Do we have a "nanny state?" That expression is used to describe a government when it supplies services and supports or regulates people out of their problems. However, if the nanny state were really operating, it would have enforced a proposed requirement for an emergency shut-off device that could have prevented the catastrophic oil spill in the Gulf of Mexico. But no, the oil industry lobbied the Minerals Management Service, the federal regulatory agency responsible for such requirements, saying the $500,000 device (per well) was too expensive. Gee, I wonder how much BP is spending now? As the old adage says, "a stitch in time saves nine."
But there seems to be no hesitation on the part of this highly profitable corporation in accepting the services and leadership of the U.S. Coast Guard in cleaning up their mess. Isn't that what nannies do? Clean up messes the kids have made? And, following the metaphor, nannies usually don't have the authority to discipline the kids in order to prevent messes. So perhaps we do have a nanny state, maybe even a perfect example of the role: Not enough authority to prevent problems or adjudicate conflicts among the kids, but just enough energy and know-how to fix the problem after the fact. After the fact is undoubtedly going to be a long time coming, just like after the 1989 Exxon Valdez spill. Payments for direct and punitive damages weren't totally settled until 2008, due to Exxon's repeated appeals of lower court decisions all the way to the U.S. Supreme Court.
On the news last week, I heard Washington Sen. Maria Cantwell quizzing Lamar McKay, president and chairman of BP America, about what kind of reparations the company is going to pay for damage caused by their oil spill. Using the Exxon Valdez spill as a model, Cantwell asked whether BP would pay for "harm to the fishing industry, both short term and long term," and McKay said BP will pay "all legitimate claims," his response to Cantwell's questions regarding business losses of various types. That is, until Cantwell got to the loss of state and local tax revenues that would result from the loss of incomes from tourism, fishing, and property values... that's when BP's official answer was, "Question mark."
Why would there be an exception for tax revenues, which are one of the outer rings of the ripple effect from this, or any other, disaster? A loss of revenues would make it more difficult for states to balance their budgets; while Washington's state constitution allows borrowing to plug a budget hole, more than 40 states require a balanced budget without borrowing. Does BP think calculating lost tax revenues is just too complex, or is it that they've successfully (and literally) bought off the federal government and believe state and local governments might not let their behavior slide? (Besides, it's more complicated and expensive to lobby 50 states than one federal government.)
One thing I didn't hear and neither did Cantwell: What BP defines as "legitimate." She ended her questioning by saying, "I hope we never get into a situation in a court where we are now debating what is a legitimate claim."
The spectrum between legitimate and illegitimate is full of nuances. If BP is willing to pay "all legitimate claims," legitimate is the key word; an operational definition is needed. Illegitimate used to simply refer to a child born out of wedlock with no right to an inheritance; in practice, illegitimate offspring have often gained wealth or power from their erstwhile fathers, but those were human beings, not corporations.
My suspicions about why BP might not want to compensate state and local governments for lost tax revenues are reinforced by news coverage of proposed legislation to reduce global warming. Critics say the Kerry-Lieberman bill would gut the Clean Air Act and be less effective at controlling greenhouse gases (mostly produced by burning fossil fuels) than many state regulations. There's a coalition of northeastern states that have already enacted rules more stringent than the federal government's. Could it be that BP recognizes that trend as evidence that local and state governments are less susceptible to corporate lobbying?
Think about the states being impacted by the Gulf spill-they're already some of the poorest in the nation and this will make them even poorer. A big drop in tax revenue means loss of services, including the ability to enforce regulations. As usual, nannies are supposed to stay subservient and poorly paid.
Victoria Stoppiello is a freelance writer and recommends (www.martenlaw.com/newsletter/20100505-deepwater-horizon-spill) for a history of the litigation following the Exxon Valdez spill and how the current oil spill is an even more complex problem. You can reach Victoria at email@example.com.