Tom Friedman wants me to take the fall for BP. I’m not going to do it.

Tom Friedman wants me to take the fall for BP. I’m not going to do it. - Printable Version

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Tom Friedman wants me to take the fall for BP. I’m not going to do it. - Magda Hassan - 16-06-2010

Tom Friedman wants me to take the fall for BP. I’m not going to do it.

Thomas Friedman has a buddy who works in the pentagon and wants to take the blame for the BP oil crisis. The guy, Mark Mykleby, wrote a letter to the editor of the Beaufort Gazette in South Carolina, saying “I’d like to join in on the blame game that has come to define our national approach to the ongoing environmental disaster in the Gulf of Mexico. This isn’t BP’s or Transocean’s fault. It’s not the government’s fault. It’s my fault. I’m the one to blame and I’m sorry. It’s my fault because I haven’t digested the world’s in-your-face hints that maybe I ought to think about the future and change the unsustainable way I live my life. ”
Mark has reluctantly come to the conclusion that we use too much oil and that’s why the Gulf is in such a mess. His solution is to ride bikes to work and plant gardens and. . .something something something.
Tom Friedman thinks his buddy Mark is on to something, as he tells us in his NYT piece: “I think Mykleby’s letter gets at something very important: We cannot fix what ails America unless we look honestly at our own roles in creating our own problems. We — both parties — created an awful set of incentives that encouraged our best students to go to Wall Street to create crazy financial instruments instead of to Silicon Valley to create new products that improve people’s lives. We — both parties — created massive tax incentives and cheap money to make home mortgages available to people who really didn’t have the means to sustain them. And we — both parties — sent BP out in the gulf to get us as much oil as possible at the cheapest price. (Of course, we expected them to take care, but when you’re drilling for oil beneath 5,000 feet of water, stuff happens.)”
What’s this “we” business? I didn’t do any of those things. (And neither did any of the people I know who just plod along and do their jobs and worry about keeping a roof over their heads.)
I’m getting ready in a few minutes to go hang a load of dark clothes on the clothesline. Tomorrow I’ll wash whites and lights and hang them out if the sun is shining. If it isn’t, I’ll wait to wash until the next day. I have a dryer but the wind and the sun do the job in a much more satisfying way.
Nearly every light socket in our house is fitted with CFL bulbs. The ones that can’t take them are on dimmers.
We drive a car that gets at least 33 MPG in the country, which is where we live. It’s our only car.
We burn wood in our high-efficiency stove as much as we can so as not to have to use our propane glutton of a furnace. We close off half of our house in winter and leave it unheated.
We recycle and compost and wash out our zip-lock bags and use them over again.
When we use paper plates, they’re paper and not plastic.
I watch “Living with Ed” and find lots to think about when I’m not ROTFL. (Love that guy!)
I’m still not good at remembering to take my own grocery sacks in to the store, but that doesn’t mean I’m letting BP off the hook. Uh uh.
I’m not the paragon of virtue when it comes to living Green, but I’m to blame for the BP oil mess like a sweat drop in a river is to blame for downstream flooding. As I write this, the Census Bureau clock says the US population is 309,500,735. If all 310 million of us dripped sweat into the river, we wouldn’t raise that river one inch. Yet you KNOW if we stand there long enough, it’s gonna be our fault that somebody upstream messed up and caused the dam to break.
My kids didn’t go to school to learn how to cheat people, as Friedman suggests. What college teaches that? (They didn’t go to Wall Street or K Street or Easy Street, either. That gladdens my heart no end.)
And what kind of mindset thinks building a workforce in Silicon Valley might have been the answer to our collosal, unending unemployment problems? We need to build goods from start to finish in the US, not assemble electronic gadgets with Chinese components.
Okay, people stupidly bought houses they couldn’t afford, but somebody else aided and abetted. They didn’t hold guns to those bankers’ heads in order to get their loans.
And nobody but BP made the decision to deep-drill without giving a thought to safety and repairs. No hoi polloi were involved in the decision to look the other way while British Petroleum went about their dirty business unimpeded.
Now that the inevitable oil crisis is upon us, every pol and pundit has a solution. More regulation. Less regulation. A definite reduction of our dependence on foreign oil, and more oil production in the U.S. Wind, sun and water as alternatives. Forget wind, sun and water and go with nuclear.
Here’s my humble contribution to the discussion: Bring back the trains, you idiots! Tell the truck lobbies and car manufacturers to shove it. One train engine dragging even a paltry dozen cars takes 12 or more gas-guzzling trucks off the roads. With passenger trains, it’s a multitude of automobiles off the highways. Was I the only one horrified when our government stopped subsidizing the railroads and let them die a slow death? Couldn’t everyone see where that was going to lead? More trucks, more cars, more roads, more road repairs, more dependence on oil, more and more pollution and the associated illnesses.
In time, as the railroads declined and air freight proved to be too expensive, freeways sliced through cities and divided neighborhoods. They created traffic jams and brought us unprecedented air and noise pollution. Trucks are now the bullies of the road and whatever the trucking lobbyists want the lobbyists get.
A local example: Here in Michigan our Mackinac Bridge is a toll bridge. A few years ago it was running in the red, succumbing to constant repairs, since Michigan has the highest weight limit on trucks in the nation(164,000 pounds on 11 axels–more than double most states’ limits). So someone suggested raising the tolls on trucks. Boy, howdy, what a stink! They threated a boycott of the entire Upper Peninsula, the eastern portion of which can only be reached by that bridge. We’re poor here–and needy. That’s all it took. They raised the rates on cars, instead, and now we’re paying $3.50 one way instead of the $2.00 we paid just a few years ago. And repair crews and lane closings have become permanent fixtures on our beautiful bridge, thanks to overloaded trucks.

Our beautiful Mackinac Bridge, complete with resident maintenance equipment.
Michigan’s roads are the worst in the nation, thanks to those behemoth trucks traveling our byways and an auto industry abhorrance of rapid transit. The state’s idea of a solution? Raise gas taxes to pay for road repairs. Someone even said out loud that we need the trucks since we don’t have a good rail system in Michigan. So. . .one-two-three, all together now: That’s because you morons tore up the tracks and scrapped the trains! You had it once.
When they pulled up the rails–the rails that once took us and our goods speedily, efficiently, to where we needed to go–and turned the rail beds into hiking trails, I finally gave up all hope and went into the mourning phase. Railroads, our beloved national identity, became nothing more than sources of scrap metal. Every now and then we hear squeakings about a return to trains, but really–how likely is that when they would literally have to start building the system from scratch? (And, adding insult to injury, buying the steel from China, since we don’t produce enough of it anymore to rebuild anything of any consequence.)
So, back to taking the blame for BP and that now-permanent disaster in the Gulf of Mexico. I won’t do it. We do love our selfish indulgences in this country, and we most surely have to learn to curb our impulses and look at the impact on life beyond tomorrow, but to even mention them in the same breath as BP in order to dilute that vile corporation’s crass and criminal actions . . . I’d just like to slap you silly, Friedman and friend. Get ahold of yourselves. We don’t have time for this.
Ramona
(Cross-posted at Ramona’s Voices here.)

Tom Friedman wants me to take the fall for BP. I’m not going to do it. - Austin Kelley - 16-06-2010

Closing BP's Escape Routes

By Robert Weissman
June 15, 2010

BP generates enough cash to absorb its liabilities from the oil gusher
in the Gulf of Mexico.

But that doesn't mean it will.

One of the benefits of the corporate form is that it gives giant
corporations the ability to escape liability. BP may or may not choose
to capitalize on such escapes, but it would be foolish to presume that
it won't. That's why President Obama's call for the company to establish
a $20 billion escrow account is such a positive and needed -- if still
inadequate -- step.

Consider first the liabilities that BP may face. No one really knows
what the damage from the oil gusher or the overall costs to BP may
ultimately be. Some analysts are now throwing around numbers of $70
billion on the upper end -- but it's not hard to see how the ultimate
cost to BP could rise even higher.

The company faces civil fines of up to $3,000 per barrel of oil
polluting the ocean. If the gusher lasts for four months at 40,000
barrels a day, the fine alone could hit $14 billion. If it is found that
the actual oil flow is double that level, the fine could potentially
approach $30 billion -- more, if the gusher lasts for more than four
months.

Beyond the payments the company is making, it is going to face massive
lawsuits, with damages surely in the billions and quite possibly in the
tens of billions. On top of that, it may face a massive punitive damage
award. Exxon challenged a punitive damages award of $10 billion in the
Valdez case, and succeeded through appeals in dragging out payment for
20 years and lowering the amount to $500 million. But that was $500
million on top of compensatory damages of $500 million.

On top of all this, BP's brand -- just a couple months ago, the most
valued among oil companies -- is now ruined.

Still, as hard as it is to conceptualize, BP can afford to pay $70
billion. The company made $14 billion in profits in 2009, a bad year.
Before the Gulf disaster, it was on track to make much more in 2010.

BP may be able to pay $70 billion, but it surely doesn't want to. Even
as the company pledges again and again to cover all "legitimate" claims,
you can be sure that its attorneys are conjuring a variety of maneuvers
to avoid paying. Here are five approaches they must be considering:

1. The AH Robins/Dalkon Shield Bankruptcy Scam

A.H. Robins, the manufacturer of the defective Dalkon Shield
intrauterine device, filed for Chapter 11 bankruptcy in 1985. Women who
were victims of the dangerous device received less compensation than
they otherwise would have. Meanwhile, with the company's otherwise
open-ended liability demarcated in the bankruptcy process, Robins' value
shot up. AHP (now part of Wyeth, itself now part of Pfizer) acquired the
company at a premium, with the Robins family making off with hundreds of
millions of dollars.

BP wouldn't follow the Robins' model exactly. The play for BP would not
be to declare bankruptcy for the parent company, but for BP America or
another subsidiary that could be tagged with the liability for the Gulf
of Mexico gusher.

In advance of such a move, BP might try to move assets out of the
designated subsidiary and into other subsidiaries in its vast network.
Such asset shifting is not permissible, and creditors would challenge
any such moves, if they could discover them. But using its labyrinthian
structure, BP might hope to evade the creditors.

Even without the asset shifting effort, bankruptcy for an affiliate
could prove attractive for BP.

2. The Union Carbide Disappearance

Union Carbide was the company responsible for the world's worst
industrial disaster. A gas escape from its chemical facility in Bhopal,
India killed many thousands (likely tens of thousands) and severely
injured tens of thousands more. After settling for a paltry amount with
the Indian government, Union Carbide disappeared as a standalone
company. It is now a subsidiary of Dow Chemical.

Says Dow: "Dow has no responsibility for Bhopal." Moreover, "the former
Bhopal plant was owned and operated by Union Carbide India, Ltd. (UCIL),
an Indian company, with shared ownership by Union Carbide Corporation,
the Indian government, and private investors. Union Carbide sold its
shares in UCIL in 1994, and UCIL was renamed Eveready Industries India,
Ltd., which remains a significant Indian company today."

BP might conceivably be acquired by another oil major. Or, more likely,
it might just sell some or all of its U.S. subsidiaries. If the
liability cap in the Oil Pollution Act works to protect BP from legally
recoverable claims (perhaps less likely than has been reported, since
the cap does not apply to a spill caused by violation of applicable
federal rules), an acquiring company could simply state that it refuses
to make good on the liabilities that BP now says it will voluntarily
accept. A new company would also benefit from operating BP assets with a
new, uninjured brand name.

3. The Shell Company Game

A variant on the Union Carbide Disappearance gambit would involve
selling one or more subsidiaries' assets, but leaving the current
corporate structure in place. Liability would still attach to the old
subsidiaries, but it would be devoid of assets to pay -- if BP could
find a way to move the cash it received for selling assets out of the
subsidiary and out of reach of creditors.

Again, such a move should not be legal. But it would be a mistake to
assume that formal legal rules provide guarantees when billions or tens
of billions of dollars are at stake for a giant, global multinational.

4. The Exxon Hardball Approach

BP's lawyers are undoubtedly considering other, more straightforward
approaches to limit the company's liability.

Under the Exxon Hardball approach, BP would follow its oil company
brethren's approach to the Valdez spill. Drag out compensation payments.
Challenge adverse legal rulings. Rely on a corporate-friendly judiciary
to overturn or scale back any large scale jury verdicts or
government-proposed fines.

5. The Big Tobacco Global Deal

Another approach might be for BP to offer a "global settlement" of all
claims arising from the Gulf Oil gusher. This would follow the precedent
of Big Tobacco, which in 1997 offered to put hundreds of billions of
dollars on the table, and accept some regulatory restraints, to settle
lawsuits for its past misconduct and effectively preclude new
litigation. (This deal was ultimately scuttled.) For BP, the play would
be to put a "shock and awe" amount of money on the table to resolve all
claims and penalties. Its aim would be to eliminate the prospect of
getting hit with outsized punitive damages or fines, and escaping
payment for ecological damage that may not be apparent for many years
--amounts that might vastly exceed what BP pays.

Against this panoply of available maneuvers, public officials have
limited options. The Obama administration is finally doing the right
thing in first, talking about the danger of BP draining company assets
via dividend payments, and, second, demanding the establishment of an
escrow fund. Calling attention to abusive corporate stratagems not yet
underway is one of the best ways to prevent their deployment. And an
escrow fund would establish a guaranteed pool of available money for
victims -- establishing the fund apart from BP's control is at least as
important as ensuring fair and independent handling of victims' claims.

What this and future administrations also need is a way to exert
control over companies facing environmental or other liabilities of the
scale now facing BP -- a kind of receivership to prevent manipulations
of the corporate form to enable corporate goliaths to escape liability.

Forcing corporations to pay for the damage they cause is not sufficient
to prevent them from recklessly endangering people and the planet, but
it is certainly necessary. Permitting them to avoid liability and foist
costs on to others is to ensure more and worse corporate catastrophes.

Robert Weissman is president of Public Citizen, <www.citizen.org>,
which is calling for a BP Boycott <www.beyondbp.org>.

This article is posted at:
<http://lists.essential.org/pipermail/corp-focus/2010/000336.html>.

Tom Friedman wants me to take the fall for BP. I’m not going to do it. - Jan Klimkowski - 16-06-2010

Austin - good article, thanks for posting.

I had separately been thinking about the Dalkon Shield and Bhopal precedents where the core guilty corporation escaped with minimal financial damage.

BP's share price should potentially reach zero or near enough. However, this will not mean the end of its underlying power nexus.

BP's core power nexus, its deep political structure, will find a way of preserving its wealth and power, through a series of technical corporate moves probably based on the scenarios of AH Robins and Union Carbide.

In those cases, an empty shell was offered up whilst the monster metamorphosed into its new form.

But ordinary shareholders - crucially pension funds - will be screwed.

And the Gulf will at best be a laboratory for cutting edge techniques to restore oil and dispersant contamined shores, breeding grounds and wetlands.

At worst, a dead zone will stretch from Mexico to Cuba.

Tom Friedman wants me to take the fall for BP. I’m not going to do it. - Magda Hassan - 16-06-2010

Quote:At worst, a dead zone will stretch from Mexico to Cuba.

That's an upside for some people.

Tom Friedman wants me to take the fall for BP. I’m not going to do it. - Jack White - 17-06-2010

http://hubpages.com/hub/British-Petroleum-Ownership-Who-Owns-BP

Tom Friedman wants me to take the fall for BP. I’m not going to do it. - Ed Jewett - 17-06-2010

Good stuff, people. That's why I like to hang out here.