by Rob Galbraith and Gin Armstrong
Freeport-McMoRan is far and away the largest oil and gas producer in Los Angeles, with 1,311 active wells in Los Angeles County according California’s Division of Oil, Gas, and Geothermal Resources. The corporation, a multinational mining giant, acquired most of its Los Angeles wells in its 2012 purchase of Plains Exploration and Production, which brought the Inglewood oil field, the largest urban oilfield in the United States, into Freeport-McMoRan’s portfolio. The Inglewood oil field is home to 911 wells, 16% of all wells in Los Angeles County.
At Freeport’s annual meeting on June 8, the shareholder advocacy group As You Sow introduced a resolution requesting that the company report on its enhanced oil recovery operations, including steps it is taking to mitigate negative environmental and health effects. The proposal noted that “oil operations have the potential to contaminate water supplies, release toxic fumes, and harm communities.”
The board of directors urged shareholders to vote against the resolution.
Freeport’s board – primarily wealthy white men – are unlikely to directly face the health impacts of their company’s drilling. A 2014 Natural Resources Defense Council report found that the impacts of drilling in California are disproportionately visited upon low-income communities and communities of color and that in Los Angeles County, 78% of the people living within a quarter mile of a gas well were black or Latino.
In a February Los Angeles Times story, Manuel Pastor, the director of the University of Southern California’s Program for Environmental and Regional Equity, noted that polluting industries locate in poor and minority communities because they are less likely to face political opposition as people in these communities tend to rent their homes, are less likely to be strong English speakers, and are more likely to be in the country without documentation.
The majority of the population of Inglewood, where Freeport-McMoRan’s urban drilling is concentrated, is people of color. The US Census Bureau estimated that in 2014 42.7% of the population was black, 28.2% was white, 0.6% was Native American, 1.3% was Asian, 0.4% was Pacific Islander, and 23.6% was some other race. A majority of Inglewood’s population – 57.8% – earned less than $50,000 per year, and the median household income was $42,249.
By contrast, the median income of Freeport-McMoRan’s board is $414,209. Richard C Adkerson, Freeport’s Vice Chairman, President, and CEO, earned $8.6 million in cash and stock from the corporation in 2015 and James C Flores, the president of the company’s oil and gas unit, earned $6.4 million. Outgoing chairman James R Moffett was awarded a $16 million severance package.
While it is often the case that a corporation’s executives and owners are insulated from the negative impacts of their business, the example set by Freeport-McMoRan is especially stark.
Freeport’s largest shareholder is the notorious corporate raider and activist investor Carl Icahn. Icahn’s 104 million shares in the company equals 9% of Freeport-McMoRan’s total shares and is valued at $1.1 billion. Icahn’s two representatives on the Freeport board were each paid more than $140,000 in 2015.
Icahn’s pursuit of personal gain has resulted in the destruction of more than 35,000 American jobs and the elimination of pensions or health benefits for more than 126,000 families, according to a recent report released by Hedge Clippers and Take On Wall Street with research from LittleSis.
Republican presidential candidate Donald Trump has floated Icahn as his potential pick to run the Treasury.
Profiles of all of Freeport-McMoRan’s directors, with their annual salaries (cash and stock awards), can be seen in the map below: