WASHINGTON – The Obama administration's repeated low estimates of the huge BP oil spill undermined public confidence in the government's entire cleanup effort, leaders of a White House-appointed commission declared at an investigatory hearing Monday. One likened the mistakes to Custer's disastrous decisions at Little Big Horn.
Federal officials botched the government's response, a local official and government and university scientists contended as the commission focused on the questions of who was in charge and how much oil spewed out of the well into the Gulf of Mexico.
Eventually, U.S. officials said the spill was about 60 times bigger than originally estimated. Instead of 42,000 gallons a day, the volume of leaking oil was closer to 2.4 million gallons a day.
"It's a lot like Custer," said panel co-chairman Bob Graham, a former Florida senator and governor, referring to the battle that killed George Armstrong Custer and wiped out most of the Army's 7th Calvary in 1876. "He underestimated the number of Indians on the other side of the hill and paid the ultimate price."
And who was in charge? Billy Nungesser, president of Plaquemines Parish, one of the coastal areas most affected by the spill, referred to another famous leader, this one fictional.
"It became a joke," he told the commission. "The Houma command was the Wizard of Oz, some guy behind the curtain."
Mistakes in the information that was being given out sapped confidence in the government on the issue, Graham and co-chairman William Reilly said at a news conference. Reilly described "repeated wrong numbers" on the amount of oil that was spilling.
Retired Adm. Thad Allen, in charge of the government's response, told commissioners that the low estimates didn't hamper government efforts to deal with the spill. But Reilly, former chief of the U.S. Environmental Protection Agency, said he had trouble believing that, that it contradicted common sense.
A senior government scientist, Bill Lehr of the National Oceanic and Atmospheric Administration, said once NOAA realized the spill was much larger than estimated, things changed tremendously. Vacations were canceled, retirees were called in and oil response staff was "given a blank check," he said.
Florida State University's Ian MacDonald said it took eight attempts by the government to arrive at the correct estimate. He said BP's estimate of 210,000 gallons a day was about 100 times less than federal guidelines said it should have been based on the thickness and color of the oil.
"Five thousand barrels a day (210,000 gallons) was not in the right ballpark, and I think we could have done better," MacDonald said.
Allen acknowledged that the public and even political leaders were confused about who was in charge. He blamed a 20-year-old law that he said may need to be changed to allow a third party from the oil industry to coordinate cleanup.
By law, BP had a major role in responding and cleaning up — and paying for it. But it also remains responsible to its shareholders not to spend too much, Allen said. He proposed allowing a third party from industry that would not be beholden to the polluter's profit margins to run the cleanup.
Allen said the enormity of the response that was required, not a lack of money from BP, was the problem in the cleanup.
As for the future, Graham said the government should take a stronger role regulating oil wells in the Gulf.
"There is a tendency to forget the fact that this property out in the Gulf of Mexico where all this is happening belongs to all of us," he said. "We are the landlord. They are the lessees. And we need to start acting like a landlord."
That may be happening sooner rather than later. Bureau of Ocean Energy Management chief Michael Bromwich told the panel that he is one month ahead of schedule in issuing a report on whether a ban on deepwater oil drilling in the Gulf should be lifted. The report is due to Interior Secretary Ken Salazar in late October. Bromwich said two significant rules on safety inspections will come this week.
President Barack Obama imposed the drilling moratorium following the April 20 oil spill, the largest offshore in history. The ban is set to expire Nov. 30, but federal officials have indicated it could end early.
The moratorium has come under criticism by the oil industry and local residents for harming the Gulf economy. But a recent government report said it had not increased unemployment.
Bromwich said even when the drilling moratorium is lifted, it will take time for deepwater exploration to start up again because of a host of new requirements that will also be issued later this week.
"You are not going to see drilling going on the next day or next week," he said. "It is going to take some time."
Oil spill commission: http://www.oilspillcommission.gov/
NEW YORK (Reuters) – JPMorgan Chase and Co (JPM.N) has told federal regulators it may seek to recoup the money it used to buy the banking assets of Washington Mutual Inc (WAMUQ.PK), the Wall Street Journal reported on Monday, citing people familiar with the situation.
JPMorgan has sent letters to the Federal Deposit Insurance Corp (FDIC), warning it could seek more than $6 billion in legal protection from the regulator's receivership, the Journal reported.
The FDIC seized Washington Mutual in September 2008 and sold its assets to JPMorgan for about $1.9 billion.
Earlier this month, the court-appointed examiner investigating the collapse of Washington Mutual was given several more weeks to complete his probe, a move that could delay the company's exit from bankruptcy.
JP Morgan did not include specific dollar requests in its letters, but it submitted lawsuits related to Washington Mutual and expects the FDIC receiver to absorb any losses resulting from them, a person familiar with the matter told the Journal.
JPMorgan Chase spokesman Joseph Evangelisti declined to comment on Monday.
(Reporting by Maria Aspan; Editing by Valerie Lee)
WASHINGTON – Don't look for tax forms and instructions in your mailbox next year. The Internal Revenue Service has decided to stop mailing them because so many people now file electronically.
The Washington Post reports on its website Monday that the IRS expects to save about $10 million a year by eliminating mailing.
More than 96 million people filed their returns through the IRS online service last year, and about 20 million filed paper returns through paid tax preparers.
The IRS says only 11.5 million people who filed paper returns received forms in the mail.
The agency says people who want to file paper returns will be able to obtain the forms from the IRS website or its offices as well as some libraries and post offices.