Why the US hasn't made BP do what鈥檚 necessary
Here鈥檚 what Coast Guard Rear Adm. James A. Watson wrote to BP鈥檚 chief operating officer on Friday:
鈥淩ecognizing the complexity of this challenge, every effort must be expended to speed up the process.鈥� BP鈥檚 plans don鈥檛 鈥済o far enough to mobilize redundant resources鈥� in the event of an equipment failure or another problem. 鈥淏P must identify in the next 48 hours additional leak containment capacity that could be operationalized and expedited to avoid the continued discharge of oil.鈥�
Translated: You鈥檙e dragging your heels and aren鈥檛 even using all the equipment you have, damn it. You better, or I鈥檒l 鈥� I鈥檒l 鈥� .
BP spokesman Jon Pack said the company received Watson鈥檚 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鈥檛 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鈥檚 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鈥檚 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鈥檛 tried.
Yet BP is still in control of what鈥檚 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 鈥� including lost wages to millions of workers whose jobs have been lost or will be if the spill keeps tourists away 鈥� could easily be tens of billions of dollars. And right now BP鈥檚 first responsibility is to its creditors and shareholders, not to the American public.
So if it鈥檚 UK pensioners versus American workers and property owners, who wins? More to the point, who鈥檚 going to decide? Most likely, a judge 鈥� 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鈥檚 created, it鈥檚 going way too slow, and it鈥檚 not divulging what it knows. And BP shrugs and says it鈥檚 doing all it can.
I鈥檝e got a better idea. Wouldn鈥檛 it be far simpler for the White House (stating that the Pollution Control Act of 1990 gives it authority) to put BP鈥檚 American operations into temporary receivership? That way, Obama can take over BP鈥檚 assets here and use its expertise to stop the leak and clean up the mess as soon as possible 鈥� and leave the subsequent years of bickering to the courts.
Extra bonus: It shows the public the President is really in charge.
------------------------------
海角大神 has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on .
