Daily Archives: August 19, 2012

Rand Paul Tweets About Federal Hollow Point Bullet Purchases

By Peter Barbour

A hollow point bullet is an expanding bullet that has a pit or hollowed out shape in its tip, often intended to cause the bullet to expand upon entering a target in order to decrease penetration, causing the target to absorb more of the impact and disrupting more tissue as it travels through a body. Hollow point bullets are designed to inflict maximum damage to their targets. They’re not practice rounds. The purpose of hollow points is to kill and maim.

In a trend that has received little attention from the media, various US domestic government agencies have been quietly purchasing millions of rounds of these hollow point bullets and other types of ammunition this year. Senator Rand Paul (KY) took some criticism earlier this week for tweeting about these strange hollow point bullet purchases, which include some of the following examples:

In March, the Department of Homeland Security (DHS) signed a 5 year contract with ATK (an aerospace, defense, and commercial products company) for the purchase of up to 450 million rounds of .40 caliber hollow point bullets (HST). The HST is a hollow-point round that holds its jacket even after passing through barriers. Ron Johnson, President of ATK’s Security and Sporting group said, “We are proud to extend our track record as the prime supplier of .40 caliber duty ammunition for DHS, ICE. The HST is a proven design that will continue to serve those who keep our borders safe.”

Recently the National Oceanic and Atmospheric Administration (NOAA) Fisheries Office of Law Enforcement (initially reported incorrectly as the National Weather Service, NWS) purchased 46,000 rounds of ammunition for semiautomatic pistols, and the Social Security Administration (SSA) bought 174,000 rounds of hollow point bullets. The primary reason given by SSA for the purchase? Training. Here is an excerpt from that statement:

“Media reports expressed concerns over the type of ammunition ordered. In fact, this type of ammunition is standard issue for many law enforcement agencies. OIG’s special agents use this ammunition during their mandatory quarterly firearms qualifications and other training sessions, to ensure agent and public safety. Additionally, the ammunition our agents use is the same type used at the Federal Law Enforcement Training Center.
Our special agents need to be armed and trained appropriately. They not only investigate allegations of Social Security fraud, but they also are called to respond to threats against Social Security offices, employees, and customers.”

Finally, there are reports from Reuters reporter Jason Reed and Irish Daily Mail columnist Mary Ellen Synon (who was also a London-based associate producer for CBS News 60 Minutes) that both say, “The DHS is also planning to purchase a further 750 million rounds of different types of ammo in a separate solicitation…including 357 mag rounds that are able to penetrate walls.”

Such large acquisitions of such deadly ammunition by so many federal domestic agencies– including some puzzling ones like the Social Security Administration– all over such a short period of time might reasonably be expected to elicit some kind of response or comment from the White House and Congress. But they haven’t, with the exception of Sen. Rand Paul, whose reaction last week was to tweet: See Here

Senator Paul was blasted immediately for his tweet by various sources (e.g. Daily Kos, Think Progress) because he incorrectly identified the rounds as going to the National Weather Service instead of NOAA. Paul didn’t even make an accusation, nor ask a question. He simply tweeted what was originally reported by media sources– that the NWS had purchased 46,000 rounds of ammunition.

Because millions of rounds of deadly ammunition have been purchased this year, primarily by DHS, it’s not unreasonable for voters and policymakers to ask questions about it. Why purchase so much ammo, and how will it be used? Why purchase hollow point bullets for training, as SSA is claiming, instead of cheaper firing range bullets? And how does this year’s quantity and type of ammunition purchases by DHS and other government agencies compare to the quantity and type of ammunition in prior year purchases?

And why isn’t the mainstream media asking these questions more?

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Fed’s explanation of hollow point bullets raises more questions

By: Anthony Martin

News reports indicating that multiple agencies of the federal government have ordered and are stockpiling multimillions of rounds of ammunition have pressured the Feds to offer an explanation. But the official explanation has only raised more questions.

On Friday the government stated that the hollow point bullets it has procured are “standard issue” and that they are used to train security agents used by each of the various federal agencies.

However, according to retired Maj. Gen. Jerry Curry, a decorated Army war veteran, the Feds’ explanation about the bullets fails to pass the smell test.

When this reporter first heard the government’s explanation for the hollow point bullets, the warning bells immediately rang indicating a cover up. As every gun owner knows if they are serious about developing and maintaining their shooting skills, the type of bullets used for practice at the firing range are normally different from the ammunition one would use when getting the firearm set to be used in the event of a home invasion or other situations in which one’s life is in mortal danger.

Firing range bullets are much less expensive and are not designed for the day to day use of the gun for maximum self protection. One uses the more expensive variety, such as hollow point bullets, for real-life danger.

Thus, immediately this reporter knew that when the government claimed that its agencies had purchased multimillions of rounds of hollow point bullets for “practice and training” at the firing range, something was amiss. Most citizens are likely unaware that such ammo is not used for practice and will accept the government’s explanation at face value. This is in all likelihood what the Feds are counting on.

And when Maj. Gen. Curry confirmed these suspicions in his article for The Daily Caller, it became clear that the Obama Administration has not been honest with the public concerning the current mass stockpiling of ammunition.

Curry stated,

Hollow point bullets are so lethal that the Geneva Convention does not allow their use on the battle field in time of war. Hollow point bullets don’t just stop or hurt people, they penetrate the body, spread out, fragment and cause maximum damage to the body’s organs. Death often follows.

In addition, Curry noted that during the Iraq War the U.S. military used 70 million rounds of ammunition per year. Compare that with the 750 million rounds of hollow point bullets that the Department of Homeland Security (DHS) ordered in March. And then it further ordered another 750 million rounds of various types of ammunition, some of which can penetrate walls. Curry declared,

This is enough ammunition to empty five rounds into the body of every living American citizen. Is this something we and the Congress should be concerned about? What’s the plan that requires so many dead Americans, even during times of civil unrest? Has Congress and the Administration vetted the plan in public.

I fear that Congress won’t take these ammunition purchases seriously until they are all led from Capitol Hill in handcuffs. Why buy all this ammunition unless you plan to use it. Unknown to Congress, Does DHS plan to declare war on some country? Shouldn’t Congress hold hearings on why the Administration is stockpiling this ammunition all across the nation? How will it be used; what are the Administration’s plans?

The other factor that is raising significant concerns about the ammo purchases is that the U.S. military and various law enforcement agencies at both the federal and local levels have enough fire power to adequately respond to any emergency or threat. But DHS now has enough ammo on its own to kill every single American citizen plus potential invaders such as Syrians, Iranians, or Mexicans.

Why? And for what purpose?

As a career Army officer, Maj. Gen. Curry believes that the stockpiling of this ammo is enough to warrant a congressional investigation, including an order from Congress that the purchases of hollow point bullets be stopped immediately.

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As ATP Oil Files For Bankruptcy, CEO Blames Obama For Company’s Collapse

Christopher Helman, Forbes Staff

I’m based in Houston, Texas, energy capital of the world.

Paul Buhlman swears the president’s ban on deepwater drilling killed his oil company. The whole story is a bit more complex.

(This story will appear in the Sept. 11, 2012 issue of Forbes Magazine)

When I get Paul Bulmahn on the phone rumors are swirling that he’s just days from putting his company, ATP Oil & Gas, into Chapter 11. He can’t confirm it yet, but he wants to make one thing perfectly clear: If it does come to bankruptcy (which it did on August 17) it isn’t his fault. The founder and chairman of publicly traded ATP (Nasdaq:ATPG), Bulmahn wants the world to know that the Obama Administration—and its illegal ban on deepwater drilling in the wake of the BP disaster—is to blame for the implosion of his company. Not him.

“It is all directly attributable to what the government did to us,” he rails. “This Administration has gone out of its way to create problems for my company, the company that I formed from scratch.” He’s more than angry. Bulmahn, 68, has already brought suit against the U.S. government seeking damages ($68 million to start with) for the 2010 moratorium that shut down deepwater operations in the Gulf of Mexico for the better part of a year. In an earlier case brought by ATP and rig company Ensco, Federal District Judge Martin Feldman ruled in May 2011 that the feds “acted unlawfully by unreasonably delaying action” on drilling permit applications. Still, ATP has a long, winding road to any hope of recovering damages from the government (which says it’s protected from claims by sovereign immunity).

That’s proving disastrous for Bulmahn. While hundreds of companies with operations in the gulf were affected by the government’s decision, perhaps no other was as hard hit as ATP—or as vulnerable. In 2010 the company had completed work on its $800 million deepwater production platform Titan and floated it out to the deepwater Telemark field 160 miles south of New Orleans. Bulmahn planned for Titan to complete drilling the final feet of four wells, hook them up, and let the oil—and the cash—start rolling in.

On April 19, 2010 ATP refinanced and rolled up $1.5 billion in debt into a new bond issue “and celebrated with champagne.” He says that at the time ATP stood a good chance of doubling its oil and gas volumes to 50,000 barrels per day within a year.

But the Deepwater Horizon exploded April 20. “We didn’t foresee an impact. The Titan is 80 miles farther south, and the spill is going to drift to the north,” says Bulmahn. Underwriter JPMorgan agreed, and it closed on the bond offering.

Soon ATP was informed by regulators that it would not be allowed to complete those Telemark wells, even though Titan was already outfitted with all the safety redun- dancies subsequently required for deepwater work. “They closed our spigot on revenues, but didn’t stop our expenses” for interest payments, rig contracts and the like. Bulmahn scrambled to spin off Titan as a subsidiary and borrowed $350 million more against it. ATP posted a net loss of $349 million in 2010.

It hasn’t gotten much better since. Overleveraged, ATP was balanced on a knife edge. The final Telemark wells didn’t get hooked up until earlier this year. Meanwhile, ATP has been burning through cash on what appears to be an ill-advised exploratory drilling campaign off Israel. In the past year ATP has lost $250 million on $600 million in revenues and now heads into bankruptcy, crushed by $2.7 billion in long-term debt and obligations and $300 million in annual interest payments. Bulmahn’s shares used to be worth $400 million; now they’re worthless.

But, say those who know ATP, you can only blame the Obama Administration for so much of the drama. “The moratorium had an effect on a lot of companies, but this is the only one blaming the moratorium two years later,” says an oil executive with direct knowledge of ATP.

Ravi Kamath, high-yield analyst with Global Hunter Securities, has been bearish on ATP for years and had a sell rating on ATP debt since early 2011, when it was trading at 104 cents on the dollar. It’s fallen to 29 cents now. Kamath says ATP’s problems reach far beyond the moratorium. He keeps a spreadsheet with 105 instances from the past decade where he says ATP has overpromised and then underdelivered. “Bulmahn has said lots of stuff that never happened,” says Kamath. “They have 11 years of bad forecasts.”

The first Telemark well was hooked up to Titan before the BP blowout, “but the project was already a year behind schedule and over budget.” Multiyear delays were normal at other ATP fields, too. What’s more, in August 2011 ATP said the third Telemark well was going to deliver 7,000 barrels per day. One month later the well was doing only 3,500. “With their cost of capital it’s just crazy to invest hundreds of millions to build a platform from scratch,” says Kamath. “They live in fantasyland.”

Yet instead of slashing costs and circling wagons, Bulmahn in late 2010 chose to take ATP on an international adventure. “I felt the need to find a way to keep our technically expert people occupied,” he says. That meant forging a deal with Isramco to drill an exploratory well offshore of Israel, near an area that has seen some massive natural gas discoveries. One well was finished in June; drilled to a depth of 14,000 feet it tapped as much as 800 billion cubic feet of gas. Sounds good, but it will be years before the infrastructure can be put in place to harvest it. Meanwhile ATP has $40 million in costs sunk off the coast of Israel.

Bulmahn says he’d like to retire; he owns a horse farm in Florida and has cashed out $100 million in ATP stock over the years (though, he insists, he’s eschewed $7 million in bonuses granted him since 2009). Earlier in 2012 he hired Matt McCarroll as ATP’s new CEO. McCarroll had expanded deepwater operator Dynamic Offshore Resources and sold it to SandRidge Energy for $1.3 billion. Yet after a week at ATP McCarroll left and rescinded his agreement to buy 1 million shares. The belief is that McCarroll was scared off by Bulmahn’s unwillingness to back a complete overhaul of ATP. Trying to salvage the status quo wasn’t an option. “He wasn’t the right fit,” says Bulmahn. McCarroll declined comment.

So what happens to ATP from here? They have already secured $600 million in debtor-in-possession financing, but after first-lien holders like Michael Dell’s MSD Capital are paid off, that won’t get it very far. Analysts say investors holding common shares, preferreds, convertible bonds and unsecured debt will get wiped out. Buyout bids are welcome.

So at this point, legal claims might be the most valuable asset ATP has left. In addition to the case pending against the U.S. government, ATP is pursuing claims against deep-pocketed BP. Who knows? With luck and lawyers, Bulmahn could still strike something.

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More from the archives:

Texas Oilman Tired Of Being Victimized By Obama Drilling Ban

ATP Oil To Explore Near New Israeli Mega-Discoveries

Will ATP Have Better Luck In Israel Than The Gulf Of Mexico?

Obama Re-Bans Drilling Off Florida

ATP Files for Bankruptcy. Blames Drilling Moratorium (USA)

ATP Oil & Gas, a Gulf of Mexico focused operator, on Friday, August 17, filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.

ATP has taken this action in order to undertake a comprehensive financial restructuring.

“ATP expects its oil and gas operations to continue in the ordinary course throughout the reorganization process and sees the reorganization as a helpful step towards deleveraging the company to position it for future development of its assets. ATP believes that the rights and protections afforded it by a court-supervised reorganization process, including the ability to access new financing, will provide ATP with the time and flexibility it needs to fully address its financial challenges and position ATP for long-term viability,” wrote ATP in a press release.

The company said that the the primary reason for the reorganization began with the Macondo well blowout in April 2010 and the imposition beginning in May 2010 of the moratoria on drilling and related activities in the Gulf of Mexico.

“These events prevented ATP from bringing to production in 2010 and in early 2011 six development wells that would have added significant production to ATP. As of the date of this filing, three of these wells are yet to be drilled. Had ATP been allowed to drill and complete these wells, ATP believes it would have provided a material production change in 2010 continuing to today. This projected increase in production should have substantially increased cash flows, shareholder value and allowed the company the ability to withstand normal operational issues experienced by owners of oil and gas properties in the Gulf of Mexico. In addition, these incremental cash flows would have mitigated or prevented the need to enter into many of the financings ATP has closed since the imposition of the moratoria—financings that require relatively high rates of return and monthly payments” said the company in a statement.

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USA: Golden Pass Files with DOE to Export LNG

Golden Pass Products, a partnership of Qatar Petroleum International and ExxonMobil affiliates, has submitted an application to the U.S. Department of Energy (DOE) to export liquefied natural gas (LNG) from the Golden Pass LNG receiving terminal at Sabine Pass, Texas.

The proposed project involves construction of natural gas liquefaction and export capabilities at the existing Golden Pass LNG facility. A final investment decision will be made following government and regulatory approvals.

If developed, the project would represent approximately $10 billion of investment on the Gulf Coast, generating billions of dollars of economic growth at local, state and national levels and millions of dollars in taxes to local, state and federal governments. The project would generate approximately 9,000 construction jobs over five years with peak construction employment reaching about 3,000 jobs.

The proposed project would have the capacity to send out approximately 15.6 million tons of LNG per year. New infrastructure required to export will be located on the existing property, which currently contains two berths for LNG tankers, five storage tanks and access to the Golden Pass pipeline. The expanded facility would then have the capability and flexibility to both import and export natural gas.

The proposed expansion of Golden Pass is an opportunity to capitalize on America’s abundant natural gas resources. The Energy Information Administration’s Annual Energy Outlook 2012 shows that the United States has substantial gas supplies that can support gas exports, including LNG exports, over the longer term.

The application filed with the DOE is to export natural gas to nations that have existing free trade agreements (FTA) with the United States. A similar application is planned for non-FTA countries.

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