GULF SPILL:

Perry, Cornyn cold to collecting Deepwater Horizon fines

It was a rare sight, indeed: Republicans and Democrats from the gridlocked Senate standing shoulder-to-shoulder at a July news conference to introduce bipartisan legislation.

The bill, hammered out in months of difficult, closed-door meetings, would accomplish what everyone present agreed was the right thing to do: capture 80 percent of the billions of dollars in Deepwater Horizon oil spill penalties to be collected by the federal government and send the money to the five Gulf of Mexico states of Florida, Alabama, Mississippi, Louisiana and Texas to pay for environmental and economic restoration efforts (E&ENews PM, July 21).

Of the 10 senators from Gulf Coast states, nine had signed on as sponsors of the bill. But one holdout remains -- and a powerful one at that: John Cornyn of Texas, chairman of the National Republican Senatorial Committee now in line to become the Senate's No. 2 Republican.

Cornyn may not be the only Lone Star State politician who opposes the bill (S. 1400), which won bipartisan approval in the Senate Environment and Public Works Committee on Wednesday and now heads to the floor for a vote.

Texas Gov. Rick Perry is also said to have problems with the measure, sources confirm, which the ultra-conservative GOP presidential contender intends to address if and when the bill passes the Senate and moves to the House. That may not happen, given Cornyn's intransigence, which some observers see as being connected to Perry's.

Why Perry has reservations about the bill, which could send more than $1 billion to Texas, remains a mystery. Despite repeated requests, a Perry spokeswoman declined to elaborate.

"Our office is reviewing this bill," Perry deputy press secretary Lucy Nashed said in an email.

Cornyn, who had been silent on the spill penalty-sharing bill, said in an interview yesterday he wanted to ensure that the 80 percent of the Clean Water Act fines -- estimated to add up to between $5.4 billion to $21.1 billion, given the size of the spill -- would be distributed based on the economic impacts to the various Gulf states and that the allocation was "appropriate."

"It's true that Texas wasn't as directly impacted by the oil spill, but the economic impacts have been pretty dramatic," Cornyn said. "And I just want to make sure that we have the right information, so that we can make sure that the allocation is appropriate."

"I'm reserving judgment until we can get that analysis done," he said. "And I'm requesting that from my staff, and I haven't seen that yet."

Other Gulf state governors have not been so quiet on the matter. In June, for example, Mississippi Gov. Haley Barbour (R) pressed his case to the House Oversight and Government Reform Committee that Gulf states that were affected economically -- by a loss of tourism, for example -- should receive as significant a portion of the fines as those that suffered environmental damage, so that the economic wounds could heal (Greenwire, June 2).

Cal Jillson, professor of political science at Southern Methodist University in Dallas, said Cornyn's and Perry's opposition could be a negotiating tactic designed to secure a bigger share of the billion-dollar pie for Texas. But he also said the position could be another example of the strident anti-Washington, pro-business-at-all-costs attitude that infuses Texas politics.

Jillson said that attitude was on display when Perry turned down federal stimulus money for unemployment and education programs because of the strings attached and when Texas Rep. Joe Barton (R) infamously apologized to BP PLC officials last year for what he called a "shakedown" by the Obama administration (Greenwire, June 17).

"There is a current in Texas politics that you heard initially form Joe Barton in the House when he apologized to the oil companies for their treatment," Jillson said, "a small government, deregulatory, federal-extortion-of-these-fine-businesses line that occasionally ripples to the surface of Texas politics."

"And so the second possibility is that we reject the idea of extorting money from these companies and if the money does come back, we want to make sure it comes back free of any strings to Texas," Jillson said.

Cornyn does not buck the current Jillson describes. Cornyn came to Barton's defense for the BP apology, telling Talking Points Memo that same day that he "shared the concern" Barton raised over President Obama's demand that BP put $20 billion in escrow to cover environmental and economic damages resulting from the then-ongoing spill.

"I think it's comforting to know that there will be resources set aside and available to pay for legitimate claim," Cornyn said. "But the part that Representative Barton is expressing some concern about, that I share the concern, is this has really become a political issue for the president and he's trying to deal with it by showing how tough he's being against BP. The problem is BP's the only one who really is in control of shutting down this well, and he's trying to mitigate, I think, his own political problems."

Although she signed on as a sponsor of the BP penalty bill, Texas Sen. Kay Bailey Hutchison (R) has also refrained from issuing public statements on it. In an interview yesterday, Hutchison, who lost the GOP gubernatorial primary to Perry in 2010 and plans to retire next year, called it "fair."

"It wasn't so much environmental concerns on our shores," Hutchison said. "It was the loss of jobs and the economic impact. So I think that it was a fair allocation for Texas and I hope that it goes toward rebuilding those jobs."

Cost could be key to bill's fate

There are other concerns about the legislation outside of the Gulf state caucus that negotiated its terms.

Chief among those is cost, which has yet to be determined. The Congressional Budget Office is expected to weigh in with an estimate based on an 80 percent of what the Department of Justice is likely to negotiate in a settlement with the companies responsible for the spill.

A multibillion-dollar price tag would undoubtedly be a drag on the bill, even though backers of the legislation say they plan to come up with spending cuts to offset the price. Without a bill diverting the fines to the Gulf states, the money would flow to the federal Treasury.

Senate Environment and Public Works Committee ranking member James Inhofe (R-Okla.) raised two concerns before voting against the bill in committee. He said language requested by Sen. Sheldon Whitehouse (D-R.I.) that uses a tiny fraction of the money to fund a national oceans research endowment should not be included and that he did not support "the idea of using environmental fines as a revenue stream."

Sen. Tom Udall (D-N.M.) echoed Inhofe's concerns shortly after casting a vote in favor of it. "Should all states be entitled to fines for environmental accidents that occur near their borders?" Udall asked. "I think some of the precedents here worry me a lot, and I hope we answer those questions."

He later asked: "What was the damage of the BP oil spill for the state of Texas?"

Asked the same question after the committee vote, Sen. Mary Landrieu (D-La.), the chief sponsor of the penalty legislation, said that even though oil did not hit its shores, Texas, like the other four states, "is on the front line" of the Gulf, where "99.9 percent" of offshore drilling takes place.

"And while Texas does the drilling but didn't get harmed, they could be harmed any day," Landrieu said. "And so we want to be strong in the Gulf Coast and speak as one coast. We don't want to divide ourselves. We want to speak in a united way, and we think that makes perfect sense."

Sen. Jeff Sessions (R-Ala.), who voted for the bill in committee, said yesterday he hoped Cornyn would come around.

"One thing [Cornyn] wants to be sure that Texas gets their fair share, and sometimes Texas has an expansive view of what their fair share is," Sessions said. "But we've negotiated hard on that. But there are just some little things that you could complain about the bill too. There's some questions that have been raised. But I'm hoping that he'll be on board as we go along."

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