The Obama administration has just announced a major shift in its handling of BP and the disaster in the Gulf of Mexico.
For six weeks the Obama administration just said NO to the growing nationwide chorus of public opinion demanding that the government seize BP’s assets in an amount commensurate with the damage caused by their criminal negligence, and that the funds be placed into a trust that could quickly and easily pay for damages and compensation now and into the future as more damages accrue.
Directly on the heels of Seize BP's demonstrations taking place in more than 50 cities -- with more demonstrations occurring every day -- officials from the administration are now announcing a "new" approach to BP: President Obama has given BP an ultimatum to create an escrow fund administered by an independent body for the payment of claims and damages or the White House will invoke its legal authority to create such an escrow account from BP’s assets. He plans to address the country in a nationwide television address Tuesday night and meet with BP executives at the White House on Wednesday.
But what is the reality undergirding the Obama administration's announcement? It may appear that the administration is now close to the demand of seizure of assets for an escrow account unless BP commits to the establishment of such an escrow account on its own accord. There are several key factors:
1.
The administration's 55 days of coddling BP has become unsustainable from a political and public relations standpoint. The government has revealed itself as a subservient appendage to corporate interests. Now they are going out of their way to present a different image.
2.
In recent days, Florida and Louisiana have both made demands on BP that funds be escrowed as a down payment to cover initial damages, totaling $7.5 billion. BP says that it only has $6.8 billion in cash and cash equivalents available. BP itself is reassuring its investors that the damages in the Gulf that BP will have to pay will not exceed $3 billion to $6 billion. It needs to be understood that it is not a lowball estimate of the scope of the damage but a statement of intent, of just how little BP intends to pay. BP is reported to have called its large U.S. stockholders -- J.P. Morgan Chase controls deposits and services for 30 percent of BP's U.S. stock -- to pressure the administration. The administration’s plan for an escrow account may be seen like a get-tough-against-BP policy but still be designed to further protect BP. The telltale indicator will be the amount of BP assets set aside for the escrow fund.
3.
The anger of the people is spreading around the country especially as estimates of the amount of oil gushing into the Gulf are growing exponentially. To be more precise, what is changing is the weakening of the corporate and political cover-up of actual spill volume. Substantial amounts of oil being funneled to the surface by BP from its new cap are not being processed by BP's on-site tanker because it lacks capacity, so the oil is being dumped back into the Gulf. BP says it can't get more tankers to the area until July. The relief well planned for August may not even work then.
4.
At the same time, President Obama held what was reported as a "warm and constructive" phone call with the British Prime Minister David Cameron on Saturday in which he recognized that BP "is a multinational company" and reassured Cameron that he did not want to undermine BP's value. Obama had been hoping that BP would suspend its upcoming shareholder dividend (estimated at more than $10 billion annually), but BP has vacillated publicly on whether it intends to do so. The administration is worried that BP might not do enough to placate the public and that the dire necessity of the situation, as evidenced by Louisiana's and Florida's independent demands, will overtake the administration's attempts to appear in control of the problem.
Seize BP’s position on the Obama administration’s New Approach Toward BP’s Assets
While it is clear that the Obama administration has undertaken what appears to be a dramatic shift in its handling of one part of the crisis, there are two central issues that will indicate whether it is just another sham public relations offensive or something that will make a real difference for the suffering people and communities in the Gulf states: (1) The size or amount of the escrow fund taken from BP’s assets (the real costs are likely to be in the tens of billions of dollars) and (2) that the “real people” of the affected communities, and not corporate and banking representatives or Wall Street lawyers, be selected to be the trustees of the fund.
Seize BP, since it inaugurated the demand to create a trust from seized BP assets, has demanded “that a trust established with the funds seized from BP should be administered by the people from the harmed area. The trustees should include representatives of the fishers, shrimpers, crabbers, unions, small business people and workers in the tourism and recreation industry, local elected officials, clergy, and independent scientists and environmentalists."
Seize BP will continue to organize demonstrations, rallies, press conferences and banner drops, collect tens of thousands more petitions, and engage in the kind of mass grassroots organizing that can, as it already has, shift the political climate in a way no politician can fail to ignore.
