Congressman says BP, Obama administration trying to reach settlement on oil spill fines

Congressman: BP, feds in talks over spill fines

NEW ORLEANS — A congressman says BP and the Obama administration are in talks about a possible settlement over fines for the company’s massive Gulf oil spill.

Louisiana Republican Rep. Steve Scalise told The Associated Press on Tuesday that members of his staff got information about the talks while working on oil spill-related legislation he is proposing.

Scalise says the goal of the talks between BP and the government is to reach a deal instead of having to fight it out in court.

He says the two sides appear to be at odds over whether BP should be considered grossly negligent for the spill, a finding that could mean higher fines.

There was no immediate comment from BP or the Justice Department.

An April 20 rig explosion in the Gulf killed 11 workers and led to 206 million gallons of oil spewing from BP’s undersea well.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

WASHINGTON (AP) — President Barack Obama’s point person on the Gulf coast’s restoration will recommend paying for it with some of the billions of dollars in civil penalties that could be collected from companies responsible for the oil spill.

That recommendation by Navy Secretary Ray Mabus will be in a report released Tuesday in New Orleans, a portion of which was obtained by The Associated Press.

A senior administration official, speaking on condition of anonymity because the announcement had not yet been made, said the White House has already endorsed the proposal and Obama will ask Congress to dedicate “a significant amount” to the region’s recovery.

“This is the dedicated money that kickstarts this thing,” the official said.

Even before the announcement had been made, state and local officials were saying how it should be spent and managed.

“My view is that it should be specific to the injury and the subject that we are dealing with,” said Sen. Mary Landrieu, a Louisiana Democrat, during testimony before the oil spill commission Obama set up to investigate the April 20 accident. She named coastal restoration, ocean education, energy infrastructure and levee protection as possible projects.

In an interview with The Associated Press late last month, Mabus said the money would need to be tied to projects at least connected to the oil spill.

“You got everybody wanting everything now,” he said. “And I don’t think that is going to change. But I do think that because this is as a result of the oil spill, I think there has gotta be at least a beginning nexus to that oil spill.”

Dedicating fines levied against BP PLC and other companies involved in the April 20 accident to restoration and directly to Gulf states, which the report also calls for, will require a change in law. Currently, Clean Water Act fines go into a trust fund to pay for oil spill cleanups.

But if successful, it would go a long way to solving what has been a critical problem in past efforts to restore the coast — money.

“Frankly, the spill becomes a silver lining. There are literally tens of billions available from BP,” said John Barry, president of the Southeast Louisiana Flood Protection Authority East, and a member of the state’s Coastal Restoration and Protection Authority. Barry was in Washington Tuesday to testify before the spill commission.

When asked if he was concerned whether Congress would act on the recommendation, especially after the Nov. 2 elections, Barry said he was optimistic.

“If we get support from the rest of the Gulf coast … then I think the gridlock of the Congress can be overcome,” Barry said. “The issue is time. There is real urgency. I hope it happens fast.”

The report intentionally does not say how much of the penalties should be used, leaving it to Congress.

Landrieu and other Louisiana lawmakers are pushing legislation that would require at least 80 percent of the civil and criminal penalties charged to BP, and possibly other companies, to be returned to the Gulf Coast.

That could end up being tens of billions of dollars. Maximum penalties under the Clean Water Act could be up to $1,100 per barrel of oil spilled. If BP is found to have committed gross negligence, those fines could rise to $4,300 per barrel. That means BP, along with other companies found responsible, could face total penalties of $5.4 billion to $21.1 billion under the law.

“We are not going to be fighting over pennies,” Landrieu said, after being asked Tuesday one of the oil spill commissioners how the money would be allocated. “There is no need to fight. That’s more money than this coast has seen in a long time.”

Landrieu said the money should be used not just for “restoring what we had, but building what we need,” something that she said had bipartisan support.

Mississippi Gov. Haley Barbour, a Republican, joined Landrieu before the panel Tuesday. He said that “anything that resulted from this oil spill should be the first priority” for the money.

He also was clear that he did not want bureaucrats in Washington deciding how it was spent.

“Washington, D.C. is not going to tell the Mississippi Gulf Coast how to rebuild the Mississippi Gulf Coast,” Barbour said. Obama has said repeatedly Gulf Coast residents should decide, and Mabus, a former Mississippi governor, has traveled throughout the region to gather information from local officials.

Obama is expected to sign an executive order soon to carry out another of the report’s recommendations, setting up a Gulf Coast Ecosystem Restoration Task Force, which would coordinate the money and help decide which project are funded until Congress sets up a council. Environmental Protection Agency administrator Lisa Jackson, a New Orleans native, will lead it.