In This Article
Subscribe to Business UpdatesGay Revelations Force Out BP Head
May 01, 2007 02:15 PM
by
findingDulcinea Staff
BP CEO John Browne resigns in response to a ruling from the highest U.K. legal authority that he cannot prevent a British newspaper from publishing details of his private life.
30 Second Summary
For four months, Browne sought to prevent the Mail on Sunday from publishing his ex-lover’s account of their relationship. On May 1, the House of Lords, the second chamber in the U.K. parliament, voted against Browne’s appeal. He resigned the same day.
In a statement to the press, Browne admitted deceiving the court that ruled against him in February. He said “fears of embarrassment” prompted him to cover up the fact that he met Jeff Chevalier through an escort agency.
Browne may now face charges of perjury.
The exact details of Chevalier’s story are not yet known, but the court heard that Chevalier alleged that Browne betrayed his stockholders’ trust. The judge ruled that BP shareholders had a right to hear these claims even if they were “not accurate or exaggerated.”
Under Browne’s supervision, BP grew into one of the world’s largest oil interests. But the company’s recent past has been troubled. A deadly accident at a Texan refinery and a serious leak at an Alaskan pipeline have led to investigations into Browne’s management.
In a statement to the press, Browne admitted deceiving the court that ruled against him in February. He said “fears of embarrassment” prompted him to cover up the fact that he met Jeff Chevalier through an escort agency.
Browne may now face charges of perjury.
The exact details of Chevalier’s story are not yet known, but the court heard that Chevalier alleged that Browne betrayed his stockholders’ trust. The judge ruled that BP shareholders had a right to hear these claims even if they were “not accurate or exaggerated.”
Under Browne’s supervision, BP grew into one of the world’s largest oil interests. But the company’s recent past has been troubled. A deadly accident at a Texan refinery and a serious leak at an Alaskan pipeline have led to investigations into Browne’s management.
Headline
The day after Browne's resignation, BP shares rose by a modest 0.1 percent on the London Stock Exchange to 556 pence. The company’s share price was unchanged on the New York stock exchange, closing at $67.32.
Source: The New York Times
Browne claimed that he met Chevalier while jogging in a London park. In fact, they made contact through an escort agency’s Web site.
Source: The Guardian
Chevalier claimed that Lord Browne had secretly considered moving BP out of the United Kingdom to a more favorable tax environment. According to the Mail, it was this claim that prompted Browne to launch his legal action against the newspaper. A move off shore would have, says the Mail, led to other major U.K. firms following suit. In addition, "allegations of misuse of BP assets and breaches of confidentiality" remained at the time of writing subject to a court injunction.
Source: The Mail on Sunday
Reactions
The Mail on Sunday welcomed the House of Lords ruling. The paper compared Browne’s behavior to that of two Tory MPs who were imprisoned for lying to the courts shortly after Tony Blair came to power in 1997. The Mail “will be making its evidence in this case available to the Attorney-General.”
Source: The Mail on Sunday
Background
In early April, Browne announced that he would leave BP to join private equity firm Apax at the end of July, 18 months ahead of schedule. The previous year and a half had been difficult, with boardroom rows and investigations into BP’s safety standards.
Source: The Daily Telegraph
In August 2006, BP’s Alaskan operation lost three-quarters of its production capacity because of corrosion on its Prudhoe Bay pipeline. In 2005, an accident at a Texas refinery killed 15 employees and injured hundreds more. An October 2006 article in Fortune considers the challenges that faced beleaguered CEO Browne.
Source: Fortune magazine
In the wake of the negative publicity caused by the Alaskan pipeline incident, Browne gave an interview to the Washington Post in August 2006. He defended BP’s green image that he had helped create: “If this is PR, I can think of a much cheaper way of doing it.”
Source: The Washington Post
Despite its problems, “BP still leads the industry in green actions,” according to Mother Jones. Since the late 1990s, Browne has argued that the oil industry should work toward the transition to alternative fuels.
Source: Mother Jones
Opinion
Though British gay right activist Peter Tatchell finds it regrettable that Browne couldn’t declare his sexuality, he writes that “there was no demonstrable public interest grounds for the Mail on Sunday … outing Lord Browne.”
Source: The Guardian
A writer for conservative newspaper the Telegraph praises Browne’s business savvy and pioneering spirit, bewailing the fact that a moment of panic led him to lie: “It is tragic that he bows out in such a way.”
Source: The Daily Telegraph
“Browne’s fall from grace has little to do with a desperation to keep his sexual preferences secret, and everything to do with arrogance, hubris and an assumption that he could lie with impunity to destroy someone to whom he was once close.” So says another Telegraph writer.
Source: The Daily Telegraph
A Guardian business writer argues that as business leaders wield substantial political power, as was the case in this instance, “They will have to accept that they cannot expect the same degree of privacy as the average citizen.”
Source: The Guardian
Key Players
John Browne became BP’s CEO in 1995 and oversaw the takeover of Amoco and Arco, the first of the oil company megamergers. In 2004, Time magazine put him among its top 100 “builders and titans.”
Source: Time magazine
On John Browne’s resignation as BP’s CEO, Tony Hayward took his place. Hayward was slated to replace Browne in July 2006.
Source: BP
Reference Material
“The allegations are full of misleading and erroneous claims. I deny categorically any allegations of improper conduct relating to BP.” So says Browne’s resignation statement, the full text of which is available online.
Source: The Daily Telegraph
The court ruling against Browne was issued in February, prompting the CEO to take his case to the House of Lords.
Source: Court Ruling
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