Obama and the White House Too Cozy with Corporations

We all heard that Obama said that even his Administration was guilty of being “too cozy” with the oil superpowers that were supposed to be regulated by the U.S. government, not coddled and fawned over.

We also know that BP had no environmental impact plan, except to say that it was “inconceivable”.  It would be funny to relate that back to the movie “The Princess Bride”, which remarked on the term “inconceivable” if this situation was  not so tragic.

When George W. Bush was President, almost all of the people in the Minerals Management Service (MMS) were either former oil company executives or close friends of oil company executives.

That was the Bush plan to make sure that corporate profits were unfettered and free of regulation, for which, the Republicans would be rewarded handsomely during the campaign season.  It did not matter what the corporations did to the country, as long as the GOP received their payoffs from corporations with huge campaign contributions.

MMS is the organization that actually attended parties with members of the oil industry, and shared both drugs and sex with them.  It was reported that one of the members of the MMS may have been high on Crystal Meth while inspecting the Deepwater Horizon oil rig.  Regardless of the truth of that rumor, someone failed in their inspection of the Deep Horizon operations, and 11 men and the Gulf of Mexico are dead because of it.

Once Obama was elected, his head of the Interior Department, Ken Salazar, appointed Sylvia Baca to help operate MMS.  Funny thing about Sylvia Baca – before she began working for the Department of Interior, she spent the previous eight years working for BP.  Yes, the person who has to decide how BP is going to be regulated is a former BP employee.  If that rings a bell, then you are probably remembering that Goldman Sachs was being regulated by former Goldman Sachs CEO’s and other executives.

Obama’s corporatism is showing through like never before.  He wants the campaign support of big corporations, just like Bush did.  The only difference is the degree to which Obama will go to get that campaign money.  He needs to show us that he is serious about reigning in corporate greed and it’s resultant destructive effects.  So far, all he has done is moderate the severity of what corporations will do to this country if allowed.  He has not stopped the corporate operations and provided keen government oversight.  Obama has not shut down the corporations responsible for our yearly corporate Armageddon, or held them accountable.  The UK is even sending the White House the message that BP is too big to fail.

I praise Obama for restructuring the MMS so that the people who are responsible for regulating the oil companies are not the same people collecting fees from the oil companies.  But Obama still has to do more than not be as much of a corporatist “schmuck” as George W. Bush.  Obama has to do more than simply not fail as badly as George W. Bush.

When we voted him into office, the candidate Obama had given us great hope for what?  Change.  See any lately?  Being “Bush-lite” is simply not enough.  We wanted change that we can believe in, and it has to start with good governance by competent people.  The corporate campaign donors that believe that there is a revolving door between industry and government have to be shown that they are no longer welcome.  They can’t run an industry and then turn around and become the government regulators of that industry, as Bush did with the EPA, OSHA, and the mining industry.

Frank Rich had an Op-Ed in the New York Times that describes Obama’s problem.  It’s time for Obama to tap into his inner Teddy Roosevelt.  But I’m afraid all we are getting is his inner Gerald Ford.  You know, the guy that pardoned Nixon, saying it would be best for the country to not have accountability, and that we should all put the past behind us.  Both Obama and Ford thought that the President that preceded them was too big to jail.  Though guilty of many crimes, these Presidents should just have to live the rest of their lives ignominiously, and that would be punishment enough, like Bush said of Scooter Libby.

Here’s an excerpt from Frank Rich’s article:

His most conspicuous flaw is his unshakeable confidence in the collective management brilliance of the best and the brightest he selected for his White House team — “his abiding faith in the judgment of experts,” as Joshua Green of The Atlantic has put it. At his gulf-centric press conference 10 days ago, the president said he had “probably had more meetings on this issue than just about any issue since we did our Afghan review.” This was meant to be reassuring but it was not. The plugging of an uncontrollable oil leak, like the pacification of an intractable Afghanistan, may be beyond the reach of marathon brainstorming by brainiacs, even if the energy secretary is a Nobel laureate. Obama has yet to find a sensible middle course between blind faith in his own Ivy League kind and his predecessor’s go-with-the-gut bravado.

By now, he also should have learned that the best and the brightest can get it wrong — and do. His economic advisers predicted that without the stimulus the unemployment rate might reach 9 percent — a projection that was quickly exceeded even with the stimulus and that has haunted the administration ever since. Other White House geniuses persuaded the president to make his fateful claim in early April that “oil rigs today generally don’t cause spills” — a particularly specious (indeed false) plank in the argument for his spectacularly ill-timed expansion of offshore oil drilling. The Times reported last week that at the administration meetings leading to this new drilling policy, the subject of the vast dysfunction at the Minerals Management Service, the agency charged with regulating the drilling, never even came up.

Obama’s excessive trust in his own heady team is all too often matched by his inherent deference to the smartest guys in the boardroom in the private sector. His default assumption seems to be that his peers are always as well-intentioned as he is. The single biggest mistake he has made in managing the gulf disaster was his failure to challenge BP’s version of events from the start. The company consistently understated the spill’s severity, overestimated the progress of the repair operation and low-balled the environmental damage. Yet the White House’s designated point man in the crisis, Adm. Thad Allen of the Coast Guard, was still publicly reaffirming his trust in the BP chief executive, Tony Hayward, as recently as two weeks ago, more than a month after the rig exploded.

This is baffling, and then some, given BP’s atrocious record prior to this catastrophe. In the last three years, according to the Center for Public Integrity, BP accounted for “97 percent of all flagrant violations found in the refining industry by government safety inspectors” — including 760 citations for “egregious, willful” violations (compared with only eight at the two oil companies that tied for second place). Hayward’s predecessor at BP, ousted in a sex-and-blackmail scandal in 2007, had placed cost-cutting (and ever more obscene profits) over safety, culminating in the BP Texas City refinery explosion that killed 15 and injured 170 in 2005. Last October The Times uncovered documents revealing that BP had still failed to address hundreds of safety hazards at that refinery in the four years after the explosion, prompting the largest fine in the history of the Occupational Safety and Health Administration. (The fine, $87 million, was no doubt regarded as petty cash by a company whose profit reached nearly $17 billion last year.)

No high-powered White House meetings or risk analyses were needed to discern how treacherous it was to trust BP this time. An intern could have figured it out. But the credulous attitude toward BP is no anomaly for the administration. Lloyd Blankfein of Goldman Sachs was praised by the president as a “savvy” businessman two months before the Securities and Exchange Commission sued Goldman. Well before then, there had been a flood of journalistic indicators that Goldman under Blankfein may have gamed the crash and the bailout.

It’s this misplaced trust in elites both outside the White House and within it that seems to prevent Obama from realizing the moment that history has handed to him. Americans are still seething at the bonus-grabbing titans of the bubble and at the public and private institutions that failed to police them. But rather than embrace a unifying vision that could ignite his presidency, Obama shies away from connecting the dots as forcefully and relentlessly as the facts and Americans’ anger demand.

BP’s recklessness is just the latest variation on a story we know by heart. The company’s heedless disregard of risk and lack of safeguards at Deepwater Horizon are all too reminiscent of the failures at Lehman Brothers, Citigroup and A.I.G., where the richly rewarded top executives often didn’t even understand the toxic financial products that would pollute and nearly topple the nation’s economy. BP’s reliance on bought-off politicians and lax, industry-captured regulators at the M.M.S. mirrors Wall Street’s cozy relationship with its indulgent overseers at the S.E.C., Federal Reserve and New York Fed — not to mention Massey Energy’s dependence on somnolent supervision from the Mine Safety and Health Administration.

This all adds up to a Teddy Roosevelt pivot-point for Obama, who shares many of that president’s moral and intellectual convictions. But Obama can’t embrace his inner T.R. as long as he’s too in thrall to the supposed wisdom of the nation’s meritocracy, too willing to settle for incremental pragmatism as a goal, and too inhibited by the fine points of Washington policy debates to embrace bold words and bold action. If he is to wield the big stick of reform against BP and the other powerful interests that have ripped us off, he will have to tell the big story with no holds barred.

That doesn’t require a temper tantrum. Nor does it require him to plug the damn hole, which he can’t do anyway. What he does have the power to fix is his presidency. Should he do so, and soon, he’ll still have a real chance to mend a broken country as well.

Op-Ed Columnist – Dont Get Mad, Mr. President. Get Even. – NYTimes.com.

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