Why the United States still can’t get BP to do what’s necessary

If Obama asserts no legal authority over BP, he can't cleanup the oil giant's cleanup

Topics: Gulf Oil Spill, Barack Obama, Environment

This post originally appeared at Robert Reich’s blog

Here’s what Coast Guard Rear Adm. James A. Watson wrote to BP’s chief operating officer on Friday:

“Recognizing the complexity of this challenge, every effort must be expended to speed up the process.” BP’s plans don’t “go far enough to mobilize redundant resources” in the event of an equipment failure or another problem. “BP must identify in the next 48 hours additional leak containment capacity that could be operationalized and expedited to avoid the continued discharge of oil.”

Translated: You’re dragging your heels and aren’t even using all the equipment you have, damn it. You better, or I’ll … I’ll … .

BP spokesman Jon Pack said the company received Watson’s letter and would respond to it as soon as possible.

Translated: Too bad. Have a nice weekend.

The Administration has not used legal authority to order BP to do a thing, because it hasn’t asserted any legal authority.

Meanwhile, the White House backed off its suggestion earlier in the week that it could stop BP from paying a giant dividend to its shareholders. That suggestion had caused BP shares to plummet and pressure to build on Britain’s new Prime Minister David Cameron. 12 percent of dividends paid to pensioners in the UK come from BP. Cameron and Obama had a friendly chat Saturday, assuring one another BP is important to both countries.

You see where all this is heading. At some point there’s likely to be a direct conflict. Like any big corporation, BP has legal duties to repay its creditors and to maximize the share prices of its stockholders. Its duties to the United States are still vague and unknown. The Oil Pollution Act of 1990 can be interpreted in various ways. So far, the Administration hasn’t tried.

Yet BP is still in control of what’s happening in Gulf to stop the worst environmental disaster in U.S. history.

BP still has lots of money. But the final cost of plugging the leak in the Gulf, containing the spill, cleaning up after it, and paying all damages – including lost wages to millions of workers whose jobs have been lost or will be if the spill keeps tourists away – could easily be tens of billions of dollars. And right now BP’s first responsibility is to its creditors and shareholders, not to the American public.



So if it’s UK pensioners versus American workers and property owners, who wins? More to the point, who’s going to decide? Most likely, a judge – or several judges, here and in the UK, through a mountain of litigation that will keep thousands of attorneys, solicitors, and barristers busy for decades.

In the meantime, months or even years could go by as Coast Guard admirals and rear admirals, as well as the White House, tells BP it needs to spend more to stop and clean up the mess it’s created, it’s going way too slow, and it’s not divulging what it knows. And BP shrugs and says it’s doing all it can.

I’ve got a better idea. Wouldn’t it be far simpler for the White House (stating that the Pollution Control Act of 1990 gives it authority) to put BP’s American operations into temporary receivership? That way, Obama can take over BP’s assets here and use its expertise to stop the leak and clean up the mess as soon as possible — and leave the subsequent years of bickering to the courts.

Extra bonus: It shows the public the President is really in charge.

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His new movie "Inequality for All" is in Theaters. His widely-read blog can be found at www.robertreich.org.

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