DNC responds to “shakedown” charge

by David Safier

Obama managed to get a $20 billion escrow account set aside by BP so that claims can be paid quickly without endless delays.

Republicans called it a Chicago style shakedown, a phrase that was repeated by Joe Barton (R-TX) at today's committee hearing.

The DNC response:

Reaction to Republicans apologizing to BP for $20 billion accountability escrow account

Amazingly, despite the devastation in the Gulf caused  by the recklessness of BP, Republicans across the board have excoriated the President for holding BP accountable to the families and small business of the Gulf by ensuring that they pay $20 billion to an accountability escrow fund.   This morning, Republican Congressman Joe Barton, the ranking member of the Energy and Commerce Committee, took the astonishing step of APOLOGIZING TO BP and BP CEO TONY HAYWARD.  Please see below for reaction from DNC National Press Secretary Hari Sevugan:

“While the President has worked to ensure that BP is held fully accountable to the families and small businesses of the Gulf, Republicans and Joe Barton are proving that they are only accountable to BP and the oil industry.  While the President has secured a guarantee of at least $20 billion for Gulf Coast residents, Republicans and Joe Barton have lined their pockets with BP contributions.   While the President has gotten BP to rightfully apologize to the American people for their reckless behavior, their inexcusable response and their insulting approach, Republicans are apologizing to BP.  Republicans could not have this more backward, and it raises serious questions as to why they are on the side of BP and the oil companies instead of that of the American people.  The only people Republicans and Joe Barton should be apologizing to are the people of the Gulf who they’ve turned their backs on to defend BP.”

 Joe Barton (R-TX):

“I'm ashamed of what happened in the White House yesterday.  I think it is a tragedy in 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 — with the attorney general of the United States, who is legitimately conducting a criminal investigation and has every right to do so to protect the American people, participating in what amounts to a $20 billion slush fund that's unprecedented in our nation's history, which has no legal standing, which I think sets a terrible precedent for our nation's future.

"I'm only speaking for myself. I'm not speaking for anyone else, but I apologize," Barton added. "I do not want to live in a county where anytime a citizen or a corporation does something that is legitimately wrong, [it is] subject to some sort of political pressure that, again, in my words, amounts to a shakedown."

0 responses to “DNC responds to “shakedown” charge

  1. David Safier

    So tell me, Ben, is it legitimate to say it was a “shakedown” by Obama, having BP put $20 billion in escrow?

    And throwing around the “F” word, Ben? That’s not your usual commenting style.

  2. That didn’t take long for you to resort to Godwin’s law.

    Ben, I agree with you that under the Oil Pollution Act of 1990, BP is liable up to $75 million for cleanup of the oil spill. However, “the cap is not in place if somebody is found to be either grossly negligent… involved in willful misconduct, or in violation of federal regulations,” according to press reports.

    The bill in Congress to raise the liability cap to $10 billion retroactively appears to me to be an ex post facto law in violation of Article 1, Section 9 of the Constitution which states explicitly: “No bill of attainder or ex post facto Law shall be passed.” However, the U.S. Supreme Court on rare ocassions has allowed ex post facto laws to withstand scrutiny.

    For example, another law under which BP is liable is the 30-year-old Superfund law, which retroactively imposed liabilities on companies to clean up hazardous waste sites. The Superfund law imposes liability on anyone in the “chain of custody” from cradle to grave: the manufacturer, transportation, storage, and landowner (including innocent landowners without notice of the hazardous waste). Some of the Superfund sites were in existence decades before enactment of the Superfund law.

    I disagree with your mischaracterization of the $20B victim claims fund to which BP voluntarily agreed. BP has stated from day one that it will pay the full cost of cleanup and “legitimate” economic losses by residents of the Gulf Coast, as it is legally liable to do under U.S. laws. It is smart business practice for a corporation to set up a victims claims fund for payment of claims up front in this situation. This may substantially reduce the amount of individual claims paid under the theory of “pay me now, or pay me later.”

    BP was under no duress or government compulsion to agree to the $20B claims fund as you imply. BP could have said no, but having publicly stated it would pay for the full cost of cleanup and “legitimate” economic losses, BP would have faced an even larger PR nightmare for appearing to renege on its promise. The only pressure on BP from the White House was that the claims fund be administered independently from BP (similar to the 9/11 victims claims fund). Kenneth Feinberg, who ran that fund has been asked to administer the BP victims claims fund.

    One does not have to be sued, spend years in court, be found liable and exhaust all appeals before agreeing to pay legitimate claims for damages (as Exxon-Mobil did). Claims are settled all the time without resort to protracted litigation, which only adds to the expense.

    Escrow accounts with independent third-parties administering funds are occasionally used to expedite settlements. I have done this in my own practice. There is nothing unusual or untowards or unlawful about this escrow account victims claims fund as Republicans have insinuated. It is not a “criminal” shakedown as Rep. Barton so readily defamed the president.

    What Barton is really upset about is that BP agreed to suspend payment of $8B in dividends for the rest of 2010 to partially fund the victims claims fund. Barton is one of the largest recipients of campaign contributions from the oil and gas industry. This is an election year.

    Your mischaracterization that this mutual agreement is a denial of due process and of BP’s day in court could not be further from the truth. It is the beginning of a claims settlement process. That’s damn good lawyering in my opinion.

  3. It’s rather amazing how many so-called “liberals” quickly regress to fascist tendency when their man is in the White House.

  4. “Ah, the oldest dirty trick in the book.”

    Next time someone alleges that you harmed him, let me remember that that’s your view, and let’s apply that view of “due process” to you. No trial for you. No standard American standards of evidence and no right to defend yourself. A bureaucrat decides how much you owe and you pay up.

    Justice is not a “dirty trick”. And “decades” is an exaggeration. Even the Pliofilm cases didn’t take “decades”.

  5. Ah, the oldest dirty trick in the book. Throw a few hundred lawyers at the victims, and drag out the process for decades in the hopes that the victims will have exhausted all of their resources, or die in the interim.

    Not this time, I think. Joe Barton should be tarred and feathered for his betrayal of the American people.

  6. The President’s commitment to rule of law and the republican form of government is seriously in question. It’s to Congress to lift liability caps and decide whether or not to make them retroactive, and to the courts to decide who must pay damages to whom. Obama’s words and perhaps his approach verges on the dictatorial.