Why Obama Should Put BP Under Temporary Receivership
Monday, May 31, 2010
It’s time for the federal government to put BP under temporary receivership, which gives the government authority to take over BP’s operations in the Gulf of Mexico until the gusher is stopped. This is the only way the public know what’s going on, be confident enough resources are being put to stopping the gusher, ensure BP’s strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the President is ultimately in charge.
If the government can take over giant global insurer AIG and the auto giant General Motors and replace their CEOs, in order to keep them financially solvent, it should be able to put BP’s north American operations into temporary receivership in order to stop one of the worst environmental disasters in U.S. history.
The Obama administration keeps saying BP is in charge because BP has the equipment and expertise necessary to do what’s necessary. But under temporary receivership, BP would continue to have the equipment and expertise. The only difference: the firm would unambiguously be working in the public’s interest. As it is now, BP continues to be responsible primarily to its shareholders, not to the American public. As a result, the public continues to worry that a private for-profit corporation is responsible for stopping a public tragedy.
Five reasons for taking such action:
1. We are not getting the truth from BP. BP has continuously and dramatically understated size of gusher. In the last few days, BP chief Tony Hayward has tried to refute reports from scientists that vast amounts of oil from the spill are spreading underwater. Hayward says BP’s sampling shows “no evidence” oil is massing and spreading underwater across the Gulf. Yet scientists from the University of South Florida, University of Georgia, University of Southern Mississippi and other institutions say they’ve detected vast amounts of underwater oil, including an area roughly 50 miles from the spill site and as deep as 400 feet. Government must be clearly in charge of getting all the facts, not waiting for what BP decides to disclose and when.
<SNIP>
http://robertreich.org/