Some thoughts from a grateful Tunisian/American cabbie:
The driver was recently back in Tunisia. And a curious incident occurred, in the town. A horse reared up and injured somebody (not badly). The owner subdued the horse as quickly as he could. Later, a mob came and beat the owner up, as punishment. “My sister said, ‘Good, he deserved it.’ And she is a doctor, a psychologist. If she thinks this way — that a mob can just do what it wants — what about common people?”
America, he says, has an independent judiciary, and legislatures, and executive branches. In Tunisia — as in most places — it’s all one. The cab driver thinks that the separation of powers is a miracle. Again, amazing what we take for granted.
And one that we’re in danger of losing, when we have a president who thinks that it’s perfectly fine to extort twenty billion dollars from a private business as a political slush fund.
[Update a couple minutes later]
Representative Joe Barton isn’t impressed with the shakedown, either.
And Iain Murray says that Mordor is looking for more wealth to pay its orc mercenaries.
extort twenty billion dollars from a private business as a political slush fund.
What are you talking about? BP is liable for all claims as a result of their disaster. This fund will be administered by the same guy that handled the 9/11 funds. How is this “extortion” or “a political slush fund?”
We’ll see who really handles it.
It’s still not extortion.
Chris, BP should be ordered by court to pay directly after losing a class action lawsuit or series of lawsuits. That will not happen now. Instead, the money is being held by the government, and people who were hurt will have to apply to the government for a piece of it. Which means it will go to politically connected businesses first.
Tort = fair and BP will pay
Government controlled escrow = unfair and not transparent
Orcs don’t get paid, though.
They work because of innate evil and fear of their master.
plutosdad – so the 9/11 fund was unfair? So it’s fair to people who’ve lost their incomes to have to wait years for a court case, and have a third of the reward siphoned off to lawyers? Also, doesn’t government run the court?
Wow Chris, this is bad even for you. If you don’t see the Chavez like nature of this, you’re hopeless.
I just saw on NextBigFuture that a small team of geologists just found $1T in recoverable-grade metals in Afghanistan. So, yeah, you’re welcome.
Bill Maron – I see an oil company who is destroying the Gulf of Mexico. I see a President who, rather than make people wait decades to argue through the courts (the Exxon Valdez case took 20 years) asked BP to put money up now.
I say asked because Obama has no legal authority to force BP to pay. He asked, they said yes. Obama isn’t going to control the payouts – Ken Fineburg, who’s developed a reputation over decades of fair dealing, will control the money.
How this has anything to do with Chavez is beyond me.
BP was going to settle these claims anyway. It looks more like POTUS grandstanding than shakedowning.
BP was going to settle these claims anyway.
It was? You sure?
Because if I was a shareholder and the CEO made that kind of business decision I’d want a change in management RIGHT NOW.
Frankly, BP’s management need it to go down this way or they’re in trouble. I’d actually prefer to know how much work went into yesterday’s “grandstanding” between the BP legal and PR team and the US government, because that deal wasn’t decided yesterday morning.
Anyway, political slush fund? Sheesh Rand, that’s a reach even for you.
Chris Gerrib wrote:
What are you talking about? BP is liable for all claims as a result of their disaster.
They are not liable for anything until found so by a court of law — the judicial branch, not the executive branch.
This fund will be administered by the same guy that handled the 9/11 funds. How is this “extortion” or “a political slush fund?”
It is a slush fund because it is being administered by the executive branch of the government, not a court-appointed manager.
Also, doesn’t government run the court?
The judicial branch of the government, not the executive branch.
Did you not read the words of the Tunisian cab driver?
The separation of powers doctrine is a fundamental foundational principle of the United States government. Seriously, your casting it aside so casually raises serious doubts as to either your understanding or your adherence to American principles.
Mike
Posted On: Apr. 30, 2010 2:30 PM CENTRAL
LONDON (Reuters)—BP P.L.C. will compensate all those affected by an oil spill from one of its wells in the Gulf of Mexico, said its CEO
As Chris Gerrib would say, “Do you not have access to Google on your PC?”
Perhaps it is necessary to remind that post-Exxon Valdez, Congress passed & Clinton signed into law that oil companies are only liable up to $75 million. Anything over that, the Govt pays.
So, yeah, it’s a shakedown.
BTW, this is not the largest spill ever in the Gulf of Mexico (yet).
Michael Kent – if, as documented above, BP was going to pay all claims, then asking / persuading / telling them to set up an escrow fund and get on with it is hardly extortion. Nor is it a violation of separation of powers, since it’s a voluntary agreement.
G. Clark – if you want to argue that BP should only be on the hook for $75 million, so be it. How that’s not a US government bailout of a foreign company is beyond me.
G Clark
Actually,
the law is far more complex then you imagine. BP is liable for ALL
cleanup costs.
They have a 75 million dollar limit in federal court for federal damages,
but they have no caps on state court damages .
The cap also does not apply in cases of Negligence.
The idea is that if in a routine handling accident, they lose
50 barrels over the side it’s a limited liability.
But Given BP is liable for Cleanup Costs, asking them to provide forward funds is actually within the law.
The resource protection act and Oil Spill Protection act can allow the Government to request Bonds for clean up costs.
Most states require you to provide a shutin bond for regular wells, in case
it goes bad, you have to close the well or leave money so the state can.
I knew a guy his house burned, State Farm wrote him a check that day for $30K, they figured he was going to need to buy clothers, rent an apartment,
etc…. They didn’t have to litigate up front for that.
BP is clearly on the stick for Billions in damages, they may as well
cough up some money.
Personally I think BP is on the stick for a trillion dollars in losses.
Every Fisherman, Every Resort, Every Resort Worker, has a claim.
Every Property owner has damages.
Didn’t Rand own a place in Florida near the beach?
This incident will go down as the height of folly in business management.
Students will be studying this one 40 years from now.
I say asked because Obama has no legal authority to force BP to pay. He asked, they said yes.
If you are going to go that route, Gerrib, you might want to consider that Obama does not have the legal authority to circumvent the justice system and plea bargin a deal in a civil matter.
if you want to argue that BP should only be on the hook for $75 million, so be it.
Perhaps the original law was bad. And if it is, it would seem, Gerrib, you are arguing that Obama has the legal authority to ignore the law and demand more payment. Since when does the President have the authority to rescind at will a law passed by Congress?
Leland – Obama is not circumventing anything. There is no “plea bargain.” Obama specifically said that people would still have the right to sue in Federal or State courts.
The Oil Spill Pollution Act (source of the $75 million cap) does not say that the oil company can’t volunteer or agree to pay more then $75 million. The law still stands.
In short, Obama did exactly what we want a President to do – hold BP to its word and expedite payments that BP promised.
Once that $20 billion gets into the hand of government, there’s nothing to prevent the money being siphoned off to do things like building bicycle paths in Oregon and other such “green” projects. Politicians have less financial discipline than a spoiled 13 year old girl with unlimited use of her daddy’s credit cards. Mark my words, a lot of that money isn’t going to actually go to the people most impacted by the oil leak.
larry j – perhaps that’s why Kenneth Fineburg, a man who’s spend decades developing a reputation for fairly allocating money, is going to actually allocate money. Kind of like he did for the 9/11 fund.
BP should be shorn of limited liability and the ensuing court cases over the next ten years will take care of paying for the damages and putting BP into bankruptcy. When you screw up this badly, the market knows how to deal with you. You die and the useful bits get re-used by someone who better knows how to use them.
Kenneth Fineburg, the pay czar. Oh and a staff too. A show trial in the House, Obama calling the CEO to the White House for his dressing down and then making his public apology after he stiffs the stockholders of the company he has a legal responsibility to protect. How you could say this ISN’T like Hugo Chavez requires the willing suspension of disbelief.
Gerrib, I’m having a problem with your concept of authority. First you say the President has no authority, then you claim he does, because he did nothing to violate the law. If he acted within the law, then apparently he has authority. Then you keep arguing about Fineburg, who managed a victims compensation fund, a fund that was established by the government through an act of Congress.
Fineburg was constrained by Congressional law as to what he could do with the money for 9/11.
Since Obama and BP made a deal outside Congressional and Judicial branches; BP is the entity establishing the escrow account. By your admission, Gerrib, BP is choosing to put in $20 billion to establish this escrow. But this escrow is an account of money not appropriated by Congress. If Congress hasn’t appropriated it, then the President can’t manage it or designate someone to manage it. He has no authority.
Now, BP can set up the escrow as sort of a NGO (non-governmental and non-BP), with BP and Obama agreeing that Fineburg is the person to run the escrow. But in that case, Fineburg can do whatever he wants with the money. He is not constrained by Congressional law, as he was for the 9/11 fund.
It’s even worse that just the $20B, unless you honestly don’t think these two articles are related in any way:
Link 1
Link 2
As outlined in Franz Oppenheimer’s THE STATE, the State was born out of plunder and rapine. That was it’s raison d’etre. Why would it change now?
“BP should be shorn of limited liability and the ensuing court cases over the next ten years will take care of paying for the damages and putting BP into bankruptcy.”
Yes, by all means change the rule of law retroactively to punish the evil doers. Because we all know that the ends justify the means. It’s not like predictability in the courts is good for business or anything.
“When you screw up this badly, the market knows how to deal with you.”
I don’t disagree with this sentiment in general, but I am wondering why more fingers aren’t pointing at BP’s silent partner in this disaster. You know, that partner who regulated and approved BP’s processes, who granted the oil lease, who forced them to operate in 5000 feet of water instead of 500 feet, and who turned down something like thirteen separate offers of assistance from international sources in the immediate aftermath of the spill. There’s a legal principle called contributory negligence; personally, I think the Fed’s should be on the hook for damages exceeding $75 million. That was the agreed on arrangement after all. As I understand it, the oil industry agreed to increased scrutiny and the Fed’s rules and regulations and in turn their liability would be limited. One of the reasons their liability is limited is because they have less control over their processes. The entity responsibile for those processes should shoulder some of the risk. But, who could have suspected that the politicals would stab them in the back the first time the law is put to the test?
Leland – you seem to think that the President can’t do anything unless specifically authorized by Congress. I disagree, and so does Thomas Jefferson (see, “Purchase, Louisiana”). But since the $20 billion fund specifically does not prohibit individuals from suing, it doesn’t have anything to do with the limits of the Oil Spill Recovery Act. It is an alternative to suing under the act, not a “plea agreement” of a lawsuit.
Regarding Fineburg – he’s contrained by whatever the details of the escrow agreement say. I haven’t read it, so I don’t know. I do know that Fineburg has spent decades developing a reputation as an honest broker, so unless he’s going to throw that reputation away, I trust the money will be allocated fairly.
txhsdad – the $2 billion from the Import-Export Bank was a loan for Brazil to buy American drilling equipment. It was approved months ago, and that financing American exports is exactly what the bank was created to do.
Steve A – taking your “pointing at BP’s silent partner in this disaster” comments apart, let’s look at them.
that partner who regulated and approved BP’s processes – so BP couldn’t have exeeded the regulatory requirements? This assumes that they actually met them in the first place – a bone of contention.
who granted the oil lease a grant contingent on BP having an oil-spill response plan – one that didn’t call for protecting the rare Gulf Coast walrus.
who forced them to operate in 5000 feet of water instead of 500 feet if BP didn’t like where the leases were available, they could drill elsewhere.
who turned down something like thirteen separate offers of assistance except the deal was that BP would have an oil spill response plan that they would run.
From SFGate:
“According to his fund’s latest filings with the SEC (as of March 31), Soros has been adding to his already large overweight positions in the oil & gas sector. His largest stock holding remains Brazilian oil giant Petrobras, which trades in the U.S. via an American Depositary Receipt (ADR) with the ticker symbol PBR. Petrobras is a vertically integrated oil company, participating in exploration, production, refining and retailing of crude oil and gas.”
The guy (Soros) is into PBR for $900M+. Everyone is saying they’re the company that stands to gain frmo this situation — the shredding of BP, the moratorium on the Gulf. But hey — nothing to see here folks, move along…
What exactly does Soros have to do with anything? Did he cause the spill? Did he mis-manage the response? Is Petrobras the only other oil company in the world?
This conspiracy theory is more than a few gallons short of a barrel.
Go ahead, Chris, and play dumb, like there’s no connections at all between Obama and Soros. If you really believe that, then I’d suggest YOUR the one who’s “a quart low”, friend.
txhsdad – I’ll ask again. Did Soros cause the spill? Did he mis-manage the response? Is Petrobras the only other oil company in the world?
Since you didn’t answer those questions, let me. The answer to all of them is “no.”
Soros may be the Devil incarnate, but he didn’t cause BP’s problems.
But his friend Obama isn’t exactly hurting his interests, is he? Foot-dragging the response, thrashing BP and the moratorium on Gulf drilling — I can point you to links from CNN, WSJ and others today who all say that it all directly helps out PBR (and Soros).
larry j – perhaps that’s why Kenneth Fineburg, a man who’s spend decades developing a reputation for fairly allocating money, is going to actually allocate money. Kind of like he did for the 9/11 fund.
The difference is that Obama and his cronies are in charge now. That makes all the difference.
Chris G,
one question. Would you be defending GWB if he’d done this.
And no rants, raves or deviations. Yes or No. If this had happened instead of Katrina, and BP gave him the $$$, would you be defending GWB? Same situation , same administrator, same amount of money.
There’re were very few people who opposed Ken fineberg as the special master for 9-11 and that worked out well.
The people generally trusted him, even if he was appointed by bush and a GOP congress.
So Obama just asked and they complied, just like that? I don’t think so. BP got something out of the deal (like maybe the Administration holding off on pulling the justice department trigger for a while) otherwise they’d have told the President to stuff it.
Leland – you seem to think that the President can’t do anything unless specifically authorized by Congress. I disagree, and so does Thomas Jefferson (see, “Purchase, Louisiana”).
Ok, Mr. History Degree, I looked up Louisiana Purcahse and saw the Treaty was ratified October 20, 1803. So yes, the President needs authorization from Congress.
However, this isn’t a treaty. Yet, I’m amazed for a person who likes to bring up the Commerce Clause, that such clause all of a sudden seems to no longer be within the domain of Congress.
Regarding Fineburg – he’s contrained by whatever the details of the escrow agreement say. I haven’t read it, so I don’t know.
You haven’t read it, because it hasn’t been passed. All you can see is a “fact sheet”, with facts being whatever Obama claims they are today (look for an expiration date).
Der Schtumpy – yes, of course. This is exactly what a President is supposed to do.
Leland – Jefferson agreed and paid before the treaty was signed. Regarding the Commerce Clause, the Executive can engage in commerce with private entities. Regarding your paranoia, I can’t deal with it.
Jefferson agreed and paid before the treaty was signed.
And it was believed unconstitutional. The fact that it was never reviewed by the Supreme Court doesn’t settle the question of authority. What settled the question of authority was the ratification of the treaty. I thought you learned history?
Regarding the Commerce Clause, the Executive can engage in commerce with private entities.
Sure, the Executive can cross the street and purchase ice cream for his kids at the nearby parlour. The matter here is the government regulation of commerce.
Regarding your
paranoiaability to provewhere I wrong, I can’t deal with it.
FIFY
I agreed with Barton, too. BP will probably be held liable, and rightly so, but right now the law limits its liability to $75 million. What ever happened to this being a system of laws and not of men? Did Obama just overrule that? What about not being deprived of property without due process? That doesn’t apply anymore?
I prefer to have damages proven rather than just estimated in advance and taken by intimidation. Suppose they don’t come to $20 billion. Will BP get any of it back?
It is obviously popular to stick it to Big Oil, but how much of the clean up should be apportioned to the government’s muddling and lack of preparedness.
To keep Gerrib from answering with false premises, I’ll take a shot, flataffect:
What ever happened to this being a system of laws and not of men?
BP can enter into any agreement their board allows. Based on the White House “fact sheet”, anyone else is welcome to enter into the agreement to become eligible to a claim to the $20 billion.
Did Obama just overrule that?
Obama doesn’t have any authority to overrule. He can however suggest BP offer this $20 billion escrow over and above its legal liability of $75 million. Why BP would be willing to do this is a matter of speculation.
What about not being deprived of property without due process?
BP can give up property if they so choose. That’s what the White House “fact sheet” suggests they are doing. Still no understanding as to why BP would act against its self-interest. Again speculation can suggest answers, such as guesses as to what is in their self-interest.
That doesn’t apply anymore?
It still applies, and the “fact sheet” suggests this is an agreement that entities can choose to enter into, and only by doing so, will they abdicate their right to other legal remedies. A third party, such as a gulf fishing company, might choose to go along with the agreement assuming a better chance of a larger payout from the $20 billion escrow versus the $75 million liability under existing law.
Suppose they don’t come to $20 billion. Will BP get any of it back?
The White House “fact sheet” says the $20 billion is neither a floor nor a ceiling. Therefore, it seems to suggests the possibility the costs may come in below $20 billion. No information as to whether BP then gets the money back or whether has authority to determine the best use of remaining funds. I’d bet on the latter.
Last sentence should be, whether Fineburg has authority.
Rep. Bart Stupak (D-Mich.): “I think we had to have someone say this is where you can go without limiting your criminal liability or civil liability.For instance, the question is brought up, pay for all of the health care for the people in the Gulf. No, but I think those who lost their job, then lost their health care would be legitimate.”
It would be difficult to imagine a massive transfer of funds from the private sector to the ever-greedy federales that Chris Gerrib wouldn’t support. He loves his Mommy State with a blind, unceasing, ever-faithful love that is, well, Oedipal.
Surely there exists something like a freezing order in US law?