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Anorak News | Obama Moves To Take Over BP’s Goodwill Funds

Obama Moves To Take Over BP’s Goodwill Funds

by | 14th, June 2010

BP is being taken over by Barack Obama. Well, not all of it – just the bits that do good works and reflect well on…Obama:

White House officials on Sunday said they wanted BP to put “substantial” funds into an escrow account to cover claims by Gulf Coast businesses and residents affected by the spill.

President Barack Obama plans to bring up the idea at a White House meeting Wednesday with top BP executives, including Chairman Carl-Henric Svanberg.

The call was echoed by congressional leaders and state officials. In a June 10 letter to BP released on Sunday, Senate Majority Leader Harry Reid (D., Nev.) and other Democrats asked BP to establish a $20 billion account, administered by an independent trustee, that would be used to pay the damages and clean-up costs associated with the spill. Florida Governor Charlie Crist and other officials in the Gulf Coast region joined the chorus.

It remained unclear how any such funds would be supervised, in particular who would oversee the compensation decisions. Administration officials on Sunday didn’t comment on the size of the escrow account they will seek, or on where money might come from. Nor did officials detail the legal status of the proposal.

Such a fund would provide a measure of security, proponents argue, for people concerned BP might file for bankruptcy protection or otherwise stop paying claims at some point in the future. It also has the potential to give the government or its designees control of distributing a significant pool of relief money.

Oh, thanks Barack Obama. Cheers for the cash you are redistrubuting. Not your cash – BP’s. And you will do a better job of getting value for money than a big company.

On a slightly different note, anyone think that politicians will allocate the money better than the company?

Over the weekend, U.S. officials told BP to devise a more effective plan for containing the oil that has been gushing from its deepwater well since April 20. They also demanded the company put more ships and other resources in the Gulf in case of additional equipment failures.

Tim Worstall observes:

Lying toads again. There are any number of ships and vessels that BP could bring into hte gulf. Norwegian and the like vessels, equipped, kitted out and ready to try and contain oil spills.

But BP isn’t allowed to bring them in under US law. The Jones Act says that only US registered v3essels, with US union crews, can operate in those waters. It’s possible for Obama to waive the Jones Act (as Bush did over Katrina) but Obama hasn’t seen fit to do so as yet.

Couldn’t be anything to do with the unions being a key Democratic constituency, could it?

Such a fund would provide a measure of security, proponents argue, for people concerned BP might file for bankruptcy protection or otherwise stop paying claims at some point in the future.

And demanding $20 billion now rather than $20 billion over the next couple of years doesn’t increase the possibility of bankruptcy then?

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Posted: 14th, June 2010 | In: Money Comments (12) | TrackBack | Permalink