Business/Finance

Drive-by: That apology to BP

You know, that apology…

“I’m speaking totally for myself, I’m not speaking for the Republican party … but I’m ashamed of what happened in the White House yesterday,” Barton said.

He called it “a tragedy of the first proportion, that a private corporation can be subjected to what I would characterize as a shakedown, a $20 billion shakedown.”

Barton’s point was that BP should pay for damage claims but should be allowed to follow the “due process and fairness” of the American legal system.

I’m certainly not qualified to comment on whether the US president has the right to force BP to cough up $20 billion.  Barton claims not. Note, he isn’t saying that BP isn’t responsible or liable for costs, merely that the US president doesn’t have the right to demand BP set up an escrow account.

However, I do find the whole thing a bit odd.  Noted, the terms of this escrow account haven’t been declared.  Most legal escrow accounts exist to prove that you have the necessary funds to cover any court-awarded penalties, legal debts, or even investment risks (such as spread bets).

If the escrow is used to draw down on very clear damages and any balance at the end of the process (however, long, say 20 years) is returned to BP, then that would probably count as legal and “fair.”  If, on the other hand, one finds that claimants as far afield as Idaho corn farmers were being paid out, then one could justifiably declare this to be a pure pork-barrel shakedown.

Plus, it will turn out to be very difficult to dish the money out if it is done responsibly.

4 replies »

  1. I can’t imagine that anyone in America would resort to pork-barrel shakedowns.

    Aherm.

    Yes, there are logistical issues, aren’t there? For me, I don’t much care whether BP sets up an escrow or pays out in class-action awards or drives around the Gulf in a 1977 Lincoln with a trunk full of cash. I just want a fair outcome for the victims.

    The real issue for me, though, is that moments like this illustrate, in obscene detail, just how thoroughly our Congress is owned by various corporations.

  2. “I’m certainly not qualified to comment on whether the US president has the right to force BP to cough up $20 billion. ”

    Legal authority? No. Moral authority? Apparently, because BP agreed to it.

Leave us a reply. All replies are moderated according to our Comment Policy (see "About S&R")

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s