- The Washington Times - Sunday, June 27, 2010

Steven E. Koonin, undersecretary for science at the Department of Energy, reported receiving a host of lucrative corporate payouts and perks when he left his job as chief scientist at oil giant BP last year to join the Obama administration.

But because of Mr. Koonin’s extensive ties to BP, he can’t have anything to do with the most pressing issue now facing the Energy Department: how to stop up to 2.5 million gallons of oil a day from gushing into the open waters of the Gulf of Mexico.

Mr. Koonin took home $1.8 million in BP compensation and bonus money during 2008 and the first three months of 2009. That doesn’t include an additional $244,600 in BP bonuses he listed as a “receivable,” as well as additional BP stock assets worth more than $1 million, U.S. Office of Government Ethics filings show.

What’s more, BP is continuing to pay to prepare Mr. Koonin’s tax returns through 2011, and it paid for temporary housing, a per-diem and a rental car when he returned to the United States before he took the DOE job, according to the records.

A copy of Mr. Koonin’s financial disclosure was obtained by The Washington Times.

The government filings give additional insight into compensation practices at the oil company, which are coming under sharp scrutiny in Congress following the oil spill. Unlike a handful of other top executives, Mr. Koonin’s pay package and corporate perks were not required to be disclosed in regulatory filings and only became a matter of public record because he joined the federal government.

When Mr. Obama nominated Mr. Koonin to the energy post last year, the White House highlighted Mr. Koonin’s work for BP “guiding the company’s long-range technology strategy, particularly in alternative and renewable energy sources.” And his official Department of Energy biography notes that, among other duties, Mr. Koonin provided “technical advice to senior executives” while at BP.

Energy officials say Mr. Koonin’s recusal from taking part in the department’s oil-spill efforts hasn’t affected their response: “The department has had a team of more than 200 scientists, engineers and other experts from our national labs working to assist the efforts to stop the oil spill,” Energy Department spokeswoman Stephanie Mueller said.

“The secretary [Steven Chu] has high regard for the undersecretarys scientific expertise, but has had no shortage of expert input over the past several weeks. He fully supports the government ethics rules and expects every department employee to abide by them,” she added.

Lawrence M. Cathles III, a professor of earth and atmospheric sciences at Cornell University, who has served on several committees of the National Research Council, said he wasn’t sure Mr. Koonin should be barred from working on the oil-spill crisis.

“Who but someone from the industry really knows what’s going on?” he said. “If he says it upfront and everyone knows about [his work at BP], he could offer opinions, and people would just have to factor in whether he’s defending the company,” Mr. Cathles said.

The government ethics form also states that Mr. Koonin planned to forfeit unvested BP shares prior to joining the government, adding that the tax-preparation arrangement was pursuant to BP company policy.

Energy officials also said Mr. Koonin lived and worked in London while at BP, and so as a U.S. citizen, his tax filings were unusually complicated, with BP paying the tax differential between U.S. tax rates and the higher United Kingdom tax rates.

Because BP was responsible for paying part of the tax, the company insisted on being responsible for his tax preparation and filings, officials said. In Mr. Koonin’s case, his tax preparation extends to this year and next year because of “complicated international carryover tax provisions.”

In addition, officials at the department also say he hasn’t received any compensation for auto and housing expenditures after he became an undersecretary at the department.

BP wasn’t Mr. Koonin’s only source of income. He also listed receiving $53,056 in consulting fees and expenses from the Mitre Corp., a big federal contractor, and honorariums ranging from $400 to $5,000 from various universities. He reported an additional $60,000 in consulting fees from King Abdullah University, $30,000 from the King Abdullah University of Science and Technology Global Research Partnership, and $6,000 each from the Novim Group and Tri Alpha Energy Corp.

Among other agreements with BP, Mr. Koonin noted on his Office of Government Ethics disclosure form that he would receive a lump-sum payout from his non-qualified defined benefit plan 14 months after he left the company, and a cash lump-sum payment from a separate benefit plan in January 2010.

Mr. Koonin wasn’t questioned specifically about his financial ties to BP at his Senate confirmation last year, though he was asked a standard question about whether he had any personal holdings, investments or interests that could contitute a conflict of interest or the appearance of a conflict.

He said he’d taken “appropriate actions to avoid any conflicts of interests.”

“All of my personal assets have been reviewed both by myself and by appropriate ethics counselors within the federal government,” he told members of the Senate Energy and Natural Resources Committee on April 23.

Concerning his years as top scientist at BP, Mr. Koonin told senators, “I’ve helped guide that company’s long-range technology strategy; and in particular, catalyzing a major business and research initiative in biofuels.”

In a 2008 BP publication, Mr. Koonin explained his decision to join the oil company in 2004 from his previous post as provost at the California Institute of Technology.

“BP is a progressive company, but also, because of its size, it allowed me to have an impact at scale,” he was quoted as saying.

BP’s compensation practices have been getting a lot more attention lately.

On June 22, Rep. Charlie Melancon, Louisiana Democrat, wrote to the company’s chairman, calling seven-figure bonuses “inexcusable” when Gulf-area residents suffer job losses. The letter did not mention any BP executives by name other than Chief Executive Officer Tony Hayward.

In the letter, he also wrote that the $3 million in bonus money paid out to Mr. Hayward last year would cover the salaries for 50 offshore workers who have lost their jobs owing to the oil spill. He also called the suspension of bonuses “a small first step in the long process of restoring some semblance of trust between the people of Louisiana and BP.”

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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