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Time to put BP into temp. receivership

Robert Reich

TEXT OF COMMENTARY

Kai Ryssdal: As the political pressure over the oil leak piles up on President Obama, his administration is leaning on BP. Attorney General Eric Holder announced a criminal investigation yesterday. Today, in the middle of an economic speech in Pittsburgh, the president threw in a few pointed lines about oil companies taking dangerous shortcuts.

Commentator Robert Reich says that is all a fine start, but the White House needs to go one very big step further.


Robert Reich: It's time for the federal government to put BP's North American subsidiary into temporary receivership. This would give President Obama authority to manage BP's operations in the Gulf until the gusher is stopped.

The administration says BP must be in charge because it has the necessary equipment and expertise. The problem is BP is not accountable to the public. It's primary responsibility is to its own shareholders. Under temporary receivership, BP would still have the equipment and expertise. But it would unambiguously be working in the public's interest.

That's the only way the public can be confident it's getting the truth. BP has continuously and dramatically understated the size of the gusher. Even 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.

Receivership would also ensure the public that BP is putting enough resources behind stopping the leak. The company now says it can't be stopped until August, when its new "relief" well reaches the gushing well bore. But do we really have to wait until August?

As of now, the government has no authority to force BP to do anything. Last Saturday, the administration expressed "grave concerns" about BP's attempt to cap the well with a process known as "top kill." It worried the technique would worsen the leak, and BP halted the effort. But expressing grave concerns is not enough. The president needs legal authority to order BP to protect the United States.

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.

No president would allow a nuclear reactor owned by a private for-profit company to melt down in the United States while remaining under the direct control of that company. The meltdown in the Gulf is the environmental equivalent.

Ryssdal: Robert Reich teaches public policy at the University of California, Berkeley.

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