Obama's Shameless BP Shakedown

GOP Rep. Joe Barton spoke the truth when he called the $20 billion agreement between the White House and BP a "shakedown," writes Reihan Salam.

06.19.10 9:55 AM ET

After taking a serious beating in the press for weeks over its handling of Deepwater Horizon, the Obama administration must be breathing a sigh of relief. In its desperate scramble to appear effective in combating the oil spill, the White House extracted extraordinary concessions from BP.

The most despised multinational working in the United States agreed to pay $20 billion over four years into a fund defined to benefit Gulf residents impacted by the spill. Some have characterized this as a shrewd decision on the part of BP CEO Tony Hayward to contain the damage to BP’s reputation. Yet BP has received no assurances on future legal liability and it remains, quite appropriately, on the hook for environmental damages. The Justice Department has already threatened to prosecute BP, and a refusal to play ball on BP’s part would almost certainly have led to an even more aggressive campaign of public vilification, at the very least.

To maintain an orderly society, we should at least try to contain and manage our desire for vengeance.

On closer inspection, this doesn’t look like much of a negotiation. Rather, it looks like what one would colloquially refer to as a “shakedown,” in which a stronger party, ignoring the conventions of a good-faith negotiation, all but forces a weaker party to bend to its will. But now that Rep. Joe Barton has, in fact, called the White House agreement a shakedown, he has, despite backtracking and apologizing, taken the political heat off of the president. Somewhere, Rahm Emanuel is smiling.

Shakedowns of this kind have a long and undistinguished history. And let’s acknowledge that they aren’t partisan, or even American, in nature. Republican presidents have engaged in similar tactics, like the so-called “voluntary restraint agreement” the Reagan administration reached with Japanese automobile exporters. During the westward expansion of the United States, the federal government “negotiated” with sovereign Indian nations in a similar spirit. European powers engaged in a truly extraordinary shakedown of China during the 19th century, forcing a then-vulnerable empire to accept the spread of opium and surrender treaty ports like Hong Kong. Resentment of the West lingers still.

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If President Bush were in power, my gut instinct is that he would have done something very similar, despite his ties to the oil and gas industry. The political returns would have been too great to resist.

The idea of “forward panic” can help us understand the appeal of shakedowns. In his brilliant book Violence: A Micro-Sociological Theory, sociologist Randall Collins explains that violence rarely breaks out between evenly matched opponents. An evenly matched opponent can do you harm, perhaps even fatal harm. It is far more common for violence to break out, depressingly enough, when a weak target begs for mercy. Anger, or what Collins calls confrontational tension, builds and builds. Precisely because a weak target can’t fight back, there is a tremendous sense of relief and release for the rioter or the prison guard or the abuser who starts to lay in to her or his victim (usually his).

It should go without saying that demanding money from BP is not quite like a playground full of schoolyard bullies kicking a kid when he’s down. For one thing, BP isn’t terribly sympathetic. But that’s precisely the point—the Muslims who were burned alive in Gujarat in 2002 weren’t sympathetic to those who victimized them either. And that’s why we’ve developed long, drawn-out legal processes: to create an orderly society, we at least try to contain and manage our desire for vengeance. Once BP agreed to the extraordinary terms of the deal—pay $20 billion, get a statement that President Obama doesn’t want BP to go bankrupt—it is easy to imagine White House staffers feeling a tremendous sense of satisfaction: the first “victory” after weeks of feeling helpless in the face of a terrible natural disaster, and indeed a terrible political disaster.

In Rep. Barton’s highly unusual statement, he came across as a strangely gentle figure. He sounded more like a pastor than like a politician, ruing man’s inhumanity to man, or rather man’s inhumanity to an enormous multinational oil corporation responsible for poisoning the Gulf of Mexico. It should go without saying that Barton’s statement reflected a profound lapse of political judgment, as evidenced by the extraordinary pressure he’s faced from the Republican leadership. And one wonders if Rep. Barton cares quite as much about other victims of government bullying as he does about BP CEO Tony Hayward: powerless prisoners and single mothers and others who can’t hope to buy fair or even-handed treatment. But there was something strangely humane about his statement all the same. It was a reminder that there are those who will speak out for even the most despised, if only in loose, off-the-cuff moments.

Reihan Salam is a policy advisor at e21 and a fellow at the New America Foundation.