'Moving on' from the Deepwater Horizon environmental catastrophe, Tony Hayward is now set to make millions from a Kurdistan oil deal
former BP CEO Tony Hayward
'Public disgrace – the fact of it, whether justified or not – no longer presents an obstacle to powerful careers' … Ian Jack on Tony Hayward. Photograph: LARRY DOWNING/REUTERS
guardian.co.uk, Friday 16 September 2011 20.30
Do the rich and powerful ever sink? After an explosion wrecked the Deepwater Horizon rig last year, killing 11 workers, nearly 5m barrels of oil gushed into the Gulf of Mexico over the following three months. It was the biggest marine oil spill in history – an environmental catastrophe with effects that will be felt for many years. BP, to whom the rig was under contract, set up a $20bn (£12.6bn) fund to compensate the victims, selling assets as it watched its share price tumble. City and Wall Street rumours suggested BP couldn't survive. The company's chief executive, Tony Hayward, came to be vilified across America for what looked like insouciance in the face of a seemingly unstoppable disaster, a man with a flair for bad PR. In the early days of the leak he offered the consolation that the spillage was tiny compared to the size of the ocean. Later, as the oil came ashore, he apologised for the disruption to the livelihoods of fishing and tourist communities, and said that he too wanted his "life back". "He wouldn't be working for me after any of those statements," President Obama said, and by the end of the year, he had left BP.
What was to be his life thereafter? Hayward was 53 when he parted from the company he'd served for nearly 30 years, eventually on a salary of $6m.
The pension and severance package must have been generous. He could have reflected bitterly on the unfairness of his role as the lightning conductor for blame – as he said, Deepwater Horizon was a complex accident involving several companies – and then "moved on". He might have run a charity for tarred seabirds or, as a geologist, spent days with a hammer on the Dorset coast. Directorships could have supplemented his income. It would have been a quieter life – more time on the yacht – but by no means a poor one.
But Hayward did none of these things. Instead, he created an investment vehicle called Vallares with initial capital of £100m provided by Nat Rothschild, two other businessmen and himself. Stock market flotation raised £1.35bn, and this month Hayward, as Vallares's chief executive, announced that new shares worth a similar amount would be sold to finance a merger (technically, a reverse takeover) with a Turkish company, Genel Energy International, which holds rights to oil reserves in the Iraqi province of Kurdistan. Hayward will replace the Turkish entrepreneur Mehmet Sepil as Genel's CEO, clearing the way to a stock exchange listing that may have been problematic had Sepil, who was fined £1m last year for insider trading, remained in day-to-day charge rather than assuming his new role as president.
The company aims to be included in the FTSE 100 next year. The potential is enormous. In Hayward's words, Kurdistan may be "the last big on-shore 'easy' oil province available for exploration by private companies anywhere in the world", with reserves equivalent to the North Sea's before those were exploited. Already, thanks to his initial stake, Hayward is several million pounds richer.
I read this in the business pages last week. Elsewhere, the same paper recorded that a Manchester man had been jailed for 18 months for handling stolen goods (a 37in TV) in the riots. No one has accused Hayward of criminal behaviour, whatever the record of his new company's president, but the contrast in the consequences of two successive summer outrages is a striking one. The Deepwater Horizon crisis made Hayward the focus of American loathing in 2010, just as this year's looters had Britain's public and politicians calling for punishment and revenge.
But capitalism has encouraged Hayward to "move on" in a way it won't be doing anytime soon to anyone found with a stolen TV in the boot of their car. Public disgrace – the fact of it, whether justified or not – no longer presents an obstacle to powerful careers.
A century ago, disgrace had a different effect. The chairman and managing director of White Star Line, J Bruce Ismay, felt the full force of American contempt when the Titanic went down in 1912, and he never recovered. Many of the charges against him echo those raised against Hayward: that he neglected safety in pursuit of competition and profit. Hadn't he persuaded his captain to work up maximum speed while the ship entered an ice field? Hadn't he refused to equip the ship with more lifeboats because they would over-crowd the promenade deck? Nothing was ever proven.
Incontestably, however, he had escaped on a lifeboat when more than 1,000 of his company's passengers, including women and children, waited to be saved. He made a plausible case for his behaviour – he jumped into the boat at the last moment, he insisted, because no more women and children answered his call – but the shame never died. For HG Wells, capitalism's "noble pretension" had jumped downwards with Ismay: "He was a rich man and a ruling man, but in the test he was not a proud man." The powerful had been seen to be no better than the rest of us.
Like Hayward, he ran a company that had become only superficially British. Inheriting White Star from his father, his first act as owner had been to sell it to the Wall Street behemoth J Pierpont Morgan, who included it in the portfolio of his interests known as International Mercantile Marine. Like Hayward, he faced hostile Washington committees of inquiry who grew angry with his blocking answers: "I do not know" and "I could not say" (Ismay); "I am not a cement engineer" (Hayward). Neither man could charm the media. To American reporters, Ismay came across as disdainful and arrogant ("J Brute Ismay"); and in any case, he had previously made an enemy of the press magnate William Randolph Hearst, whose papers now crucified him as a cowardly aristo from the old world.
The details of Ismay's subsequent life are contained in a fine new biography by Frances Wilson. The next year, aged 50, he quit White Star and spent increasing amounts of time at his house in Connemara. A kind of normality continued. As Wilson writes, he understood the difference between surviving and being alive. He remained a director of railway and insurance companies, but travelled to meetings with the carriage blinds drawn. His unhappy marriage went on being unhappy. He never returned to New York in the 24 years he had left to live, and a household rule banned the Titanic from mention.
Reports, probably invented, said that when Irish children passed his gate they chanted: "Coward, coward, coward."
Pauline Matarasso, Ismay's granddaughter, has written of how much family conversation liked to stick firmly to facts: "Without a moral dimension, without words like hubris, competition, guilt, greed, hedonism, the event [the Titanic] was drained of emotion like a stuck pig of blood. It was their way of surviving; they could cope with a corpse." Her grandfather, she added, was "a corpse himself".
One might argue that disgrace didn't sink him, any more that it sinks the powerful today. One might also wonder how much he regretted passing up the opportunity to sink, literally, like his 1,500 dead passengers and crew. But at best, Ismay persisted as an undersea creature, shy and seldom seen. He never got his life back. This is what shame and feelings of personal responsibility did, once upon a time.