For Immediate Release
BP Escrow Fund Set-Up Is Inappropriate, Would Make Government a Virtual Partner in Gulf Oil Production
Public Citizen Sends Letter to Obama Citing Conflicts of Interest and Calling for a Change in the Fund’s Structure
WASHINGTON - A proposal to use revenue from BP's oil and gas wells in the Gulf of
Mexico to ensure the solvency of a $20 billion escrow fund for victims
is a bad idea because it will create a conflict of interest for the
government and make it a partner in Gulf oil production, Public Citizen
told the administration today.
In a letter sent to President Barack Obama, Public Citizen noted that
the proposed arrangement creates two main conflicts:
1) The proposal would inhibit the government's ongoing criminal
probes of the company. The government would be reluctant to mete out
harsh sanctions to BP - such as banning the company from federal leases
in the Gulf - if the victims' fund relies on BP revenue from the Gulf.
2) BP's management problems are well-known and deep. The company has
one of the worst environmental and worker safety records in the
business. If the escrow fund is conditional on offshore drilling
profits, would the administration address BP's systemic safety problems
that the Deepwater Horizon incident has exposed?
"The proposed arrangement is wildly inappropriate, as it will make
the government and BP virtual partners in Gulf oil production," said
Tyson Slocum, director of Public Citizen's Energy Program. "It will give
the government a financial incentive to become an even bigger booster
of offshore oil drilling in the Gulf - which was the fatal flaw of the
Minerals Management Service at the time of the BP disaster."
Public Citizen urges the administration to change the way the fund
is structured to ensure the government can remain unbiased and
prioritize the public's interest - not BP's interests.
The letter is available at http://www.citizen.org/Page.aspx?pid=4060.
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