Tuesday, July 27, 2010

Show Us The Money

While news that BP CEO Tony Hayward will be replaced by Mississippi native Bob Dudley broke yesterday, a far more important piece of news has gone largely ignored.

Which is: apparently BP has failed to deposit any money into the promised escrow account:
BAYOU LA BATRE, Ala. -- Ken Feinberg said today he hasn't been able to start writing claims checks because BP PLC has not yet deposited any money into the $20 billion escrow fund it promised to create.

Feinberg, who was appointed last month to administer individual and business claims stemming from the oil spill, held an early morning town hall meeting in Bayou La Batre on Saturday before meeting with the Press-Register editorial board in downtown Mobile.


Feinberg said he doesn't have the authority to force BP to deposit the money, and that he can't start making payments until it does.

"I don't want the checks to bounce," he said.

He said he has been told that the money would be available in the next week or so.

Ah yes, “the check is in the mail.”

I don’t know what the hold-up is, what parts of “the company's agreement with the White House” still need to be “finalized.” I do know that people down in the Gulf have been promised that BP will “make it right,” and the White House has backed that pledge. The vehicle for this is the $20 billion compensation fund. If this doesn’t happen, the repercussions will be devastating.

Consider this:

We talked to several people afterwards, and with typical Southern courtesy they said they were "glad to see" Feinberg, and welcomed him to Alabama.

But most also said "talk is cheap," and "we heard all that from BP, too," just before they started denying claims and reducing compensation.

People aren't stupid. They know when they're being sold a bill of goods. The last thing anyone needs is for the White House to be a carbon copy of BP where dealing with the Gulf Coast is concerned.

Unfortunately, the White House's credibility is now tied to BP's. But let’s remember, when it comes to BP and the U.S. government, it’s a symbiotic relationship.

I don't have a good feeling about this.