression was often disdainful, which doesn't come across as either sympathetic or empathetic. In the situation at hand, that's a mistake.

Never the less, Dingell made a telling point. He homed in on whether BP had made decisions based on saving money and time. The overall impression left by Hayward is that BP saved, at best, less than $20MM and maybe a few weeks' of time by apparently skipping on steps which would have resulted in safer drilling and perhaps the avoidance of the deep water blowout.

I've noticed in Hayward a disturbing trait. Maybe it's because he's British, or maybe because he is of the particular class he is, but his answers impart a decidedly distant, uncaring tone. He seems profoundly detached from the incident, offering only an annoyingly repetitive "very sorry" at every turn.

Combined with his chairman's gaffe yesterday referring to the "small people" along the affected Gulf Coast, Hayward didn't help BP's cause or image today.

Truth be told, in its zeal to roast BP's CEO, the members of Congress apparently failed to understand that, by the necessity of operation of a large company, Hayward couldn't answer, under oath, most of the detailed rig operation questions put to him. Anyone watching for more than ten minutes would have, I think, like me, quickly deduced that the Congressmen were simply piling on an easy target with ludicrous questions, given that Hayward wasn't the supervising manager of the failed rig.

In short, a lot of wasted time.

But, additionally, as I'll discuss tomorrow, like the Goldman hearings on CDOs, and earlier bank CEO grillings, yet another example of why global businesses should think twice now before choosing to enter the US market.