Last week, published reports surfaced that the ongoing negotiations between BP and the U.S. Justice Department to determine fines and penalties related to the 2010 Gulf oil spill have taken a bizarre turn.      Rather than advocating on behalf of the victims of the unprecedented environmental disaster – coastal communities in the five Gulf states – the Obama administration could be cutting a deal that allows BP to write off much of the fines as a tax deduction.
What’s more, the bulk of the penalty collected by the federal government would essentially be walled off from local control to be doled out as the administration sees fit – in direct conflict with the RESTORE Act.
Over a year ago, Gulf Coast lawmakers joined efforts in both Houses of Congress to craft legislation that would ensure the majority of penalties paid by BP and other parties responsible for the 2010 oil spill are directed to Alabama, Florida, Louisiana, Mississippi and Texas.  Under the RESTORE Act – which passed Congress in late June and was signed by President Obama in early July – 80 percent of Clean Water Act fines would go to the Gulf Coast Restoration Trust Fund to be divided among the five Gulf states for local economic and environmental restoration.
The bicameral bipartisan teamwork that forged the RESTORE Act was remarkable given the political differences that have prevented Congress from passing much significant legislation over the last two years.  Democrats and Republicans alike – from the east and west coasts and in between – gave their support to RESTORE.  The enactment of the landmark legislation also gave hope to communities from Texas to the Florida panhandle that they would finally be made whole after the worst offshore oil spill in American history ravaged our shorelines just two short years ago.
Last week, news broke that the Justice Department was finalizing a deal to disproportionately divert most of the potential fines into a new pot (National Resource Damage Assessment, “NRDA”), which the Obama administration would control.  The remainder would flow into a smaller pot (Clean Water Act, “CWA”), from which the RESTORE Act would be funded.  The potential loss of fine money flowing to our coastal communities could be significant as total fines collected are predicted to range from $5 billion to $20 billion.
The Justice Department’s 11th hour end-run around the Gulf Coast states is not only an affront to the intent of Congress, which strongly endorsed the RESTORE Act, but it is also a blatant act of hypocrisy from an administration that has repeatedly attacked tax breaks for oil companies.  How can it justify allowing BP tax write-offs for fouling the Gulf?
Last week, I initiated a letter to Attorney General Eric Holder – which was signed by other Gulf Coast lawmakers, including Senator Jeff Sessions – strongly objecting to Justice Department efforts to shortchange the RESTORE Act.  “…We are in the strongest possible terms opposed to any settlement agreement that disproportionately applies penalties to NRDA over CWA.  Any attempt to do so would be viewed as an effort to circumvent the will of Congress and the President, and the enacted formulas and procedure agreed upon in public law under the RESTORE Act,” our letter states.