Free Markets in Escrow: Obama to “Inform” BP to Pay Into Fund

James Gattuso / June 16, 2010

Today at 12:15, President Obama is scheduled to meet with a delegation from BP — including its CEO Tony Hayward — at the White House. The encounter should be tense. The stage was set for the meeting last night when the president, in no uncertain terms, told the nation that he would “inform” Hayward that he is to set aside funds to be put into escrow to compensate victims of the Gulf oil leak.

The statement no doubt made for good public relations, making it look like the president was doing all in his power to help victims of the disaster. There’s one little problem, however: the president has no power to force BP to create such a fund. Despite all the bluster, neither the president nor his advisors have coughed up a single line from any law giving the president power to demand that any money be put in escrow.

It wouldn’t be the first time, of course, that the Obama Administration has overlooked the niceties of legal authority. It did so blatantly last year, when it gave billions for an auto bailout that had been rejected by Congress (albeit following George Bush’s lead). And, given BP’s low public standing, and the president’s ability to pull regulatory strings, BP may find this to be an offer it cannot refuse. (more…)