Tuesday, May 18, 2010

Obama As Finger-Pointer-In-Chief

May 18, 2010, 5:45 a.m.
[See the related "Big Oil + Big Corruption = Big Mess," May 10, 2010; "P&L: Public Loss From Private Profit," May 3, 2010.]

Whatever Happened to "The Buck Stops Here"?
(bought to you by FromDC2Iowa.blogspot.com*)

Normally when a large and embarrassing institutional error is revealed by the media, the head of that institution, whether called chair, CEO, executive director -- or "President of the United States" -- steps forward to take responsibility.

President Harry Truman was associated with the constant reminder of that obligation he kept on his desk, the sign that read, "The Buck Stops Here" -- "buck" as in "passing the buck." [Photo credit: Harry S. Truman Library and Museum.]

It was not inappropriate for President Obama to chastise the BP, Transocean and Halliburton CEOs' performance before Congress -- seemingly passing responsibility for the Gulf disaster between themselves faster than the basketball at a college team's ball handling practice.

Fortunately for Obama, he went on to acknowledge, almost as an afterthought, "there is enough responsibility to go around. And all parties should be willing to accept it. That includes, by the way, the federal government."

Unfortunately for Obama, the national finger-pointer-in-chief stopped there, unable to move his arm and hand into a position where he could point at himself.

You had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else. The American people could not have been impressed with that display, and I certainly wasn’t.

I understand that there are legal and financial issues involved, and a full investigation will tell us exactly what happened. But it is pretty clear that the system failed, and it failed badly. And for that, there is enough responsibility to go around. And all parties should be willing to accept it.

That includes, by the way, the federal government. For too long, for a decade or more, there has been a cozy relationship between the oil companies and the federal agency that permits them to drill. It seems as if permits were too often issued based on little more than assurances of safety from the oil companies.

"Remarks by the President on the Ongoing Oil Spill Response," WhiteHouse.gov, May 14, 2010; John M. Broder and Helene Cooper, "Obama Vows End to 'Cozy' Oversight of Oil Industry," New York Times, May 15, 2010, p. A13.
Top executives often take responsibility for their institution's failures in an almost formal, ritualistic, theoretical sense -- failures for which they played no direct role, failures of which they could not even have been expected to have had advance knowledge.

Alas, President Obama's responsibility for the BP oil pollution was not such a failure.

After all, it was not the CEO of the historically disaster-ridden BP, or the head of the ineffective and corrupt Minerals Management Service, who said that offshore drilling could be done in a way to "protect communities and protect coastlines," "protect America's natural resources -- tourism, the environment," and in ways that are today "technologically advanced" and "guided by scientific evidence," "environmentally sound and not risky" with a "low risk environmentally." It was neither of them who asserted that "oil rigs today don't cause spills."

Those cheerleading assertions sound as if they were written by a BP publicist. Hopefully, they were not -- but the result is just the same -- in fact, far more powerful and influential when delivered and carried worldwide from the "bully pulpit" of the President of the United States.

For they were all the words of President Obama, in his personal effort to boost the oil industry's profitable offshore drilling, days before the BP disaster.

So today we’re announcing the expansion of offshore oil and gas exploration, but in ways that balance the need to harness domestic energy resources and the need to protect America’s natural resources. Under the leadership of Secretary Salazar, we’ll employ new technologies that reduce the impact of oil exploration. We’ll protect areas that are vital to tourism, the environment, and our national security. And we’ll be guided not by political ideology, but by scientific evidence.

"Remarks by The President on Energy Security at Andrews Air Force Base," WhiteHouse.gov, March 21, 2010.

[Photo credit: White House] [W]e’ve got to look at our traditional energy sources and figure out how can we use those most effectively and in the most environmentally sound way. . . .

The decision around drilling -- same approach. What we did was we said we’re not going to have drilling a mile off the North Carolina coast or two miles off. But 50 miles off, 100 miles off, where it is appropriate and environmentally sound and not risky, we should allow exploration to begin taking place to see if there’s certain reserves. . . .

But what we did was we tried to look at the scientific evidence and figure out where are areas where low risk environmentally and a high potential upside. . . .

I don’t agree with the notion that we shouldn’t do anything. It turns out, by the way, that oil rigs today generally don’t cause spills. They are technologically very advanced. Even during Katrina, the spills didn’t come from the oil rigs, they came from the refineries onshore.

"Remarks by the President in a Discussion on Jobs and the Economy," Charlotte, North Carolina, WhiteHouse.gov, April 2, 2010.
It was President Obama who encouraged the reversal of policy to permit offshore drilling. It was President Obama who nominated Ken Salazar as his Secretary of Interior. It was President Obama who, presumably aware of big oil's political influence, seemingly cared not at all about the "cozy relationship" between the industry and the Minerals Management Service -- until the oil hit the fan.

The finger pointing should not stop, the buck does not stop, at the MMS; it stops at President Obama's desk, just as it stopped at President Truman's.

President Obama is a bright, sophisticated, well-informed, student of government. Surely he is knowledgeable regarding the phenomenon called "agency capture," or "regulatory capture." That's when an agency created to regulate an industry "in the public interest" ultimately ends up becoming that industry's advocate, its cheerleader, and a partner in its public-be-damned, employee-safety-be-damned, race to ever-increasing profitability and stock prices.

How could it be that he only discovered what he called this "cozy relationship between the oil companies and the federal agency that permits them to drill" after the BP Gulf disaster?

Had he not connected the dots between the results of agency capture (the failure of the Mine Safety and Health Administration to close the mine) and the deaths of 29 coal miners in the Massey Upper Big Branch disaster on April 5, one month before his "cozy relationship" speech? Ian Urbina, "No Survivors Found After West Virginia Mine Disaster," New York Times, April 10, 2010, p. A1 ("The blast at Upper Big Branch comes four years after a pair of other West Virginia mine disasters — an explosion that killed 12 miners at the Sago mine and a fire that killed two at the Aracoma Alma coal mine. . . . In 2008, the Aracoma Coal Company, a subsidiary of Massey, agreed to pay $4.2 million in criminal fines [for] several safety violations related to that fire. . . . This week’s blast comes after a year in which the Upper Big Branch mine had repeated problems with methane buildups [and had been] cited . . . eight times for 'substantial' violations . . ..")

Was he unaware of the 1989 Exxon Valdez spill?

Did he totally miss the 2008 story all over the media that, "Government officials in charge of collecting billions of dollars worth of royalties from oil and gas companies accepted gifts, steered contracts to favored clients and engaged in drug use and illicit sex with employees of the energy firms, federal investigators reported yesterday." Derek Kravitz and Mary Pat Flaherty, "Report Says Oil Agency Ran Amok; Interior Dept. Inquiry Finds Sex, Corruption," Washington Post, September 11, 2008; and see. Noelle Straub, "GAO Audit: MMS Withheld Offshore Drilling Data, Hindered Risk Analyses in Alaska," New York Times/Greenwire, April 7, 2010 -- roughly three weeks before the current disaster.

Had he not heard, specifically with regard to BP, of "the 2005 explosion at a refinery in Texas City" for which BP was fined "a record $87 million for neglecting to correct safety violations;" or that "only a year later, a leaky BP oil pipeline in Alaska" resulted in "$20 million in criminal penalties;" or that "last year, when the federal Minerals Management Service proposed a rule that would have required companies to have their safety and environmental management programs audited once every three years, BP and other companies objected"? Clifford Krauss, "Oil Spill’s Blow to BP’s Image May Eclipse Costs," New York Times, April 30, 2010; and see additional details and comparisons with other companies in Jad Mouawad, "BP Has a Record of Blasts and Oil Spills," New York Times, May 9, 2010, p. A22 ("BP, the nation’s biggest oil and gas producer, has a worse health, environment and safety record than many other major oil companies, according to Yulia Reuter, the head of the energy research team at RiskMetrics . . ..").

When I received my first presidential appointment (U.S. Maritime Administrator), I sat in the oval office with the president, one-on-one, while he provided me instructions in no uncertain terms as to what he wanted done with regard to the "agency capture" in the agency I was about to head. Indeed, I have always assumed that one of the reasons for my unlikely selection, for this job -- a job for which I had not applied, and for which I expressed disinterest to the President when it was offered -- was that I did not have any association with the shipping or ship building industries.

That's a part of what concerns me about the number of former Goldman Sachs employees brought into the Obama Administration, including Secretary of Treasury Timothy Geithner, and the wisdom of appointing Ken Salazar Secretary of Interior given his ties to the energy industries.

(Goldman Sachs alums have infiltrated the government, from the Fed to the Treasury to the White House itself, and also influence Congress. See, e.g., the summary in Alex Floum, "Goldman Sachs alumni hold many of the top government positions," Economic Policy Examiner, May 6, 2010; Albert R. Hunt, "Scarlet Letter for the Greed Generation," New York Times, April 25, 2010 ("Goldman’s political action committee gave $290,500 to congressional candidates last month as Congress weighed the financial-regulation overhaul. Mr. Obama shook the Goldman Sachs money tree for almost $1 million in his presidential campaign.").)

Surely he has appointed someone, to head an agency somewhere in Washington, who is a true consumer advocate, someone who is challenging corporate abuses. But offhand, I must confess, no name immediately comes to mind.

Does President Obama provide explicit directions to his appointees regarding agency capture, like those President Johnson provided me? Or, from his behavior, and the absence of any instructions to the contrary, do agency heads' sensitive antennae pick up the sense that corporate interests should be accommodated rather than challenged?

Public relations firms' libraries are full of playbooks for handling an institution's screw ups after they reach the media. The top guy should issue a statement saying his thoughts and prayers are with the families of those killed (killed needlessly as a result of the institution's negligence and lack of management oversight). (E.g., "President Obama earlier on Friday [April 9] expressed his condolences to the families of those [29 coal miners] killed or injured in the [inadequately regulated Massey Upper Big Branch coal] mine explosion." Ian Urbina, "No Survivors Found After West Virginia Mine Disaster," New York Times, April 10, 2010, p. A1.)

A statement is issued reaffirming the institution's commitment to the highest standards of ethics and quality control. A commission is appointed to investigate the totally unpredictable disaster that occurred, "so that this will never happen again." We're all familiar with that process.

Indeed, many institutions leave one with the impression it is only the failures that make their way into the mainstream media that are of any concern at all. Employees' expressions of concern are at best ignored, and at worst lead to the complaining employee's dismissal. This seems to have been the case at the Minerals Management Service. Ian Urbina, "U.S. Said to Allow Drilling Without Needed Permits," May 14, 2010, p. A1 ("The . . . M.M.S. . . . routinely overruled its staff biologists and engineers who raised concerns about the safety and the environmental impact of certain drilling proposals in the gulf and in Alaska, according to a half-dozen current and former agency scientists.").

We need to judge the heads of major institutions -- including our presidents -- not on the basis of how they respond to the institutional public relations disasters after they reach the media and public, but how they hopefully prevent and respond to those that fall well below the media's radar.

When you choose foxes to protect the public's chickens you cannot fairly express surprise when the size of the flock begins to dwindle. Nor can you expect much from the report of a commission of foxes that does little to prevent future losses, and concludes that those losses are not the fault of the foxes. Nor does it solve the foxes' inherent conflicts of interest to ask the head fox to separate the single group of foxes into two groups of foxes -- or even to replace the head fox with a different fox. Juliet Eilperin, "Obama to create commission to investigate gulf oil spill," Washington Post, May 18, 2010; Juliet Eilperin, "Salazar to split MMS into two agencies," Washington Post, May 11, 2010 ("Interior Secretary Ken Salazar announced Tuesday he had commissioned an independent review of the BP oil spill and will split the Minerals Management Service into two parts"); Juliet Eilperin, "Interior Dept. official at MMS resigns," Washington Post, ("Chris Oynes, the top Interior Department official who oversees offshore oil and gas drilling for the Minerals Management Service, announced Monday that he will retire on May 31 . . ..").

I'm not suggesting that the Administration of President George Bush was better in terms of agency capture. If anything, it was probably worse. But the BP Gulf disaster can't be blamed on George Bush. Obama has been president for well over a year, and was planning his presidency at least since the election in November 2008.

We know he voted as a senator to grant immunity to the phone companies that had turned the private records of their customers over to the government in violation of law. We saw his early direction of millions of dollars of taxpayers' money to banks and other businesses -- rather than genuine jobs creation programs like the CCC and WPA that worked for President Roosevelt and would have been the quickest and cheapest way to actually create jobs. We watched as he refused to even consider universal single-payer health care, and then took a public option off the table. We know he held secret closed door meetings at the White House with representatives of Big Pharma that undercut patients' rights to more pharmaceutical options at lower prices. We recently witnessed the consequences of his failure to reform federal oversight of coal mine safety.

And now we're looking at what has been characterized as the most devastating environmental disaster in the history of America as a result of the "cozy relationship" between his MMS and the oil industry.

Barack Obama was my candidate. He is my only U.S. President. There is still a great deal about him that I like and admire. I want him to succeed.

But I don't think it helps him to succeed for his supporters to turn a blind eye to his turning a blind eye to corporations turning a blind eye to the public interest.

* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself.
-- Nicholas Johnson
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1 comment:

Nick said...

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