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JimVanMeerten (67.58)

How do you punish BP?

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22

June 01, 2010 – Comments (9) | RELATED TICKERS: BP , HAL , RIG

Whoa! Before you all jump on me for being some kind of a socialist mole in this capitalist economy hear me out.

When I was back in law school one of the biggest concepts we discussed was how the sentencing should fit the crime or tort. The old "What would God do ?" argument.God would turn back time and make it so the victims would forget the pain and they would be back exactly in the position they were before the incident and the perpetrator would be appropriately punished and could never do that dastardly deed again.

Courts can't do that. They can only restrict the offenders freedom with jail time and award the victims money damages. The pain and loss is still there and there is almost no way the court can make sure it will never happen again.

Was this oil spill an accident? If your definition of an accident is something that was unforeseeable and unavoidable then a big NO! Every environmental group warned that there would be an off shore oil rig spill so the unforeseeable excuse is out the window. Was it unavoidable? Another big NO! They will have to prove how they will avoid the same occurrence in the future or they'll never be allowed to drill another off shore well.

I watched the Washington hearings and heard BP ( BP) , Halliburton ( HAL ) and Transocean (RIG ) management not take responsibility and blame it on each other. It was almost like listening to recordings of the Nuremberg Trial after WWII. " I was just a lowly soldier following orders". Just more choruses of the " I was not a Nazi Polka".

I've read where business in the Gulf region is down 30%. Who will pay the waitresses who will be taking home 30% less tips. Who will pay the maids working in the small hotels and motels when 30% of them are laid off. Who will pay the small business owner whose receipts are 30% less?

I live all the way in Charlotte and read that seafood prices even in our region have sky rocketed. Who will pay the owners of every seafood restaurant across the country who will see their profit margin squeezed because their costs are rising but they can't raise prices to offset it. Who will pay me and you, the patrons of seafood restaurants who raised their prices?

This oil spill is not just an environmental disaster but an economic disaster as well that has ripple effects all across out country and even the world. If we wait months and years for all this to go through the court system can you see all the little people who will lose money but not be reimbursed a dime?

Who got rich because of all the shortcuts taken? The Board, Management and Stockholders of BP, Halliburton and Transocean. Who are the ones who are paying for their greedy mistakes: the little people get kicked in the butt again. How can you punish the Board, Management and stockholders of the 3 horsemen of destruction?

All the courts can do is restrict the freedom and punish with monetary fines. That leaves jail time of the Board, Management and loss of your investment for the stockholders.Who will help the waitresses, maids and small business owners pay their bills next month? Not the Board, Management and stockholders of BP, Halliburton and Transocean.

You are the judge and jury. You see the crime unfold daily on TV. You see and feel the pain of the countless victims across the country. What do you think the punishment should be?

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: I hold no positions in BP, HAL or RIG at the time of publication

9 Comments – Post Your Own

#1) On June 01, 2010 at 1:02 PM, brickcityman (< 20) wrote:

I've been thinking of making up some signs to affix to my local BP stations price board in front of the store...

 

Regular == "Shrimp Flavored"

Midgrade == "Oyster Flavored"

Premium == "Pelican Flavored"

 

Would make for a great picture to forward via email...

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#2) On June 01, 2010 at 1:38 PM, smartmuffin (< 20) wrote:

Seems that your definition of accident pretty much disqualifies anything from ever being one.  Everyone who operates a motor vehicle does so knowing that a fatal crash is a distinct possibility that happens at alarmingly high rates.  Furthermore, anyone who engages in ANY risky behavior whatsoever (speeding, cell phone, eating, driving while sleepy, etc.) isn't taking every possible precaution.  Is it not an accident if someone, knowing full well auto accidents are possible and slightly more likely at higher speeds, gets into one while traveling 5 mph over the speed limit?  Is this person obligated to make some detailed plan as to how he plans on avoiding getting in a crash ever again before he's allowed to drive again?

 Also, your assertion that BP management, stockholders, etc. "got rich" from violating safety procedures and "aren't paying for it" now is ridiculous.  I'm fairly confident that the CURRENT cost to BP has already far outweighed any amount of money they saved by not having slightly more effective or obtrusive safety procedures.  Many top officials are likely to lose their jobs here, and anyone who owned BP stock prior to this (which includes a lot of the management) is now down some 40%.  Let's not act like BP is thrilled with this result, that they somehow pulled one over on us and "got away with it"

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#3) On June 01, 2010 at 2:07 PM, tlb24 (96.83) wrote:

@smartmuffin

Even prior to the spill, BP's safety record was terrible: http://abcnews.go.com/WN/bps-dismal-safety-record/story?id=10763042. Trouble is, no one paid attention to the warning signs.

My mother, who works for ExxonMobil, told me she wasn't at all surprised to learn that it was BP that was responsible for the disaster. Within the oil industry, BP was "earning" a reputation for carelessness.

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#4) On June 01, 2010 at 2:12 PM, davejh23 (< 20) wrote:

Force them to pay the actual costs of clean-up and to reimburse the entire gulf fishing industry for a lifetime of lost wages...I know I'll never eat anything out of the gulf again.  Since BP will never see the kind of money it would take to truly clean up this mess (unless they have a multi-trillion dollard insurance policy), nationalize them.  Pay their executives a modest government wage, and organize efforts to funnel all profits going forward to those directly affected.  This still wouldn't cover the damage, but they shouldn't get off just covering costs to stop the leak.

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#5) On June 01, 2010 at 2:41 PM, JimVanMeerten (67.58) wrote:

SmartMuffin -- Yes I'm saying if you drive while on a cell phone, drink then drive and speed; your fender bender was avoaidable and you should get nailed for it.

 

Accidents shouldn't be used to describe situations where carleless behavior causes other a loss.

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#6) On June 01, 2010 at 3:05 PM, tfirst (36.80) wrote:

This is not the first time this has happened, as far as pollution goes. There was a large oil spill in Galveston in the '70s. This is a terrible accident and I'm not trying to minimize fault or blame but we already have the bacteria that will eat the oil. It will take a whole season and I feel really bad for the people that will lose their incomes due to no fault of their own. It will take years for the affected wildlife to recover. I would also like to say that if this would have happened on land, the leak would've been stopped the same day. We have a sea of oil underneath our feet but we can't drill on land. So I say that the envirornmentalists share the blame for this as well as these companies. They are the reason these rigs are 100's of miles out to sea, and why this leak is so hard to stop. Also, there are no oil shortages or supply problems, what has happened is we can't refine any more oil because, they won't allow any new refineries and have set the system up to the point the refineries don't make much anyway.

Also, the dispersant used on the oil comes from a company in Illinois, approved by the present administration. This whole thing goes alot deeper than the well itself........

I can see the ads now......Buy a tank of gas, get free duck...

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#7) On June 01, 2010 at 3:10 PM, smartmuffin (< 20) wrote:

The point is, pretty much everyone speeds, and we do so knowing that it slightly increases the odds of a disaster.  I'm aware that BP had a spotty safety record going into this, but I once again must ask, are drivers who get in a few fender benders responsible for somehow taking steps to prove how they're going to avoid ever getting in an accident before we allow them to ever drive again?

 Saying this isn't an accident because it could have been prevented also applies to every auto accident ever.  More careful/defensive driving, better car maintenance, or just plain staying home could prevent EVERY car crash from happening.  Doesn't mean every single car crash is an intentional act of negligence designed to screw everyone else over.

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#8) On June 01, 2010 at 10:28 PM, awallejr (82.72) wrote:

By definition, every accident is avoidable, so your initial definition of an accident "is something that was unforeseeable and unavoidable" is inaccurate. Afterall if people behaved perfectly no "accident" should have occurred, hence they are avoidable events, which, in a given circumstance and for various reasons, wasn't avoided (namely there was negligence on someone's part).

We do distinguish between criminal and civil conduct, however. Now if that "accident" was caused as a result of some kind of criminal behavior it would no longer be considered an accident (eg., drunk driver kills someone). To use the term "punish" implies criminal activity.  Insufficient facts to determine if this is the case with BP or others involved, though apparently an investigation has been opened.

Assuming no criminal culpability, but only negligence, then the remedies are financial impositions, namely damage awards, clean-up costs and possibly civil fines.

I can't imagine any human being involved wanted this tragedy to occur.  But it happened, and we have to deal with it as best we can.  I understand people impacted are angry, but, unfortunately nothing in life is risk free.  Many a lawyer earned a living off that premise.

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#9) On June 02, 2010 at 10:40 AM, RookieQB (29.04) wrote:

Good post. Rec'd

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