on KCET, as part of 'Things that aren't here anymore". Right after
the opening section on the Brown Derby. Try it, you'll like it.
This Reich interview is not only powerful and on the mark, but notes
the public reversion of Clinton's Labor Secretary as a major, cogent
critic of today's governance. A most welcome voice for many of us. -Ed
http://www.democracynow.org/2010/6/18/spill
Fmr. Labor Secretary Robert Reich: US Should Put BP Under Temporary
Receivership During Gulf Coast Recovery
Democracy Now Interview
June 18, 2010
AMY GOODMAN: We turn now for more on BP and the worst environmental
catastrophe in US history to two guests. Robert Reich is with us, the former
Secretary of Labor under President Clinton, now a professor of public policy
at the University of California, Berkeley. And joining us from Washington,
DC, Tyson Slocum, the director of Public Citizen's Energy Program.
We welcome you both to Democracy Now! Let's turn to Robert Reich.
AMY GOODMAN: You're calling for the-well, putting BP into temporary
receivership. Can you explain what you think should happen now?
ROBERT REICH: Well, Amy, to me, it is simply impermissible to have the
rescue operation, the operation that is trying to plug the hole at the
bottom of the Gulf of Mexico and contain the oil spill, under the direct
control of the same company, BP, that was responsible, whose recklessness
and negligence seems to have generated all of this, to begin with, a company
that has a history of cutting corners. You know, five years ago, the North
Slope of Alaska, one of the worst oil spills we've ever experienced up
there, the same company. BP should not be doing this. BP should be paying
for it. But actually, the operation ought to be under the direct control of
the United States, the commander-in-chief of the United States, the
President, has got to know what's going on, summon the right resources,
whether it's the Navy, the Marines. Certainly BP's expertise should be used,
but that expertise needs to be under the direct and direct control of the
President.
JUAN GONZALEZ: But what about the President's repeated statements that BP is
in charge, and it's their responsibility to clean up the mess they made?
ROBERT REICH: Well, Juan, certainly it's their responsibility to pay for it,
and we need to use whatever expertise they have. If Tony Hayward's testimony
yesterday is any evidence of their expertise, there isn't very much
expertise. I mean, Tony Hayward seemed like he didn't know what was going
on. But my point is not so much in the payment. Yes, BP should pay for it.
But in terms of the actual execution of the whole job of stopping this leak
and containing the spill and cleaning everything up, it should not be under
the direct control of BP. There's no reason to trust BP. BP has continuously
lied to us with regard to the amount of oil that was being generated from
that hole. BP has continually failed to balance the public interest
accurately against corporate interests. BP is under the direct financial and
legal requirement that it maximize shareholder returns, not that it protect
the United States, not that it guarantee the security of American citizens
and the environment. BP should not be in control of this operation.
JUAN GONZALEZ: I'd like to ask you, we played the clip of Representative Joe
Barton calling President Obama's meeting with BP executives a "shakedown,"
but I want to quote to you from a prior hearing, a congressional hearing
four years ago on BP, what Joe Barton said then. He said-this was in dealing
with the spill that occurred in Alaska, and Barton said, "If one of the
world's most successful oil companies can't do simple basic maintenance
needed to keep the Prudhoe Bay field operating safely without interruption,
maybe it shouldn't operate the pipeline." Barton went on to say, "I am even
more concerned about BP's corporate culture of seeming indifference to
safety and environmental issues. And this comes from a company that prides
itself in its ads on protecting the environment. Shame, shame, shame." That
was Joe Barton four years ago, but now he's saying that President Obama is
shaking down the company. Your response?
ROBERT REICH: Yeah, well, look, Representative Barton, the senior ranking
Republican on the Energy and Commerce Committee there, he has a view-I don't
share it, obviously, but some Republicans, most Republicans, and a lot of
apparently Tea Partiers and others share the view that if it comes down to
who you trust least, big government or big corporations and Wall Street,
they trust big government less than they trust big corporations and Wall
Street. And frankly, when we have seen what's happened, Wall Street's near
meltdown and Goldman Sachs depredations, when we've looked at Massey Energy
and what's happened to the miners in that terrible explosion, when we've
looked at what the oil companies, BP has done, or the insurance companies,
such as WellPoint, the last five months have been a kind of a lesson to a
lot of Americans in what corporations will do in pursuit of profits if they
are not checked by government. We need not only appropriate regulation, but
we need to go beyond appropriate regulation.
I mean, what we should have done with Wall Street is to cap the size of
those firms, use the antitrust laws, make sure that no big Wall Street bank
is too large to fail. What we should have done with healthcare is make sure
that there was a public option or Medicare for all, rather than continuing
to allow the entire healthcare system of America to be under the control of
private, for-profit insurance companies that are not in the interest and are
not acting in the interest of the public. What we needed to do in the Gulf
and what we need to do right now is to put the President directly in charge
of the cleanup effort, because, again, it's not that these big companies are
totally untrustworthy, they are very trustworthy in one very narrow respect,
and that is maximizing the returns to their shareholders. That's what they
are set up to do. They are not set up to respond to the public interest.
AMY GOODMAN: So what's stopping President Obama from doing this, doing what
you're calling for in the Gulf and on the other issues you're talking about?
Many people feel that they voted for him because they thought he would do
these things.
ROBERT REICH: Amy, I think that there are a couple of things. And, you know,
I scratch my head to try to figure it out. I mean, one is that he is
confronted with a requirement in the Senate of getting sixty votes, and he
barely can summon sixty votes. Now, that raises another interesting
question: why doesn't he and why don't the Democrats and the leadership say,
"Look, the sixty-vote supermajority is not in the Constitution, there is no
reason we have to continue to subscribe by it"? But let's just take, for at
least now, the stipulation that he's got to get sixty votes.
Also, the big corporations, you know, have never, never, in my
experience-and I've been in and out of Washington for thirty years-have
never had the clout, the power, that they have right now. I mean, they are
inundating Congress and members of Congress, Senate and representatives,
with money, campaign money. They're distributing campaign money all over the
place. Their lobbyists are all over the place. There is not counterveiling
power in Washington of a sort that we saw, let's say, forty years ago, when
you had big corporations, but you also had very powerful unions, when you
had very powerful environmental groups that really could take on big
corporations, head to head, toe to toe. Right now, you've got a situation in
Washington such as I have never seen, I think that probably we've not seen
since the late nineteenth century, when the robber barons of oil and finance
and the great trusts ran roughshod over democracy.
JUAN GONZALEZ: I'd like to bring in Tyson Slocum of Public Citizen into the
conversation. You've called for the federal government to suspend its
contracts with BP. Could you talk about what those contracts are and also
about BP's record, which, if we were talking about street crime, we'd call
them a predicate felon?
TYSON SLOCUM: Right. Public Citizen researched and found that BP has over $2
billion in outstanding contracts to deliver oil and fuel to the Department
of Defense, and we believe that BP's habitual corporate criminal record-two
of the company's US subsidiaries are currently on criminal probation and
were actually debarred by the Environmental Protection Agency under its
authority under the Clean Air Act and the Clean Water Act, the two statutes
that the company pled guilty to to federal criminal violations. And we feel
that BP-that providing services to the federal government is a privilege,
not a right, and that taxpayers should not be spending over $2 billion to
give to a company while it destroys the ecosystem and the livelihoods of
millions of people in the Gulf of Mexico.
You have to remember that what's happened here in the Gulf is not an
isolated incident in BP's history. BP has the worst track record of any oil
company operating in America. They've paid more than $700 million to settle
allegations of wrongdoing in the last couple of years. But we also have to
recognize that problems in ultra-deepwater drilling are not just isolated
with BP, as we learned when the five major oil companies testified before
Congress earlier this week that none of the oil companies operating in the
deep Gulf of Mexico have an adequate response plan. None of them have a
contingency plan to deal with a catastrophic blowout. So the corporate
irresponsibility extends far beyond BP to the entire petroleum industry. How
on earth can you have an industry that is focused on extracting oil from
deep in the ocean in the Gulf of Mexico and not a single company has a plan
drawn up to deal with the kind of catastrophic blowout that we're
experiencing today? This justifies calls to stop all deepwater drilling,
because we simply do not have a plan by these giant oil companies.
And I agree completely with Robert here, that we've got a culture where
corporations have been allowed to take over energy policy. The deregulation
movement that was pushed by a large number of members of Congress, who were
doing those tough questions yesterday of BP's CEO, Tony Hayward, you have to
remember that whether we're talking about Wall Street, whether we're talking
about big oil companies, it was radical elements in Congress that removed
consumer protections and government oversight over these powerful
industries, and these industries have been free to operate without concern
to the safety of workers, without concern to the American economy, and
without concern to the environment. And we need to undo this radical era of
deregulation and understand that these powerful corporations are committing
crimes and doing great harm against the people.
And I wish that Barack Obama was taking more of a lead, because I think that
he has been timid, and he has been compromised by the fact that on March
31st, just a couple of weeks before this explosion and blowout, he called
for a huge expansion of offshore oil drilling. Barack Obama made a political
calculation that he needed the oil industry's support to further climate
change legislation, and when Barack Obama called for that expansion of oil
drilling, he never said that we needed to completely restructure the broken
regulator, he never said we needed to rein in the power of the oil
companies. And I think that has really compromised Barack Obama to be able
to be a leader on this, because he doesn't have legitimacy because of his
strong support for offshore drilling-a moratorium, by the way, that was
imposed back in 1982 by the Republican president, Ronald Reagan.
AMY GOODMAN: And the relationship between BP and the Pentagon, Tyson Slocum?
TYSON SLOCUM: Well, yeah, I mean, you've got a situation where BP has at
least six outstanding contracts, where taxpayers are paying more than $2
billion to BP to deliver fuel to the Pentagon, mainly to the Air Force, for
fuel deliveries. And we feel that this contract ought to be revoked. I don't
think that revoking this contract is going to inhibit the ability of BP to
pay what is owed to the people of the Gulf. This is $2 billion, which is a
lot of money to taxpayers. But for a company that's got $235 billion in
assets, they've got plenty of money to set aside to pay for the damage that
it's caused.
And I have a criticism of the White House's settlement of a $20 billion
escrow account, because it's not enough. That is just the tip of the iceberg
of the costs that are going to come to the loss of economic damage to
fishermen, to tourism. And how on earth do we put a price tag on the
permanent destruction of the Gulf of Mexico marine and coastal ecosystems?
We're talking about permanent damage to one of the richest and most diverse
marine life on the planet, and that damage was caused by negligence on the
part of BP. So we need a lot more than $20 billion. And my concern is that
BP is a global operation, and I feel that-or I fear that BP America might
try to shelter itself from the valuable assets outside of the United States
by the parent company headquartered in London.
JUAN GONZALEZ: I'd like to bring back Robert Reich, and we've only got a
couple of minutes before your feed goes down there, but I'd like to ask you
about another issue: NAFTA. Many years ago, back in the early '90s, when you
and other members of the Clinton administration were going around trying to
convince the editorial boards of newspapers to back NAFTA, we had a spirited
debate at the Daily News editorial board meeting over the issue. I'm
wondering your assessment. Did Mexico benefit from NAFTA that the Clinton
administration pushed? And in retrospect, what do you think was good or bad
about the deal?
ROBERT REICH: Juan, in retrospect, I think both sides, those who were very
concerned about loss of jobs due to NAFTA in the United States and also
those in Mexico and also in the United States, such as the Clinton
administration, who thought that NAFTA was the best thing since sliced
bread, both of those sides were proven wrong. Those jobs didn't go to
Mexico. They went to China. But the one winner in NAFTA, and a big winner,
was Mexico in terms of the peso crisis. I think that peso crisis, you may
remember, in 1998, would have been much worse, were it not for NAFTA.
But let me just-I just want to wind back, because, as you said, my feed is
going to go in a second, and I want to say one more thing with regard to the
Gulf. And that is that if we do not use this and if the President doesn't
use this as a teachable moment to put a price on carbon, I think he is
missing a huge opportunity here. The American public is notoriously short on
attention span, but this is going on and on and on. It's been, what, sixty
days already, and there is no telling how long this is going to go. If
there's
a silver lining on this disaster-and I don't think there is-but if there is
a silver lining here, it may be that right now is an opportunity to get the
American people behind the idea of putting a price on carbon. And that means
that what the President has got to do is, maybe in conference committee, go
to the-you know, get this energy bill, whatever he can out of the Senate, in
the conference committee between the House and Senate, then put in a very
specific provision to price and put a price on the carbon, on all carbon,
not just oil, but on coal and all carbon fuels, and then use the lame-duck
session of Congress after the election to actually get this enacted.
AMY GOODMAN: Secretary Reich, Professor Reich, you're sitting at the
University of California, Berkeley, where you're now a professor of public
policy. It's interesting that you had this controversy at the university
over the last few years about BP, itself, giving the University of
California, Berkeley, half-a-billion dollars. And that whole effort was
headed up by, well, at the time, Steven Chu, professor at Berkeley, now of
course the Energy Secretary, who's heading up a lot of dealing with BP. What
is the assessment now, at your university or your own assessment, of this
relationship that many were deeply concerned about, the privatization of
public education and this being BP itself?
ROBERT REICH: Amy, there's a question mark hanging over this. First of all,
I hope that the university-and I don't have any information on this-but I
hope the university has got BP to set up its own escrow account here for the
University of California, because BP may be in trouble. As your other guest
was saying, $20 billion is not going to go nearly far enough. There are
going to be a lot of civil complaints and a lot of litigation. It may be
that BP starts-you know, has to pay out hundreds of billions of dollars over
the next couple of years. If Berkeley is going to get anything out of BP,
it's
got to move very quickly and get an escrow fund. And number two, the
administration here has reassured the faculty-and the faculty was not
unanimously in favor of this by any means-but the administration has
reassured the faculty that there is an iron curtain between academic freedom
and what BP wants out of the university. Well, we will see.
AMY GOODMAN: Well, Robert Reich, we want to thank you very much for being
with us, professor of public policy at the University of California,
Berkeley, was Secretary of Labor during the Clinton administration.
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