There are few occasions in politics which entertain and engage the punditry and opposition party opponents as much as seeing a powerful elected official really shove his foot in his mouth. Such an opportunity seemed to present itself this week when Joe Barton (R-Texas) referred to President Obama’s demand for BP to pony up $20 billion for a fund to compensate those affected by the recent oil spill in the Gulf of Mexico in rather sinister terms:
“I’m ashamed of what happened in the White House yesterday,” Barton said in his opening statement. “I think it is a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown — in this case a $20 billion shakedown.”
To put the remarks in baseball parlance, this one couldn’t have been any better. It was the low, hanging soft pitch over the outside corner just waiting for the president and his Democrat allies to knock it clean out of the park.
It had all of the perfect elements wrapped up in one delicious package. The evil, money-grubbing, richer-than-Midas oil giant is casually dumping millions of barrels of crude into the pristine waters of the Gulf. Tens of thousands of working-class voters are having their health and livelihoods endangered. We’ve even got the iconic, oil-soaked pelican pictures running 24/7 on MSNBC.
And now that the Ass Kicker in Chief has gotten the petroleum tyrants to pony up a pile of cash for the “small people,” there’s a Republican apologizing for it?
The fact that the speaker happened to be a somewhat portly Caucasian over the age of fifty didn’t help matters either. David Letterman quipped, “Nice to see you rich white guys sticking up for each other.”
But while the remarks could certainly qualify for some sort of MTV Music award for inept commentary, and Barton has already been forced into a mea culpa, one nagging problem remains. The Texas congressman’s statements were politically tone deaf … but he was also correct.
It is not unheard of for a company to set aside funds for a third party to distribute to affected workers and consumers after bankruptcy or other corporate meltdown scenarios. In years past I’ve worked on the documentation and public relations for firms that have done just that. But the key difference is that it was generally a face-saving maneuver designed by the failing company in question, not a pound of flesh demanded by an elected official.
I take some comfort in the fact that I wasn’t the only person to note this discrepancy. John Hawkins quickly raised an eyebrow when the president said, “Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness.”
John’s response fairly well mirrored my own:
“What is this, Cuba? Venezuela? I thought we had laws in this country? Since when does the president of the United States arbitrarily get to decide how much money a privately owned company has to give the government and then tell it there is no choice other than to do it? What happens if BP wouldn’t go along? Would the CEO have woken up with a horse’s head in his bed? Would Obama have seized his company, Hugo Chavez style?”
We do, in fact, have laws in this country which cover precisely this type of scenario. Plaintiffs in large scale disputes such as this have a right to petition in court and have a third party arbitrate disputes, collect funds, and disperse them to the injured parties. But in each case one of two things happens; either the company does it voluntarily to improve their public image or a court directs them to take this action. There is no provision for an elected official from the executive branch to simply order such an action by fiat.
True, BP may have been under no legal constraint to follow Obama’s dictate. But given the fact that their popularity around the world right now isn’t exactly at an all time high, the president pretty much had them over a barrel of oil. And it does, as Hawkins opined, carry the stench of being “lawless, creepy, and dictatorial.”
Another point being missed is the question of precisely how efficacious this remedy may prove. I still recall one case I worked on in New Jersey during the 1980s where a government contracting firm was filing for bankruptcy and facing a barrage of claims from workers who had not been paid wages due and suppliers with bounced checks in hand. The matter had been turned over to a court-ordered arbiter and the company’s CFO remarked to me, “Do you know who wins when a company is thrown into battle against a bunch of workers and clients? The lawyers.”
In that case the arbitration dragged on for more than five years, with over 40% of the company’s remaining assets winding up going to the attorneys from the three sides of the fight. (I say three because the arbitrating entity and their lawyers suddenly have a seat at the table and they want to be first in line to be paid just like anyone else.) In the case of BP’s bankroll, who will cover the cost of operating the compensation pool? The money will either have to come from the original funds intended for the plaintiffs or the government will foot the bill with — you guessed it — your tax dollars.
This makes me wonder precisely how wise this course of action by the Obama administration may be. BP is surely operating on the assumption that they aren’t going anywhere. This boondoggle will prove hideously expensive, no doubt, but they plan on being around for the long term. Their public image is important to them — so much so that they are already dumping millions into an advertising campaign designed to shore up support around the globe.
It’s not all that unlikely that they would be quick to pay out claims to nearly anyone at this point. If a blind, 84-year-old grandmother with a leaky rowboat showed up next month claiming that the spill may have prevented her from taking up shrimping next month as a retirement career, BP might very well fork over the requested cash. In the long run it would probably be less expensive than having the octogenarian show up on CNN the following week telling a tale of woe about how the oil magnates had shattered her dreams.
It would be a shame if the Gulf Coast denizens who rely on fishing and tourism for a living actually wind up waiting longer and receiving less because of President Obama’s desperate need to appear as if he’s doing something — anything! — in the face of this Deepwater Disaster film which simply refuses to go away. And even if the slush fund works perfectly and everyone is paid in a timely fashion, the day may yet come when savvy legal minds will find time to ask the president exactly where he found the constitutional authority to demand such a solution from a private company without the benefit of a court.
So just how crazy was Joe Barton? He may have placed his future position as senior majority figure on energy policy in danger with his poorly crafted remarks. But he may also turn out to be the boy who pointed out that the emperor was strolling around buck naked.