Update: A shakedown of the first proportion

UPDATE: Here is a link that you may also find interesting regarding this whole deal. http://www.investors.com/NewsAndAnalysis/Article.aspx?id=537967&p=2

KLB

Senator Barton hit this nail right on the head. Unfortunately, the politicians are so worried about the upcoming elections, that they refuse to admit it.



Let's be clear...I am not defending BP or their actions to date in regard to the spill in the gulf. This is strictly about the way the Obama Administration handled them at the White House last week.



When BP signed on to drill in deep water in the Gulf of Mexico, hey signed on with a predetermined liability of $750 million dollars in the event of a problem. They went into this deal knowing that they were willing to risk $750 million for the profits that they woulod reap from this well. Then, when the worst possible senario becomes reality, they immediately step forth and take full responsibility for the mishap and with that responsibility, agree to pay ALL legitimate claims, clean-up costs and damages, regardless of the cost.



The Obama Administration, not wanting to look any more inept, chose to flex their muscles and call the BP leadership to the White House. In that meeting, they forced BP's hand into a $20 billion dollar escrow account (It's been a long time since I took math in school, but this is a lot more than $750 million). Along with the escrow account, the Obama Administration demanded that the account be managed by a third party that is not tied to BP or the White House. BP continues to agree with this shakedown.



Within two days of their meeting, the Obama Administration appointed a manager, Kenneth Feinberg, to oversee this escrow account and gave him instructions on how they expected the claims to be paid. On 'Meet the Press' (NBC) on Sunday morning, Mr. Feinberg failed to answer the one question that I was most interested in...'Who is paying your wages?' It would be my guess that we, the taxpayers, are on the hook for his salary.



Senator Barton was spot on when he said that this was a 'Shakedown of the First Proportion'. The heavy handed Obama Administration called a private business to the carpet and threw the agreed upon penalty out the window, forcing them into another government controlled cashcow to be used as they see fit. If that's not a shakedown, I'm not sure I've ever seen one.



This is a slippery slope and for the business owners out there, this is a shot across the bow that if you want to do business in the United States, there are no rules.