The Bully’s Pulpit
posted at 10:30 am on June 17, 2010 by Legal Insurrection
There is so much wrong with how Barack Obama has handled the Gulf oil spill, it’s almost hard to know where to begin.
Put aside the ineptitude of the approval process and clean up response. For today, I’m focusing on the tentative settlement with BP. While many will cheer the fact that BP has committed $20 billion to compensate people in the Gulf region, no one should cheer very loudly.
Another Blow To The Due Process Clause
I am hard pressed to come up with a constitutionally more chilling presidential comment than the following statement made by Barack Obama Tuesday night (emphasis mine):
Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness.
Since when is a President’s wish our command? Under what legal authority did the “rule of law” President make the decision as to how much a private entity would pay and then “inform” the private party that it must obey or face the harsh retribution of the federal government?
This is similar to what happened to the bond holders in GM and Chrysler, whose private property rights were trampled in the name of Obama’s politics.
According to reports, BP also will pay compensation to people who lose their jobs not because of BP’s conduct, but because of the Obama administration’s policy decision to implement a drilling moratorium. We now have the specter of a private company being forced to pay for policy decisions.
Respect for the Due Process Clause of the Fifth Amendment is what separates us from North Korea or Venezuela (emphasis mine):
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
It is beyond me how any person who claims to be a civil libertarian can support this administration. Put aside issues of Gitmo, rendition or other aspects of the war on terror.
When it comes to the foundation of our domestic freedom, Obama has trampled the Constitution with vigor and lack of concern.
One Week’s Worth of ObamaCare
The amount of money BP has committed over a multi-year period is roughly the equivalent of what the federal government will spend on ObamaCare in one week.
$20 billion is not chump change, by any means, and if actually paid promptly to people in the Gulf region will help ease some of the pain.
But don’t kid yourselves, this is not about money. If the federal government wanted to get aid to people right away, it could have used some of the unspent Stimulus Plan money, and then sought reimbursement from BP through the legal process.
How interesting that the President who cares not about running up trillion dollar deficits to fund his social vision now cares so deeply about saving the federal government what amounts to an ObamaCare rounding error.
This was a pure political power play, in which the President could create a demon, and deflect attention away from his own failing conduct with regard to the Gulf.
Hurry Up And Wait
If the Constitution means nothing to you, and all you want is retribution, you will be left very unsatisfied.
The claims procedures apparently have not yet been worked out in detail. But if the 9/11 claims process is any indication, the process will not be fast. And claimants will be limited to compensation for economic losses, which will require that individuals give up whatever other claims they may have.
End result is that I would be surprised to see much money put in anyone’s hands this calendar year.
A Nation of A Man, Not Laws
How often have you heard it said that we are a nation of laws, not men. But in the case of the Gulf claims process, we are a nation of one man, Kenneth Feinberg, who will determine all claims under $500,000.
No appeals, no second chances, not only for BP, but for individuals. The price of submitting to an arbitrary claims process is the loss of access to the judiciary and the legal process. That may be fine for many people, but it is a high price to pay as a nation supposedly of laws.
BP Will Be Happy
Many of you will think that I am defending BP, but that is not true. If anyone will be happy with the federalization of the claims process it will be BP. (Aside, BP is being represented by the ultimate Washington insider, Jamie Gorelick.)
BP is facing a financial death blow in the form of private lawsuits. Whether BP ultimately would succeed in defending those lawsuits based on federal liability caps is besides the point. The prospect of tens of thousands of lawsuits which might result in liability would haunt BP’s business and stock price for years.
And since BP made various federal and state filings with regard to its oil drilling, there is the prospect of criminal charges for fraud, filing false statements, and other crimes which, though a stretch, would put enormous pressure on BP.
This is similar to the situation faced by tobacco companies, which won almost all of the lawsuits taken to trial.
Investigations, and threatened criminal proceedings, combined with the mass tort lawsuits, led big tobacco to the conclusion that its survival as an industry depended upon coopting government through a slush fund. In the case of big tobacco, it was hundreds of billions of dollars, but it was a price worth paying because it ended the legal war and made government a partner, not an enemy.
You May Get What You Wished
This is a case where the imperial whim of the President, and the shrewd business acumen of BP, joined forces in the ultimate inside-the-beltway deal.
As they say, don’t wish too hard for something, you just got it.
Cross-posted with updates at Legal Insurrection Blog
Recently in the Green Room: