President Obama warned British Petroleum today that paying large dividends to its shareholders during the Deepwater Horizon spill was unacceptable:
NEW ORLEANS — President Obama visited the Gulf Coast on Friday and chastised BP for paying billions of dollars in dividends to shareholders and on advertising to save its image while some people whose livelihoods were wrecked by the company’s oil spill were reporting difficulties in getting their claims paid.
“My understanding is that BP has contracted for $50 million worth of TV advertising to manage their image during the course of this disaster,” President Obama said after meeting with local and federal officials at the airport near here.
“In addition, there are reports that BP will be paying $10.5 billion – that’s billion, with a B – in dividend payments this quarter,” he continued. “Now I don’t have a problem with BP fulfilling its legal obligations, but I want BP to be very clear they’ve got moral and legal obligations here in the Gulf for the damage that has been done. And what I don’t want to hear is, when they’re spending that kind of money on their shareholders, and spending that kind of money on TV advertising, that they’re nickel-and-diming fisherman or small businesses here in the Gulf who are having a hard time.”
Where was this lecturing on corporate responsibility when President Obama stuck the tax payers with the irresponsible and indefensible decisions made by General Motors and Chrysler that ultimately cost taxpayers over $60 billion dollars? President Obama had a moral and legal obligation to protect U S taxpayers from harm in the GM and Chrysler bailouts. He ignored them and transferred billions of tax payer dollars to the very unions that broke these auto companies. And now he has the chutzpah to lecture BP on its dividend policy? This statement by President Obama could not make clearer who he thinks are the owners of American industry: labor and government.
Listening to this nonsense, a person might thing car czar Steve Rattner was back in the West Wing directing PR on the BP disaster, but last I heard he was busy trying to avoid the hoosegow owing to his own legal problems.
As for the television advertising, who can blame BP for trying to rebut the “foot on the throat” message prominently advocated by the Obama administration? It is manifestly apparent by President Barack Obama’s rhetoric that he is swinging wildly at every pitch in a doomed attempt to get himself and his administration back in control of the BP spill disaster message.
President Obama is setting yet another dangerous precedent by involving himself in BP’s corporate finance policy and the company’s relationship with its shareholders, many of whom live in oil rich Louisiana, Alabama, Florida and Texas. What better way to further damage these shareholder citizens than reduce their quarterly dividend by political fiat? The president’s bullying of BP on dividend payments has a precedent. Years ago, after the second Arab oil embargo, President Jimmy Carter accused domestic oil giants of obscene profits. When the Wall Street Journal pointed out that the largest owners of these domestic oil companies were U S labor pension funds the news was met with silence by the administration and congress and the issue was later dropped. Somewhere in this process the teleprompter will notify the President that he is alienating a large and wealthy constituency with proposals like this and down the memory hole it will go.