The Obama administration announced this week that it wants BP to transfer “substantial” funds to an escrow account overseen by an independent third party that will handle claims from individuals and businesses affected by the company’s oil disaster in the Gulf of Mexico. “We need to make sure that the interests of people in the Gulf are protected,” senior White House adviser David Axelrod said on Sunday. Congressional Democrats have asked BP to create a $20 billion fund.
Sticking with the “Obama is a socialist” meme, Rep. Michele Bachmann (R-MN) called the account a “redistribution of wealth fund.” Mississippi Gov. Haley Barbour (R) also thinks it is a bad idea. Although he noted on Fox News last night that BP is “saying that they have the ability to pay and that they will pay,” Barbour expressed concern that BP will lose some profits:
BARBOUR: If BP is the responsible party under the law, they’re to pay for everything. I do worry that this idea of making them make a huge escrow fund is going to make it less likely that they’ll pay for everything. They need their capital to drill wells. They need their capital to produce income. … But this escrow bothers me that it’s going to make them less able to pay us what they owe us. And that concerns me. … [I]t bothers me to talk about causing an escrow to be made, which will — which makes it less likely that they’ll make the income that they need to pay us.
Of course, the whole point of the escrow account is to assure that BP — not the taxpayer — is on the hook for the Gulf oil disaster bill. Despite CEO Tony Hayward’s recent claim that the oil giant has paid every claim, BP has actually paid fewer than half and has been less than transparent about the process.
It’s unclear why Barbour is so worried about BP not having enough funds for the account. The company made $163 billion in profits from 2001 through 2009 and nearly $6 billion in the first quarter of 2010 alone. As the Washington Post noted, in the early days of the spill, BP paid $17.5 million per day while the company made on average $93 million per day in the first quarter.
In fact, throughout the oil spill disaster, Barbour has come to BP’s defense, downplaying its impact, blaming the media for his state’s economic woes, and even encouraging tourists to come to Mississippi’s oil contaminated beaches. “BP has never said no to any requests we have made,” he said. “I’m not going to complain.” Indeed, Barbour probably won’t complain because he owes the oil and gas industry for his rise in politics.