association. and i know there's something else that goes with that name. he knows first hand the effect that the oil spill is having on fishermen who depend upon the waters for their very suss stenn nance. he's here today and i thank you him for his participation in the hearing. i'm sure the committee will benefit from his stories. . . sure thisl his story. fishermen have depended upon this season to be their opportunity to finally recover from past harm, but this is not going to be the case. the oyster sean was supposed to open up on may 1st and some fishermen prepared their boats to have them ready to go out for the first two or three days. they planned to bring their first haul of the season and p bills but, of course, that did not happen. the national oceanic and atmospheric administration that is noaa has already closed over 54,096 square miles of the gulf of mexico to commercial and

recreational fishing in order to ensure that seafood will remain safe for consumers. that is slightly more than 22% of the federal waters in the waters of the gulf of mexico. a closure of this size is bound to have devastating impact on the fisheries in the gulf where commercial fishermen harvested more than 1 billion pounds of fish and shellfish in 2008. on monday, secretary of commerce gary locke determined that there had been a fishery disaster in the gulf of mexico due to the economic impact on commercial and recreation fisheries. the affected area includes the states of louisiana, mississippi and alabama. this determination allows the federal government to provide assistance to affected fishermen and local communities under the magazi magnason conservation act. the administration requested 15 million in supplemental

appropriations under the magnason-stevens act while emphasizing these funds will onlye used as a last resort. >> gentlemen lady's time has expired. >> i thank you very much and i am anxious to hear the people would are here to provide us with the information. thank you. i yield back. >> hank johnson. >> thank you, mr. chairman. for holding this important issue on the legal liability hearing on the gulf coast oil disaster. first and foremost i want to express my condolences. the april 20th fire and explosion that occurred on the deepwater horizon oil rig in the gulf of mexico resulted in the loss of 11 lives. many more people were injured. my deepest sympathy goes out to the family, friends and co-workers of the 11 individuals who lost their lives on that

day. this explosion and fire ourred on the deepwater horizon drilling rig that bp was leasing to drill an exploratory well in the gulf of mexico. transocean, the world's largest offshore drilling company, owned and operated the rig. in the aftermath of the explosion, the rig capsized and sank to the ocean floor resulting in oil leaks. millions of gallons of oil have spilled into the gulf since this tragedy occurred. what disturbs me most about this spill is that it could have been prevented. recent reports are stating that bp missed several warning signs that led to the blowout and fire on the deepwater oil rig. this is unacceptable for a company where the first quarter earnings for this year alo were $6.1 billion. as a result, lives were lost,

and the ecosystem and economy are at great, grave risk. the livelihoods of workers and families in the small businesses that rely on the gulf remain in question. the family, friends and co-workers of the 11 people would lost their lives want answers and they feed to be treated fairly. this committee wants answers. this hearing will give us the opportunity to examine the liability issues stemming from the april 20th explosion. it will give us the opportunity to discuss how congress could amend current laws such as the death on the high seas act and oil pollution act to ensure that they are adequate and allow for punitive damages a nonpecuniary damages. in this current disaster, bp is subject to a liability cap

of $75 million under the oil pollution act. although bp has stated thatt will disregard the cap and pay a all, quote, legitimate claims, end quote, questions remain about who wl determine the legitimacy of the claim and how those claims will be assessed and resolved. i'm eager to hear from the witnesses about their thoughts on the current liability laws and what could be done to improve them. most important, i'm anxious t learn about what congress can do to ensure that this does not haen again. i thank the chaman for holding this hearing and i yield back the balance of my time. >> mr. delahunt. >> thank you, mr. chairman. i'll be very brief. first my condolences to the father of the young man that was lost. i think that's very important to

say, to articulate and please understand that it is heart felt. i guess before we approach the issue of should the cap be removed altogether, should it be recalculated, i think it's important for this committee to examine where the $75 million figure came from initially. i heard the gentlemen lady from texas describe that $75 million figure as absurd. i think that was her word. i concur and agree. how did that ever happen? it clearly wasn't in this session of congress? it was in the aftermath of the "exxon valdez" but what we

learned from that particular disaster was the cost far exceeded 75 million. i wonder why there should be a cap at all and i think that's the question that we should pose to ourselves and to this panel. in terms of the issue of punitive damages, there's going to be a series of hearings, multiple committees to examine how this happened and why, what was the failure, you know, in the criminal law we have the concept of deterrence, and i think it ought to be implicated in terms of disasters such as this that are clearly the result of failure somewhere along the

line, and i dare say, mr. chairman, if punive damage was implicated into the equation of assessing the responsible parties, it would make a difference. it would make a serious difference because any ceo, any corporate board, any management would be fully aware of the potential liability. so i think that's an important consideration. and i'll conclude my remarks there and thank the chair for calling this hearing, but i think those two questions that i just posed are important to -- for us in our deliberations to examinand i yield back. >> thank you. we welme warmly all the

witness witnesses. mike quigley. >> thank you, mr. chairman. i recognize that we're -- we've got a long panel so i'll just submit my statement for the record but i just very briefly, i know we're talking about oil today, but in the end the larger picture is the cost of carbon. the cost of exploration, the cost of using fossil fuels. i mean, today it's oil. but we could also be talking about blowing the tops off of mountains, polluting streams for all time, making moon scapes out of whole tracts of land out west in areas like wyoming and we need to recognize it's part of a larger picture that can only be solved by con surveying and by promoting and supporting renewable energy and that, frankly, we sometimes don't like to hear this, but you can't have everything you want. there is a cost to driving the biggest car you can buy 80 miles

an hour. we have to recognize that as americans and have to recognize that conservation is the beginning of this and renewable energy is the end. thank you. >> we welcome all witnesses. mr. tom galligan, mr. vincent foley, mr. william lemmer, mr. james ferguson, miss rachel clingman, mr. daryl willis, the attorney general of the state of mississippi, jim hood, mr. byron encalade, mr. stephen stone, mr. douglas harold brown and our first witness is keith jones, e father of gordo jones, who died aboard the deepwater

horizon on april 20th, 2010. mr. jones is a louisiana native, a practicing trial lawyer for over three decades born in shrevepo shreveport. he was raised -- his family practice and is joined by his son christopher k. jones who is here today. would you stand up, sir? thank you very much. and who has worked with his father in preparation for this testimony today and has made himself available to the committee for any questions that members may have. we have all statements that will be entered into the record and

we invit you to begin our testimony, mr. jones. >> chairman conyers, ranking member smith and other members of the committee -- >> push the button. >> sorry. >> now? >> a little closer. >> forgive me. chairman conyers, ranking member smith and other members of the committee, it is an honor to be allowed to speak with you today. my name is keith jones. i'm a lawyer from baton rouge, louisiana. seated behind me is my her son chris who is also a lawyer in baton rouge. chris and i appear before you today however not as aorneys but as the father and brother of gordon jones, who was killed above the transocean deepwater

horizon. we're here for gordon's wife michelle, for his sons stafford and maxwell gordon, for his mother missy, for his sister katie. at the outset i want you to know that just because i am here and addressing you today does not mean that i believe that gordon's death was more tragic or more important than the deaths of the other 10 men that day. i know their families grieve just as much as we do. but the only one of the victims i knew was gordon. he was 28. hour youngest child. he is survived by his widow michelle and two sons, stafford who is 2 and maxwell gordon who was born 13 days ago. gordon was a mud engineer for m.i. swatco would had a contract with bp to provide that service. he searched his bachelor of arts from lsu and then completed

something called mud school. after spendg some time oob serving the work of those more experienced gordon began working as a mud engineer. as a relatively newcomer he was sent to a different rig every two weeks including the transocean deepwater horizon. gordon was good at what he did, it was evidenced by the fact that one of the mud engineers from the deepwater horizon left, bp was offered a list of mud engineers who had worked aboard the horizon and from that list chose gordon. as you know by now the deepwater horizon was a rig of considerable prestige, very large rig that drilled in very deep water and found very large deposits of oil. gordon was proud that he had been so successful so soon in his career it allowed his wife michelle to quit her job last year with one young son, another on the way, michelle wanted to be a full-time mom.

gordon was chosen from that list not only for his skills as a mud engineer, but also for his personality. everybody liked gordon. people who met him liked him and the more they got to know him, the more they liked about him. gordon was funny. he lovedo laugh. he loved even more to make others laugh. to have a friend like gordon was a special gift. to lose a friend like gordon was and always will be a bitter loss. goon even had the ability to make jokes at the expense of others, often me, and they would never get mad at him for it. it was a gift he had. and gordon was a gift we had. we had a visitation at the oldest funeral home in baton rouge theay before gordon's

memorial. the line of people who came snaked through the funeral home out the front door and down government street. the funeral director said he had never seen anything like it. imagine and that for a man who had been with us for 28 years. first picture i'd like to show you is my favorite. taken only a few days before gordon's death and i was standing right behind michelle when she took it gordon was giving stafford his first golf lesson it was, of course, the last golf lesson he'll get from his dad. i vividly remember driving away from that scene thinking they are so happy. the next picture is of gordon

holding stafford soon after stafford's birth. i've had the pleasure of being with all three of my children when their first children came to the world but i can't say i ever saw a prouder parent than gordon. you'd have thought he was the first man ever to father a ild. next picture is of michelle stafford and maxwell gordon 13 days ago. we're happy and grateful that mother and child are healthy. they're home where together they'll all have to learn how to live without gordon. the last picture depicts gordon's presence in the delivery room. limited only to his picte. gordon was a great father to stafford. he was tireless. any time stafford wanted to play, gordon was ready.

perhaps the saddest story about gordon's death and there are many is that stafford is just too young to be able to remember anything about his dad in the years to come. of course, maxwell gordon will never have been able to know his father. his knowledge of his dad will be limited to pictures and things that michelle and friends tell him. we don't have to be psychologists to know that's not enough. we know that gordon's by was cremated. then the fireboats washed his ashes out to sea. i admit that having nothing to say good-bye to is much, much harder than i thought it would be. call it closure or whatever something is missing for us. you may note that i haven't

mentioned how much money gordon made. there's a reason for that. the loss of gordon's income is the last thing michelle grieves for. when michelle tells her boys about their dad she's not going to show them a pay stub, but as i understand the present state of the law, that's all michelle and stafford can recover from those responsible for gordon's death. we fear that because maxwell gordon was born after april 20th, 2010 the defendants will argue that he is entitled to nothing. please believe me, no amount of money will ever compensate us for gordon's loss. we know that. but payment of damages by wrongdoers is the only meanse have in this country to make

things right. as time goes by we learn more and more about whose fault it was that this blowout took our gordon whose fault it was that the accident happened and whoever ultimately bears the blame for that will have to pay money to compensate the families of these 11 dead workers. how much that will be is up to you. but reckless acts by employees of corporations performed to try to make the most money the fastest will never be deterred by the payment of mere compensatory damages. payment of punitive damages by irresponsible wrongdoers is the only way they may learn. these businesses are there to make mone punishing them by making them

pay some of that money to victims w suffer most is the only way to get their attention. if you want these companies, one of which is headquartered in great britain and another in switzerland, to make every effort to make sure their employees don't ago as these did, putting american lives at risk, you must make certain they are exposed to pain in the only place they can feel it, their bank accounts. as a friend recently said, make them hurt where their heart would be if they had a heart. i am an environmentalist. i worry about the louisiana wetlapds, the florida beach, all of our precious lands endangered by this oil spill, but i do hope and believe this, after much work perhaps for years, this

mess will be cleaned up. the wrongdoers here can pay enough money to those who have lost their ability to earn a ling to make that right and eventually the shrimp will be back, the oysters and crabs a fish will be back and bp will be back. we have heard over and over that the value of bp's stock has fallen, but bp is selling for about the same price it was a year ago today, so bp, transocean, halliburton and any other company will be back because they have the infrastructure and economic might to make more money, but gordon will never be back, never. and neither will any of the 10

gooden who died with him. now, the future of those families is in your hands. i urge you to do the right thing. thank you very much for listening. chris and i will be happy to answer any questions you may have. >> douglas harold brown was chief mechanic and acting second engineer on transocean's deepwater horizon and is a survivor of the april 20 explosi explosion. he served in the u.s. army for more than 11 years, began work with,b. falcon, an offshore oil drilling company that was bought by transocean a he became a transocean employee and one of the original crew members of the

deepwater horizon. >> chairman conyers, ranking member smith and members of the committee, thank you for inviting me to appear before you today. my name is douglas harold brown. i was a chief mechanic and acting second engineer on the transocean deepwater horizon. i am 50 years old, married have a 10-year-old stepdaughter and live in vancouver, washington. i saw the original one from korea to new mexico and have worked on board a the vessel until she exploded at 10 p.m. on april 20th, 2010. since 2004 i worked in the engine control room. here's what happened to me that night. shortly before 10 p.m. i was completingly shift and making my log entries in the control room when we heard a loud hissing noise followed by gas alarms

going off. this was followed by the sound of engines ramping up very loudly. these enges provide power to the entire rig and are equipped with an electric and mechanical trip. they are supposed t automatically shut the engines down if they exceed certain rpms. as the engines revved louder and louder i kept expecting the trips to shut the engines down but they pfeffer did. they just kept revving higher and higher. the one automatic trip that did work disconnected the generators from the control panel and plunged us into total darkness. but the engines kept revving. nobody ever radioed control room to inform us there was a kickback or that mud and seawater was shooting into the air. i was standing in front of the engine control panel waiting for the system to power back up when the first explosion blew me into the control panel and into a hole that was created in the oor. a short te later, a second explosion threw me to the floor again. the ceiling caved in and debris

fell on top of me. i could hear people screaming calling out for help. and i was terrified. i did n kno what was happening and feare i was going to die. i followed two of my co-workers and crawled out of the hatch in the back of the room which had been blown open by the blast. when i got to the pain deck i saw the fire on the floor shooting up through the derek. thheat coming from the flames was like nothing i've ever felt. mi williams, the electrical technician and i made our way around the fire to the bridge. and when we got to the bridge the captain sent us to the lifeboats to find the medic because mike was bleeding badly from his head. when we got to the lifeboats, there was complete chaos and mayhem. people were screaming and crying that they did not want to die and that we had to get off the rig. we stoodext to the lifeboats and watched as the fire grew larger and larger. i think we were only there for about ten minutes, it seemed li forever.

eventually we were ordered to board the lifeboats and we were lowered to the water. we tied up to the bank spin which was a supply boat taking on drilling fluid from the rig before the explosion. we were offloaded onto the bankton and i was taken by helicopter to another rig and eventually to a hospital in alabama. i feel very fortunate to have survived this horrible tragedy. 11 of my fellow crew members were not so fortunate and my heart goes out to their families and loved ones. i do not yet know the full extent of my injuries. i've been diagnosed with a fracture of my left leg and damage and bruising under my kneecap as well as ligament mage and nerve bruising. i have pain in my back and tailbone. i still walk with a cane. i am also having problems with my short-term memory, loss of fine motor skills, trouble sleeping, nightmares and flashbacks to that night. i have been diagnosed with ptsd.

i will never forget that night, though, the loss of my friends and the effect this has had on so many people. it is important for congress to understand what happened that day so it doesn't happen again. i think it is also important to understand how transocean manning decisions changed over time. when we first went to work on the deepwater horizon, we had a fully manned engine room which consisted of six people, chief engine, first engineer, second engineer, third engineer and two motor men. as the years went by, for reasons i do not understand the flagging of the vessel changed from panama to the marshall islands and transocean eliminated positions so we were left with only three ople, a chief engineer, second engineer and one motor man. three people are left to do six people's jobs. while this often made it difficult to timely complete our daily preventive maintenance we

worked hard and did the best we could. in october 2009, they reinstated a first engineer back in the engine room. that still left us two people short compared to when the vessel was flagged under panamanian law. over the years, after transocean began lessening the crew, i and others complained that we needed more help. they just kept telling us they would see what they could do. i wish to thank you for giving me the opportunity to ttify before you today and i am happy to answer any questions i can for you. >> stephen stone was working for transocean aboard the deepwater horizon and was injured in the april 20th, 2010 explosion. >> thank you. chairman conyers, ranking member smith and members of the house judiciary committee, thank you for the opportunity to speak with you today. my name is steven lane stone.

i worked for transocean since february of 2008 as a rouseabout which is a general labor on an oil rig. i was on board transocean's deepwater horizon rig on the night it exploded killing 11 of my crew members and injuring many more. i'm here today to tell my story not only about the disaster of april 20th, 2010 but also about the events that led to that disaster. it is my hope that armed with this information, this committee and this count can prevent another tragedy like this one from ever happening again. like many people i have been following the congressional testimony of the executives from transocean, bp and halliburton. and have watched their finger-pointing blaming each other for the blowout of the well. when the companies put their savings over our safety they gambled with their lives a gambled with my life and the lives of 11 of my crew members. the blowout o this well was hardly the first thing to go wrong. i was working up on deck helping

to pump drilling fluid down into the wellbore hole however we kept losing drilling mud either because of the underground forpace was unstable or because drilling too quickly caused the formation to crack. either way about four separate times in the space of 20 days we had to stop pumping drilling mud and pump down a sealant to seal the cracks of the formation causg us to lose mud. on the night of april 20h, 2010 i was asleep in my cabin two decks below the surface kick of the deepwater horizon about see what was happening. another explosion went off. the force of it ripped through my body and collapsed the upper decks of the rig. up and down the halls screaming i ran through the door of my the lifeboat deck but it had collapsed. i ran back to my room to get my life jacket, my shoes and wedding ring. i thenollowed my crane operator eugene moss who was

running another way to the other end of the living quarters and using other stairwells. once on that deck, o deck below the surface we ran through more living quarters to get to the life boat deck and the ceiling below had collapsed by the galley. the air was smoky and gritty with debris. eugene a picked our way through the rubble to the deck outside. once we were outside iurned and looked at the derrick which was completely engulfed in flames so brit it seemed like daylight and remember seeing people staring at the flames, someone was trying to muster which means to get everyone assembled and get a head count. some people were getting in the lifeboats and some were in shock they jt stood there unable to move. suddenly the flames and the derek intensified. that was when people started to panic and scramble for the lifeboats. i got in the life boat number two, strapped myself in and waited for what seemed like hours. some people were getting back out of the life boat and another person was still trying to muster and get a head count.

i was pretty certain i was going to die so i just sat there and waited for something to happen. for the derek to fall down and take the life boat down. finally as the life boat filled up with smoke someone made the call to lower our boat into the water. we unlamped from the rigs cabled and motored toward the bankston. the medic tended to the injured until the coast guard arrived about 30 minutes later. the coast guard retrieved injured from the boat by helicopter, which took them about two hours until about 12:30 a.m. at 8 a.m. the damon b. bankton was released to start heading back to land. four hours later and 14 hours later we pulled up to a flat form of coast guard investigators at about noon on april 21st. we were told we had to give a written statement before we could leave the boat. after that was done we pulled up to another platform to pick up paramedics to ride back to lanze with us. at 1:30 a.m., 28 hours after the explosion we finally made it back to land. however, before we were allowed to leave we were lined up and made to take a drug test.

it was only then 28 hours after the explosion that i was given access to a phone and was allowed to call my wife and tell her i was okay. at last they arranged to have us all driven to the crowne plaza hotel in new orleans where our families were waiting. another three hours later we made it to the hotel and to our families. 31 hours after the explosion at 5 a.m. on april 22nd i was given a hotel room and allowed to rest. i was lucky enough not to suffer any injury that required paramedic treaent but to say that i was not injured isn't true. i breathed in lots of thick dark smoke from the fire, and the explosion and will need to see a doctor for smoke inhalation. like many other crew members i am suffering from ptsd and have had trouble sleeping, flash backs to the explosion. since the explosion i have also developed a nervous twitch in my eye and my doctor said this was probably caused by stress too. the transocean representative asked me to sign a documen stating i was not injured in order to get 5,000 for the loss of my personal possessions in

general. this happened ten days after the explosion and in a denny's restaurant without my lawyer present. i wouldn't sign the part saying i had suffer nod injury. my attorney handled the 2005 vp refinery explosion in texas. i was sad to learn after the fact about bp's shockingly bad safety record in north america. also i never would have expected from my company transocean to treat me like a criminal after i had survived such a disaster by making me submit to a drug test and then try to tempt to trick me into giving up legal rights by signing forms without a lawyer present. if i had known any of these things, i might have thought twice before setting foot on the deepwater horizon. members of the comttee you cannot allow bp and transocean to continue to conduct business this way. i hope that my testimony here today leads to changeshat may drilling rigs safer so this never happens again. thank you. >> byron encalade is the president of louisiana oysters association.

he has a business at east point and has fished for his entire life in the gulf of mexico. >> mr. chairman and other representatives of the committee, i want to thank you for giving me the opportunity to tell our story. my name is byron encalade. i'm a third generation oyster fishermen. from east point, louisiana, i currently serve as the president of plaquemine parish united fisheries cooperative of the louisiana oystermen's association. it is a small fishing village in plaquemines marrish with approximately 300 people. it is primarily an african-american community with seafoo being its primary

industry. our family fisheries engage in harvesting oysters and shrimp whh we transport across gulf states. as the president of our family fisheries and trucking company, i employ eight people, my brother, my two nephews and five cousins. black oyster fishermen have not been able tomass wealth to sustain our community. therefore, occurrences such as rricane katrina and the oil spill have caused us stress and uncertainty for our already underserved community. we thought 2010 was the year to finally recer from hurricane katrina. we have invested moneys in our boats and company infrastructure. this oil spill would be devastating for plaquemine parish, but it will be extremely

difficult these next few months for fishermen who depend on this livelihood as a source of income and food source. once again we find ourselves crippled by disaster we did not create and as -- in the aftermath of 2005 hurricane season, it has been said that the total cleanup and recovery will take months if not years to complete. on the eve of 2010 hurricane season, whichay only make this problem worse, i can tell you we do not have that kind of time. we need your help. we need congressional oversight on the funds distributed by bp and the federal government. we in louisiana have learned hard lessons about the need for transparency and recovery and call upon this committee to

closely monitor the recovery activities. louisiana is a provider of shrimp, oysters and crabs, crawfish in the united states providing about a third of the seafood consumed in our nation and also approximately a 2.4 billion a year to the state economy. our request is as follows, the federal government to ensure immediate compensation as paid to the fishermen to provide for income replacement and family living expense, the lack of federal and state income returns must not preclude any fishermen from receiving compsation. the claims compensation protocol must include a system of classificati of claimants. immediate compensation for six

months of lost income, that is equivalent at least an annual income of $24,000 per year. fishermen who can substantiate high annual income from fishing will receive higher payments and at the end of six months -- somewhere during the period of november, time period of november is some equal to one-half of a year lost earnings and a lost then $12,000 per worker shall be paid to every fishermen remaining out of work as a result of this disaster. within 12 months of the initial payment, the federal government must make a final assessment of full damages for the lost earnings toe made to fishermen. this determination should include evaluation of other long-term losses beyond losses of earnings such as damage to boats, equipment, damage to

other oysterbeds and fishing grounds and other long-term losses. mr. chairman, i'd like to thank you and have a profound thanks to miss waters, if i can, and the fishermen, of course, you know, are really pleased that she came down and opened our heart and extended the welcome to us up here a you have been very, very kind to us including the fishing community and we thank you from the bottom of our heart. anybody have any questions, i'll be glad to answer. >> we're pleased to have the attorney general of the state of mississippi, jim hood here.

the attorney general graduated from the university of mississippi, served as a clerk with the supreme court of that sta state, an assistant attorney general for five years, district attorney for eight years, tried numerous cases and prosecuted the successfully the 1964 murders o three civil rights workers. we welcome you to our hearing today. >> thank you, mr. chairman. thank you for that kind introduction and members of the committee, i won't go through what we have accomplished as attorneys general, our five coastal attorneys general have been working with british petroleum. i have a letter attached as appendix c in which we made several demands.

bp has come forward on most of them, however, tre's one that creates a problem for the states andhat's why i ask that this committee consider amending some federal legislation to allow our states to recover the full amount of our damages. we are still working with bp in hopes that they will waive the right to try toemove our state court actions to federal court. they will not agree to that thus far. the difference between the "exxon valdez"ase going on over 20 years and the tobacco litigation which was filed by my predecessor mike moore as attorney general from the state of mississippi i was asince a.g. when the tobacco wars were started and ended, and i am familiar with that litigation and the reason, you know why it was settled because it was in state court. the tobacco industry was about to have to walk into a courtroom down on our coast in pascagoula, mississippi. that case was settled because we were in state court.

the "exxon valdez" case went on 20 years because they were in federal court. as a result of some of the tobacco litigation, there were amendments made here in congress that have allowed corporations to draw in states and to multidistrict -- to state litigation and that is a problem for the states, you see, even though you may have put good language in osha, for example, that says there can be a concurrent state action and the state actions will be recognized, well, that doesn't mean a federal judge is going to follow what you said. and, in fact, a federal judge in the state of louisiana has said that under opa, that your case can be removed from state court to federal court. and the problem with tt is is that my colleagues here at the table, british petroleum and transocean have already started a sucking sound coming out of

hoton, texas, by two action that is they filed before friendly federal judges in houston, texas. one of those was filed by transocean, a limiting action in which they tried to pull in everybody to a judge in houston, texas. bp has done the same thing with a consolidation action and the problem for the states is is we don't need to be pulled into some type of a huge class action where we're just treated like another plaintiff out there and there's no respect for separate sovereign. in fact, i won't be able to plead in our state litigation if it occurs, hopefully these company also come forward and ying every way to work with them and they work with us but if there is going to be a fight, i want it to be in our state court. we're not going to recover a dime more than we're entitled. we don't want a dime more than we're entitled in state court but what happens in federal courts these federal judges get huge mass action and all their duty is to beat people into submission and that includes states and people don't recover

what they're entitled to. i won't be able to plead a claim under opa because i know what's going to happen. they'll take that federal district judge's case out of louisiana and try to suc mississippi into federal district litigation. that happened in the insurance litigation. full's recall after katrina i was the attorney general that filed a suit against most of the insurance industry. that's what they did. they drug us off into federal court on a motion to remove and it sat there and lingered in federal court for 15 months, finally it was remanded back to state court. we reached a settlement in the insurance industry but carried forth that issue to our state supreme court to make a decision on when versus water liability. well, it took four years to get to a state supreme court. everybody settled. it was a hollow victory. i won 9-0 but what happened the 5th circuit didn't defer a it should have under -- it's a contract law. it's a state issue. the 5th circuit didn't defer to the court and they got it all wrong.

too late to back up so we don't want to wind up before federal court where they're going to drag us in with another group and treat us like any other plaintiff. secondly, the class action fairness act was passed by congress and in that on all the comments from the senators on the floor, all over the states won't be included this this. the states won't be sucked into a state claz action fairness act. guess what, a 5th circuit -- actually a district judge in louisiana said, yes, the states belong into in caldwell v. allstate, the court, 5th circuit held that, yes, the states are subject to cafa, the classic action fairness act where we get jerked into all this multidistrict litigation, and it creates such a problem that the states are beaten into submission. the federal judge in the alaska case beat -- there was a state court judge making parallel rulings at the time just ignored the state completely. didn't even accept the separate sovereign, beat those fishermen and plaintiffs into submission

and i suspect the state and federal government, as well. i do not want to see that happen and therefore i have submitted to this committee several changes that i believe will allow the states to seek our damages in state court and protect our citizens. lastly, the parents patriot authority of an attorney is as one recognized by united states supreme court as a supreme duty of an attorney general. if means protecthose who cannot protect themselves. it is a latin term for that. what that -- i will not be able to plead parents patriii claims. the reaso for that because of that caldwell case, the 5th circuit will say you're just a massaction, you're bringing that on behalf your citizens and try to drag us into federal court. that's not where we want to be. we want it made in state court so we can quickly resolve our issues if there are any and we will not be subject to a lot of

the othe problems that the limitations of liability act can bring states in for. thank you for the opportunity for being here. i'll be glad to try to answer any questions afterwards. >> daryl willis, vice president of resources at bp. on april 29th, 2010 he accepted the role of overseeing bp's claims process, born in louisia louisiana, undergraduate northwestern state university in louisia louisiana, master's degree in geology and geophysics in louisiana state university, mba from stanford university anduni. and he has been with bp since

1996 when he started as the lead operations geoscientist for bp north american gas. >> chairman conyers, ranking member smith, members of the committee, i'm daryl willis, vice president of resources for bp america. on april 29, 2010, i send the role of overseeing bp's claims process, which was established in the wake of explosion and fire aboard the "deepwater horizon" drilling rig and ensuing oil spill. i'm here to share information with you about the claims process. this horrendous incident, which killed 11 workers and injured 17 others, has profoundly touched all of us. there's been tremendous shock that such an accident could have happened and great sorrow for

the lives lost and the injure aries sustained. i would like to make one thing very clear. bp will not rest until the well is under control and we discover what happened and why and in order to ensure that it never ppens again. as a responsible party under the oil pollution act of 1990, we will carry out our obligations to mitigate the environmental and economic impact of this incident. i would also like to underscore that -- by the federal government and by bp itself, so i'm prepared today to answer your questions regarding the claims process. i cannot, however, respond to inquiries about the incident itself or the investigation. above all, i want to emphasize

that the bp claims process is integral to our commitment to do the right thing. we will be fair and expeditious in responding to claims. we have already paid out more than 35 -- $37 million in claims. we understand how important it is to get this right, for the residents and businesses, as well as for the state and local governments. to that end, we have established 24 walk-in claims offices operating in louisiana, mississippi, alabama and florida. and we have a call center that is operated 24 hours a day, seven days a week. we have also established an online claimsiling system to further expand and expedite our capacity to respond to potential claimants. all together, we have nearly 700

people handling claims with over 400 experienced claims adjusters on the ground, working in the impacted communities. we will continue having offices and resources required and committing the full resources of bp to making this process work for the people across the gulf coast. our folk cass is on individuals and small businesses whose livelihoods have been directly impacted by the spill and who are temporarily unable to work. these are fishermen, the crabbers, the oyster harvesters and shmpers, with the greatest immediate financial need. bp is provided expedited inter rim payments whose income has been interrupted, approximately 13,500 claims have already been paid, totaling, as i said, $37 million to date. the claims process was established to fulfill our obligations as designated, as a

desied responsible party under the oil pollution act of 16990. thus, are guided by the provisions of opa 90, as well as u.s. coast guard regulations when assessing claims. i am not an attorney and therefore, cannot speak to particular legal interpretations or applications of opa 6990. i can, however, reiterate that bp does not intend to use the $75 million cap in the opa 690 statute to limit the claims. we expect to exceed it and will not seek reimbursement from the oil spill liability trust fund. in closing, i would like to add a personal note. my ties to the gulf coast run deep. i was born and raised in louisiana. i went to high school there, college there and graduate school there. my family spent many, many summers vacationing along the gulf coast. my mother lost her home of 45 years in hurricane katrina and

the recovery process was time consuming and at many times, incredibly frustrating. i know firsthand that the people in this region cannot afford lengthy delays in addressing economic losses caused by this spill. i volunteered for this assignment because i'm passionate about the gulf coast. it is a place i call home and i want to be a part of the solution. finally, as we respectfully inform the committee, i have been asked to testify at a hearing shared by senator landrieu of louisiana this afternoon, therefore, i may need to excuse myself if this hearing runs past 2:30.m. if that haens, i will be pleased to answer any additional questions from this committee in writing. and with that, i welcome your questions. >> thank you. but if we need you for additional questions, we will want you to be present. attorney raischle clingman,

acting general counsel for transocean, partner in charge of souther land's houston office, who specializes in energy, transportation and commercial litigation, a graduate of rice university, university of texas law school and has been honored regionally and nationally for legal excellence. >> thank you, chairman. chairman conyers, ranking member smith and other members of the committee, thank you for the opportunity to speak with you today. i'm a partner with souther land, asbil and brennan but at the present, working with transocean working on the issues of the deep water horizon incident. the last few weeks have been a time of great loss, sadness and frustration for many, including all of us at transocean. our hearts and prayers are with the widows, children and family of the 11 lives who were lost, nine of whom were transocean

employees. our hearts are with those who were injured and with those were evacuated and survived. we and i offer our deepest sympathies. we are committed to protecting the memories of those who are lost and to providing for their families. i am here today to report to the commission -- to the committee on various legal issues facing transocean. first and foremost, transocean is fully prepared to meet all of its legal obligations arising from the de"deepwater horizon" accident. i want to assure the committee and those represented here today that addressing and resolving the claims of transocean employees who were injured and of the families who lost loved ones is a top company priority. those discussions are beginning now and it is our hope that we can resolve these claims fairly, quickly and amicably. the deep water horizon accident has resulted in many legal challenges for the courts and the companies and the families and claim map thes represented here. these involve class action

lawsuits as ll as claims under the two frame works of the oil pollution act and general maritime law, including the jones act. as you know, congress enacted opa, oil pollution act of 1990 to compensate on a no-fault basis people and businesses for damages caused by oil spills and contamination. the statute establishes a claims process that enables anyone damaged by an oil spill to obtain compensation from a responsible party. in this case, the coast guard designated bp as the responsib party for oil and gas flowing from the sub c well. as you heard again today urge bp has accepted that designation and has testified that it will pay all legitimate claims, regardless of the statutory 5 million cap. as we understand, bp has established that process and paid a substantial number of claims to date. the u.s. coast guard designated transocean as a responsible party under opa and we have

accepted that responsibility for any contamination from the mobile work space, the are rig. there has been no indication thus far of any contamination from the rig itself, however, we stand ready to meet any legal obligation that arise from that status. the opa claims process allows someone to file a lawsuit only if and when bp has denied a claim or not reached a claim to the claimant's satisfaction. nonetheless, as you know, a great number of lawsuits have already been filed, including approximately 135 against transocean across eight states. most of these are class actions in which small business interests and other commercial interests claim a current or potential future loss of business in the aftermath of the spill. there is substantial overlap in the lawsuits. florida property owners, for example, are included in the

proposed class of at least three lawsuits to date. louisiana residents who derive income from the coastal zone are claimants in at least four class actions. and overar offingll of these suits are class actions on behalf of all persons damaged in the gulf of mexico. these multiple and dupe plinktive lawsuits create confusion. they strain judicial resources and could lead to disparate treatment for lit gants who are similarly situated. for these reasons, both plaintiffs and defendants have filed motions asking to establish a multidistrict litigation or mbl proceeding to bring all of those lawsuits together in one court and consolidate those claims. the second category of claims, as i indicated, are not the class actions, but personal injury and death claims covered by gener maritime law as mentioned by chairman conyers. these include its jones act, which pro-side seamen the right sue and create favorable presuches that ease their path to recould havelism maritime

body of law applies to the crew members of the rig. at the same time that thataw enacted by congress makes it easier for seamen to pursue and recover claims it also provides limitationctions on total damages for such claims. under the maritime law, transocean has filed maritime limitation of liability action in the united states district court forhe southern district of texas. this law recently reviewed and recodified by congress in 2006, allows ship owners to consolidate actions and define their liability in a situation like this. we have filed the action. we have requested with consolidation. and we have been indicated an initial proposed limitation of liability based on the statutory calculation at just under million. the ultate amount and what will be included will be left to the court governing that action. i want to stress that that limitation does not apply to claims asserted against transocean under the oil

pollution act. transocean has asked the limitations court to clarify the existing order to make that clear and that order has been so amended. transocean filed this limitation action for several reasons. we believe it is important to have a central venue for these actions to maintain some continuity and consistency that will not be possible if lawsuits proceed in various states and federal courts. in addition, our underwriters instructed us to file the limitation action and we did so to avoid losing any insurance coverage that will help pay claims. overridingly, however, transocean is committed to resolving all of the interrelated legal matters diligently, expeditiously and fairly. our override willing mission in conduction wh bp, unified command, government officials and other contractors is to stopping the leak, containing contamination and determining the cause of the explosion. and my heart is lightened to hear chairman conyers say that the top kill kill shot method may have been successful.

i thank you ain for the opportunity to speak with you today and i look forward to answering any of the questions you may have. >> attorney james ferguson, senior vice president, deputy general counsel for haliburton. including his responsibility -- included in his responsibilities are litigation, environmental employment law activities in the company's law department. in 1988, he assumed the deputy general position, where he -- or he began in 1988, assumed the deputy general position in 2007, served adirector of risk management and assistant general counsel for haliburton. >> chairman conyers, ranking

member smith, i appreciate the opportunity ton here today and share haliburton's perspective -- >> pul the microphone closer, sir. >> as you review the legal issues related to deep water horizon catastrophe. haliburton looks forward to continuing to work with the congress, the administration and now the presidential commission to understand what happened and what we can do to ensure that oil and gas production is undertaken in the safest and most environmentally responsible manner. the catastrophic blowout with and the spread of oil in the gulf of mexico are tragic events for everyone haliburton extends its deepest spathy to the family, to the friends and the colleagues of the 11 people who lost their lives and to those workers that were injured in this tragedy. haliburton has and will continue to fully support and cooperate with the ongoing investigations into how and why this tragic

event happened. we will continue to make our personnel available and we have produce canned approximately 50,000 pages of documents. as you can no doubt appreciate, there has already been a immense amount of lit gigs filed in connection with the blowout. as of may 23rd, haliburton had been named in 112 suits involving pollution damage claims and four suits bringing personal injury claims. with current investigations under way with, it's still premature for haliburton to offer theories about what happened. thus, i will not be addressing technical and operational issues, ich in any event are not within my expertise, but instead, will focus on the issues that you posed in your invitation to testify. mr. chairman, you asked that we with discuss legal liability issues surrounding the gulf coast disaster. in addition, you have expressed concern about waivers indivials were asked to sign they returned to shore from the "deepwater horizon." with respect to the waivers, haliburton did not ask any of

our four employees to sign a waiver or any other document as they returned to shore. our employee assistant personnel were already in contact with their families and provided whatever aid and sport the employees needed. since then, we have reached a settlement with one employee which did involve a release by the employee. as you consider broader liability questions, it's important to understand the structure of the oil and gas exploration and production business, and in particular, the roles and responsibilities of the various parties involved in drilling a deep water well. obtains a lease from the government with rights to explore -- applicable regulatory requirements, the oil company, as the well owner, will engage a drill drilling contractor and many other service and equipment companies to work with on that well. the construction of a deep water well is complex operation involving the performance

numerous tasks by multiple parties led by the well owner's representative, who has the ultimate authority for decisions on how and when various activities are conducted w respect to the mississippi canyon 252 well, haliburton was contracted by the well owner to perform a variety of services on the rig. that included certain aects of the cementing process, but contrary to some press reports, haliburton did not provide in hole quilt such as casing, well head, seal assemblies, float equipment. hall burton is a service provider to the well owner who is contractually bound to comply with the well owner's instruions on all matters relating to the perform millions of all work-related activities that does not extend, however to acts that would create an imminent safety hazard. our employee authorized to stop work in such situations. over the years, certain industry practices have developed with respect to the allocation of potential liabilities. since it is the well owner that

is entering into agreements with the drilling contractor and with the various other contractors and suppliers, the well own letter often establish a system of reciprocal indemnity obligations through tse contracts. also, it's customary for the well owner to take responsibility for certain potentially catastrophic events, including loss of control of the well and pollution emanating from the well. accordingly, the well owner assumes the obligation to indemnify the contractors for liability arising from such occurrences. the terms of the applicable haliburton contract are consistent with this common liability allocation arrangement. therefore, haliburton is obligated to indemnify and hold the well owner and the other contractors harmless with respect to claims by our employees and with respect to loss or damage to our equipment. in like american, the well owner and each of the other contractors are bound to hold haliburton harmless against

claims by their employees and for loss or damage to their property. finally, the well owner has assumed the obligation to hold haliburton harmless against the costs for controlling the well as well as for the cleanup and damages caused by the oil pollution. in closing, haliburton will continue to cooperate with the effort to understand what happened and what we can be done to ensure that oil and gas production is undertaken in a safe and environmentally responsible manner. thank you for the opportunity to share our views and i will be happy to answer questions later on. >> attorney william lemmer, general counsel for cameron international cporation was previously withorix energy company, where he served as vice president, general counsel, corporate secretary and as chief counsel. he has also held senior

management positions at sonoco and is a graduate of michigan state university honors college and the juris doctor from university of virginia law school. >> chairman conyers, ranking member smith, members of the committee, good morning. my name is bill lemmer and i am the senior vicpresident and jeep counsel of cameron international corporation. i wish i could say i appreciate the invitation to beere today, but the fact of the matter is thate are here to discuss a truly tragic event and the consequences that have and will continue to flow from it. cameron has -- cameron continues to lend its assistance and efforts relating to capping the well and we continue to work with eryone involved to try to understand what happened and how this happened. cameron is based in housn, texas, and is a leading provider of equipment and services to the energy industry. and with 11 different operating division and approximately 18,000 employees, more than 300 locations. the cameron product used by the

deep water horizon is called a blowout preventer or bop, a product that cameron invented in 1920s it allow our customers to control the pressure in a well while being drilled. there are over 400 cameron bops operating subsea, 130 operating in deep water. eachndividual bop stack is made up of components specified by our customers, configured to their specific operating specificati specifications. each is manufaured, testing in accordance with industry standard and applicable regulations. our bops have a very long history of reliable performance, including performance in some of the harshest operating conditions in the world. the about op in the deep water horizon was operating at 5,000 feet below sea level at the time of the incident. as soon as cameron was notified of this incident, we mobilized a team of our best drilling specialists to work with bp, ansocean and others to assist with efforts to shutter this well. our people have been working with around the clock to assist in this effort and will continue provide all the rources at our

disposal until this well is shut n on the subject of today's hearing is difficult to say anything with precision at this stage. efforts to cap the well are ongoing and the facts related to explosion and its impact on the bop and ability to functn properly are simply unknown at this point. the present challenges involving in determining causes and effects are many. in plan, from our standpoint, inability to examine the deep water with who are ripz'sop there for example appears to be far into early to drawactual conclusions about how this incident occurred. and so, too, ist with are respected questions of liability, which are, by their very nature, closely linked to these presently unanswered factual questions. anything specific we might say in this connection would be speculative and perhaps misleading or potentially so, t thcommite and to the public. given the very limited extent of everyone's present suddenier standing of the facts, it is impossible for anyone to make any liability determinations at this point. nonetheless, every unof us is mindful of the personal,

environmental and economic concerns associated with this incident. we understand the need to discover the facts relating to what went wrong and to do all that is possible to prevent the recurrence are of an incident in the future. i'm here to answer your questions. thank you. >> attorney vincent foley, partner with holland & knight in the marine -- in the maritime practice grp, practicing primarily in the area of international litigation arising out of vessel casualties, including coalitions, groundings, explosions, fires and oil spills. he has participated in all aspects of oil spill litigation, oil pollution prevention seminars, formal response drills and oil spill response training. a graduate of the merchant

marine academy and the tulane law school. >> thank you, mr. chairman and distinguished members of the committee. i am grateful nor opportunity, honor and privilege to address the committee today. i'm here to discuss the oil spill liability and compensation scheme in place in the u.s. the oil pollution act of 1990 is a primary federal statute dealing with liability and compensation for the discharge of the oil in navigable waters. opa is part of a larger statutory scheme, which includes the federal water pollution control act, or the clean water act, which also provides for civil and criminal penalties for oil spills on a per day, per barrel basis with no limits of liability. the opa compensation and

liability scheme, the objective of the scheme was torovide compensation to claimants for oil spills. opa works by designating a responsible party to set up a claims process to allow claimants to seek compensation. for a vessel, the responsible party means the owner or operator or basically the entity reonsible for day-to-day activities and the opa limits of liability for a vessel are calculated based on the gross tonnage, which is the -- the total overall internal volume of the vessel. the opa also has a provision for offshore facilities, the responsible party for an offshore facility is the lessee or permitee of the area in wit facility is locate the offshore facility limit, it is a more complicated analysis, which involved -- involved because unlike grossonnage for a vessel, which has a certain maximum capacity, an offshore

facility has access to an oil field in the seabed. the opa limit for an offshore facility is $75 million for damages, but importantly, it's unlimited for remove al costs. now, in addition to setting up a liability scheme, opa als set up a compensation scheme through the national pollution fund center and the oil spill liability trust fund. the oil spill liability trust fund is an emergency fund for payments tolaimants over the opa lits. the fund is sourced by a per barrel petroleum tax as well as collection of fines and penalties for violation of other environmental statutes and recoveries by the national pollution fund from responsible parties. the fun step it is to pay claims that are either denied by a responsible party or that are

over the responsible party's set limits of liability. now, with respect to the limits of liability, it is important to under -- or to point out that the opa lims of liability require the participants in the industry to show evidence of financial responsibility up to those limits. and the purpose of that financial responsibility is so that there are immediate funds available to set up this compensation scheme and to start paying claimants. the -- when -- when i mentioned the offshore facility, there's $75 million limit for damages and unlimited for removal costs, those are the two primary types of opa claims. the removal costs include the cleanup, the prevention, the minimum -- minute mikz the extent of the oil spill, mitigation and disposal of the oil. the damages arehe economic

loss damages, such as injury to natural resources, injuries to real or personal property, also of revenue from use of natural resources, loss of profits and earning capacity and public rvices rendered during or after removal activities. with respect to both types of claims, whether there are removal or damages, there is supporting documentation needed to establish that you have a compensable claim under the statute, whether you make the claim to the responsible party or to the nional pollution fund. and the way the system is set up, the claimants are required to make the claim first to the responsible party to seek payment. if that claim is not paid within 90 days, they may -- they have the option to litigate against the responsible party or to seek compensation from the national pollution fund center, which ll be an adjudication, also

based on documentation of that aim. so, that's the system set up by opa. with respect to the limits of liability, there have been ineases in opa limits with respect to vessels there is a recent increase for vessel opa limits in 2000 -- in the 2006 delaware river and protection act it increased the opa limits of liability for vessels and also increased the responsible rty payments to the trust fund. and in 10, just recently, we had a consumer price index increase in the vessel limits for liability. there have not been increaseso the opa limit of liability, the damage limitation of 75 million but again there is an unlimited am for removal costs. now, when we also talk about limits of liabily, it is important to understand there is unlimited liability under opa. if -- a responsible party will lose their liability limits and be strictly liable on an

unlimited basis in two situations. one, there is a situation where they lose their limits for gross negligence or willful dismist conduct, violation of an applicable federal safety construction operang regulation by a responsible party or by a party under contract with a responsible party or the third category where you would lose a limit would be a failure after the spill to report the spill, a failure to provide reasonable cooperation or a failure to follow a governmental order. if any of those circumstances exist in the aftermath of a spill, the responsible party would lose their limits of liability and have unlimited liability. the second area where you have unlimited liability is that opa allows states to impose supplemental liability over and above the opa limitations. so, here is another opportunity

to have unlimited liability that's already built into the statute. with respect to the industry experience with the opa liability scheme that i've just described, it has been a positive experience. the system works within the responsible party limits for the vast majority of oil spills. for exceptional spills which exceed the opa limits, the emergency trust fund is available to make payments and the emergency trust fund is based on a per barrel petroleum tax. alternatively, a responsible party will pay in the excess of their limits without seeking reimbursement for the reasons i -- becse of the threat of an unlimited liability for violation of a federal safety -- applicable federal safety regulation or gross negligence or potentially criminal liability under the federal statutes that impose criminal liabilities for oil discharge. it's important to -- when

considering an increase to the opa limits, it's important to carefully study the overall liability and compensation scheme can. a precipitous change in opa limits could have adverse and unintended impacts on this functioning and reliable compensation system for oil spills there is also a potential to disrupt u.s. oil imports because an increase in opa limits comes with an increase to the particints in the industry to provide this financial respsibility certificates. this, eventually, will require extraordinary -- extraordinary and in most cases unaffordable premiums for the participants in the industry and may cause most small, mid size and even large owners and operators out of business, leaving only major players who can self-insure to continue with the u.s. oil

import business. thank you for the opportunity to address you this morning. i looked for to your questions. >> tom galligan is the president of colby-sawyer college. from 1986 to 1998, he taught at the paul haybert law center at louisiana state university. he was previously dean and professor of law at the university of tennessee college of law, has published numerous books, articles on torts and admiralty. his scholarship has been cited

in the restatement of torts and by numerous legal scholars. he has been cited in the united states supreme court cases and other federal and state appellate trial courts. >> thank you. chairman conyers, ranking member smith and members of the committee, thank you for inviting me to appear before y today. my name is tom gligan and i am the president of colby-sawye college in new london, new hampshire. the oil spill in the gulf of mexico and the ensuing disastrous consequences have forced our nation to consider its damage recovery regimes for injuries and deaths arising from maritime and environmental catastrophes. doing so row veals inequity test and inconsistencies that yo in congress, have the chance and ability to repair by amending the relevant statutes. i would like to begin with a discussion of wrongful death

recovery under the jones act, which is applicable to the negligence-based wrongful death actions by the survivors of a seaman and the death on the high seas act, which defines the rights to recover for wrongful death in all other cases arising from incidents occurring on the high seas. as interpret, neither of those statutes allows recovery for loss of society damages to the survivors of those killed in maritime disasters. now, what are loss of society damages? they are compensation for the loss of care, comfort and companionship caused by the death of a loved one. the majority of american jurisdictions today do recognize some right to recover for loss of society damages in wrongful death cases, but the jones act and dosao not. one might arguably understand the availability of loss of society damages in 1920 when the jones act a and dosa were passed, it was a different

world. but to deny recovery of loss of society damages to a loved one in a wrongful death case in 2010 is out of the legal mainstream and iis a throw back to a past era. a spouse, child or parent who loses a loved one suffers a very real loss, a loss of care, comfort and coanionship and the law should recognize that loss much congress can appropriately make the law consistent with current moral, soal and familial realities by amending the relevant statutes to provide recovery for loss of care, comfort and companionship in maritime wrongful death cases. now, interestingly, there is one exception to the rule barring recovery of loss of society damages under dosa and that exception points up current inconsistencies in the law. in 2000, after the korean airline and twa disasters, you amended dosa to provide recovery of loss of society to the survivors of those killed in

high seas commercial aviation disasters. us in, in commercial aviation disasters, dosa is consistent with modern law and values, but for anyone else killed on the high seas, someone kind a cruise ship, someone killed on a semisubmersible floating rig or someone killed on a helicopter, the survivors may not recover loss of society damages. the proposed amendment would provide all survivors of those killed in maritime disasters with the recovery now available in commercial aviation wrongful death cases. and i would with like to pause here and say one thing about opa 90. opa 90 does not provide liability in the wrongful death case. those are outside the scope. i would like to shift to survival actions and note the supreme court in a high seas death case has held that predeath pain and suffering is not recould have rabble in a maritime survival action when

the death arises on the high seas. thus, in any case covered by that rule, no matter how much the decedent may have suffered before his or her death, those damages are not recoverable. they should be available. anotr subject of significant import arising out of this disaster is the potential recover ability of punitive damages in various types of maritime cases. the united states supreme court has twice in the last two years held that punitive damages are recould have rabble under general maritime law, but it has limited that recovery in at miralty to a one-to-one ratio of punitive damages to compensatory damages. today, america might well consider if that one-to-one ratio cap frustrates the deterrent aspects of punitive damages in certain maritime cases. it is less clear if punitive damages are available in jones act and dosa cases until the most recent supreme court case

on the subject, i would have said no. now, i am less sure. a final critical point in this analysis is the effect and a plic ability of the limitation of liability act to these events. originally passed in 1851 to encourage investment in maritime shipping and commerce, the act allows a vessel owner and some others to limit liability to the post-voyage value of the vessel plus pending freight if the liability is incurred without with the prifity or knowledge of the owner. one may just appliably wonder whether an act passed at the time before the modern development of the corporate form and before the evolution of modern bankruptcy slaw still sail yent in personal injury and wrongful death cases. however, limitations still exists and in this case, prepresents this committee with an opportunity to consider and discuss its amend tomorrow assure personal injury and wrongful death victims more just compensation. thank you very much and i would

be happy to answer any questions. >> i invite ranking member lamar smith to begin the quesons. >> thank you, mr. chairman. i know we have a vote coming up and so i won't use up all of my time. let me direct my first question to mr. willis. and mr. willis, i just want to confirm what i believe bp's position is, and that is that you don't feel the taxpayers should pick up any of the cost of the oil spill, is that correct? >> representative smith, we are going to pay a legitimate claims associated with damages caused by that spill. we are going to pay for damages to people's livelihood. we going to pay for lost wage we are going to pay all claims that are substantiated. right, i understand. >> pay all claims that are reasonable and necessary. >> right. and you don't feel the taxpayers should pay any of the costs

attributable to the oil spill? >> i'm sorry, accident hear your question. >> you don't feel that the taxpayers should pick up any of the costs of the oil spill? >> we realize that we are going to be judged by our response to this spill and we will pay for all damage that has been caused, that is directly related to this spill, to people, to governments, to the communities. >> and bp, not the taxpayers? >> bp is going to pay for all damages that have been caused by this spl. >> okay. ank you, mr. willis. >> yes, sir. >> mr. foley, i was going to ask you if you felt that the liability cap needed to be raised. i think yohave actually explained very well in your opening remarks why that's not necessary and why people can still be adequately compensated. so let me go to attorney general hood and ask you a question, if i may. attorney general hood, do you feel that your state of mississippi has received all the equipment and permithat you need to address the oil spill from the federal government?

>> i'm sorry, i couldn't hear your question. >> i'm speaking into the mike. maybe i can get some help. do you feel that the state of ssissippi has received all the equipment and permits it needs from the federal government in order to adequately address the oil spill? >> yes, sir. we have -- we have been satisfied with the efforts of the federal government and bp gave 25 million to the state so that local government does draw dawn on that money to ppare for the spill to come n. >> so you have everything you need for quilt and permits from the federal government? >> yes, sir. >> okay. thank you. mr. willis, last question with. you have a background in oil exploration. do you feel that we should consider limiting or eliminating all offshore drilling? >> by training, i'm a geologist.

i grew up on the gulfcoast, born and raised in new orleans, louisiana. spent many summers in biloxi and bay st. louis, pascagoula and when my folks actually had a lot of money, we actually went over to destin. and i have actually studied in the marshes of louisiana. and i realize that there's a very delicate existence in louisiana, particularly between the oil industry and the fishing industry. i have family members who worked in the oil industry who lov to fish. one of my uncles to worked in the oil industry taught me how to crab. i think they can both exist together. >> both offshore exploration and fishing and crabbing? >> yes. >> okay. thank you, mr. willis. thank you, mr. chairman. i yield back. >> chairman of the constitution committee, jerry nadler. >> thank you. mr. -- first of all, let me just say that i hope we can have attorney general hood back here before this committee to really explore the issues that he raised about the class action

suits, about federal courts, removing these cases, perhaps not properly and about why it is so bad in the federal court in an event. i mean, even if it is removed york should you get less justice in the federal court, which obviously we think you do than in the state courts. i hope we can examine that at a subsequent occasion. let me ask the gentleman -- mr. willis i think is the person i want to ask. does bp have are sole liability for damages caused by the use of dispersants as well as by the use of the oil? >> sir, mynvolve tonight date in response to the oil spill has beenassociated with the claims process. >> fine, someone files a claim, i got sick through breathing air made poisonous by the dispersants, would you award that person an award? >> we have an open claims process. and anyone who feels like they

have been damaged or hurt or harmed directly by this spill has every right -- >> directly by this spill, does that mean by the dispersants or only by the oil? are we going to have to determine jones got poisoned by the oil but smith got spoiled by the dispersants, erefore, you are not liable or are you willing to tell us that it doesn't matter, you are going to cover people who got sick for whatever cause? >> what we are going to do is follow the law. >> well, i'm asking you, do you feel the law covers -- do you feel that the law covers the dispersants or on the oil? >> i'm not an attorney about but i will tell you we have a claims process, accessed three ways through a 1-800 number. >> excuse me, sp. stop, you're wasting my time. i'm not interested you have a claims process and it can be accessed. we know that the question is what will you respond to in the claims process? can begin answer these

questions? >> i will tell you what we will respond to in our claims process. the claims? >> i'm sorry? >> what kind of claims? >> to date, as iention into in my testimony, we have pifder 13,000 claims some, of them have been for lost income, some have been to -- >> someone breathes -- i'm asking you a different question if someone breathes in air on the louisiana coast and claims that that air is poisoned as a result of the dispersant and can show that that is the case, is that a valid claim under your process? >> they can file a claim. yes, ma'am they can file a claim. >> i didn't ask if they can file a claim. i said if they can prove that claim that they e poisoned by -- because of the dispersant, is that a valid claim that you would pay? >> every claim will be evaluated and looked at fairly -- >> you answer yes or no, please? >> every claim -- do you consider poisoning by the dispersants your responsibility >> what i'm telling you, sir, is

that we will evaluate every single claim that we get in a fair and -- >> i know you will evalue t you're evading my question. and the question is -- let me read you something here. read you a different question. fishermen responded to a working bp's giant uncontrolled slick in the gulf are reporting bad headaches, hacking coughs, stuff if i sinuses, sore throats and other symptoms. the material safety data sheets for crude oil and the chemicals used in its dispersants list these very illnesses as overexposure to carbon, hydrogen, sulfate and other chemicals boiling off the slick. bp is not offering people respirators. we just finished, in the other room two days ago, voting $10.5 billion to compensate people who were poisoned by breathing in toxic air after the world trade center center disaster because the secretary of -- because the head of the epa at that time lied and said that there were no

ill health effects and the air was fine. i very much fear we are recreating the same thing right now. and that bp, and i have a whole group of stories here, seven people he been admitted into the west jefferson medical center newrleans receiving treatment for having contact with dispersants, marine toxicologists said the chemicals used by bp can wreak havoc on the person's body, even lead to death. like other cleanup workers, jackson had attended training class, told not to pick up oil-related waste but wasn't provided with protective equipment. the bp officials told us if we ran into oil, it wasn't supposed to bother us, which is clearly untrue. i fear what bp is doing now going to get thousands and thousands and thousands of people sick and maybe dead. and my question is do you undertake the responsibility, not to evaluate the claim. do you recognize that the toxic air produced by the oil and by the dpersants can make people

sick and is your responsibility? yes or no? and what will you do to prevent this from happening? you're obviously allowing and requesting people to work without proper protection. >> i realize and i understand your question. we have received as a part of our claims process claims related bily injury, however, opa does not contemplate personal injury, but as part of our claim process, we will accept those claims, we will evaluate those claims and we will with address them as theyome n. >> but in your evaluation, are you going to reject them because they are caused by dispersants, not by oil? that's the realquestion. are you going to protect the workers or are we going to recreate thousands of people who are sick and who are going to be debating a few years from now how to compensate? >> we are going to do the right

thing. we are going to respond to this in an effective manner. and we realize we will be judged with on our response. and we realize -- >> i will just observe since my time has expired that the answers are totally unresponsive to the questions and i hope that after this hearing that you can get us answers to the specific questions i asked. one, do you accept responsibility for the poisoning of people by the dispersants, either in the air, in the water with as well as by the oil or is that not direct, under your definition? two, what steps will you take to make sure that the people working on the recovery are not poisoned as they are now clearly -- as is now clearly happening to them. i hope you can get us direct answers to those questions and not simply say we will evaluate it. thank you. >> senior member of the committee howard coval.

>> let me put a proceed y'all question to you, if a plaintiff submits a claim for immediate compensation and compensation is, in fact, afforded, is that claimant permitted to subsequently subt claims if the damages are increased? i guess you don't require a release upon delivery of the first response to a claim, i guess is the question? >> just to make sure i understand your question, you're asking whether or not a release is required? >> yes. >> when the first claim is deliverered? a release is not required. >> okay. i assud that thank you, sir. mr. attorney general, mr. hood. mr. hood energy your testimony, you suggest that state actions related to this oil spill should not be removable to the federal court. now i'm told, may be wrong about this, that tort reform advocates rate mississippi at or near the bottom of their ratings in every category studied. now, why should we bar removal

related to this spill if mississippi's system is a poor record it may not be a poor record. my information may be flawed. what do you say to that? >> i suspect that the information that you have is probably biased. but -- >> i have been beneficiary of biased reports as well as you have. >> yes, sir. yes, sir. me, too. but see, you have florida. you have texas. alabama and louisiana, you have all our states that want -- our attorneys general want to bring our actions in our state courts and have the federal judiciary recognize that we are a separate sovereign. we will be making claims under our clean water acts, under our coastal wetlands protection act. we are trying to recover resources for our states and you know if we get thrown into a mass tort action in houston, texas, then we won't -- we won't recover all that we are with

owed. that is alwe want. all we are owed and nothing else. >> thank you, sir. mr. lemmer, let me put a two-part question to you, sir. has cameron international made an assessment yet as to whether it is exposed to any liability under the oil pollution act, a. and b what is cameron international's previous experience with malfunctioning in its blowout preventers? >> congressman, the answer to the first one is we believe we are not a responsible party under opa. that's initially bp. and as we heard today, transocean. we don't believe that we are. with respect to the history of our blowout preventers they can performed excelntly over the years. they have gone from the surface to shallow waters to deep water and we have never had an incident like this before. >> i thank you, sir. mr. foley, i think you touched on this in your statement, but if you will, discuss briefly the civil and criminal penalties that are relevant to this bill

under opa and other environmental laws. >> therere civ and criminal

>> i'm not sure i understand your question. >> okay. we have got a blowout preventer that apparently failed, we don't seem to know y we don't know if there was a super high pressure gas bubble down there. i hope er 4 is coming with that data and that information so we can find out what you may know u haven't told america. but i see a whole congress that's wrestling with this. i see hearings all over the hill. there's a lot of media focus. it's on every day. but yet we haven't focused the first thing i believe that we should do is find out what went wrong. and we don't know. is there information we have that bp would be interested in, you think, mr. willis? >> sir, congressman, all i can

tell you is that since april -- since april 29th, my focus has been making sure the people that have been hurt in louisiana and mississippi and alabama and florida by this bill are compensated by this in realtime. that's been my total focus. >> and mr. ferguson, representing halliburton, i presume you were involved in preparations to cement the well? >> the company was on the well, yes. you're here as an expert, not on the geology of it but the legality of it. >> that's right. >> so that's where i'm going to run into my blank here. i just turn this into a statement rather than a question. because i will just say, mr. chairman, and members of this panel, i have great difficulty going down a path of trying to determine how congress might deal with potential liabilities or what kind of message we might like to send if we're unable to actually determine what went wrong. and holding people accountable for something that may have

never been encountered before geologically occurs to me to be a little bit premature. i'd like to have done this examination on the other side of the geological report that hopefully we'll get the technological report that will come from bp, from mms, from halliburton and other companies that are involved. and at that point we could be objective. but it's -- i think it's premature to be at this point in this testimony that's here today, and i'm going to turn my focus on figuring out what went wrg, learning what went wrong, and at that point start to put some of my conclusions together on whether congress needs to act and how we might best do that with the best amount of judgment. so i would just thank the witnesses for coming to testify today, and it's great to be part of america and i would yield back the balance of my time. >> mel watson, member of the judiciary committee. >> thank you, mr. chairman. and i don't disagree with what mr. king has said, it's unusual,

but it is interesting that people are already starting to point the finger at each other. mr. lemmer, i take it you already have concluded that your blowout prevention system didn't cause this accident. you've testified to that affirmatively. yet you've also testified that as soon as this occurred you had people down therenvestigating and doing what was necessary to repond. so i guess the first question i have picks up where mr. king left off. has anybody made any preliminary assessment of what did cause this? mr. lemmer, you seem to know what didn't cause it. perhaps you could tell us your theory on what did cause it. >> coressman, at this point, we don't have the necessary facts to make that determination. most of that is -- you made the determination

that your company's system didn't fail. you must have made some kind of determinion in order to be able to make that assessment. so what are the possible theories of how this occurred? >> well, first of all, congressman, what i said is we don't have enough information at this time to make any such determination. >> no, i don't think you said that at al you -- i'm looking pretty much at your testimony. you seem to have eliminated -- you said in response to somebody's question, you said your company doesn't have any liability, it was bp and the other folks. so the question i'm asking is, what are the -- i mean, i'm not asking you to tell me what caused this. what are the range of possibilities of what caused it, i guess, is the question i'm asking. >> okay. i'll answer that question b first of all i want to go back to the point. the question was about our liility under opa. that's a particular statute, not

liability in general under common law or statutory law. >> i'm sorry if i misremitted what you said. can you answer the question now, maybe? >> the theories have been well expound on in other hearings, they go anywhere from a catastrophe down hole where there's a failure. >> well, we know there was a catastrophe now, come on. >> did the casing fly up into the blout preventer, did the casing hanger fly up into the blowout preventer, did the blowout preventer try to close on a tool joint, there are a number of instances that would prevent the b.o.p. from actually closing. then there are the issues of controls. from what i understand, reading in the paper and watching "60 minutes" and what not, the attempt to close the emergency disconnect did not occur until after the explosion. it could well be, although we don't know at this point. it could well be that that explosion cut the communication between the control and the actual operation of the b.o.p. on the sea bed. >> okay. well, we've got your theory.

what about the halliburton theory? tell me what, other than halliburton is not responsible. >> we do appreciate the investigations are still -- >> i understand that. i'm just asking you what you think happened. >> i can comment like mr. lemmer did, that there were a number of things that were going on with this well. there were a lot of opetions that were being done. there was a lot of equipment and there were a l of parts in the well that could have failed. the manner of doing the operations could have been a problem. until the investigation's over with and we've seen all the facts, we just can't identify which of those -- >> all of which would have been under the control, i presume, of bp. >> well -- >> at some level. >> bp is in control of the operation. >> let me ask this question, mr. willis. there are already families of deceased people who died as a

result of this incident. what are you all currently, what efforts are you currently making to try to address the needs of those families? so -- >> are you just waiting on the lawsuits to come and be resolved at the end of the process? >> so, congressman watt, the first thing i would say is our hearts go out to the families -- >> i understand that, mr. willis. well have that response. just -- >> my understand -- sorry. my understanding is thaeach company is addressing the needs and claims of its own employees and survivors. >> how many of ose empyees were employees of bp? >> none of them were employees of bp. >> who were they employees of? >> they were employees of miswayko and transocean. >> transocean, where you? what are you doing to address

the needs of the families of the survivors currently as opposed to waiting on them and prove whatever claim they may have? >> yes, sir. of the 11 lives that were lost, nine of those were transocean employees, and we do take happily responsibility for addressing the needs of those families. >> what are you doing right now? >> we're waiting until after memorial service our company held on this past tuesday to start financial discussions with the families. we held the memorial with all the families and relatives on tuesday -- >> so you're not taking any steps right now other than waiting on the legal liabilities to be determined, that's what you're saying? >> no, sir, we waited until after the memorial and are now in touch with those families and/or their legal representativ representatives. we started that process before the memorial. we did not want to have financial discussions until after the memorial. we thought it was inappropriate to interrupt the grieving process. >> to the extent that mr. king has said we can't d things

retroactively, i agree with that. but we can inform ourselves abou what the future state of law should be, and i would just remind my colleagues that in the upcoming financial regulatory reform debate, this same issue about what -- to what extent the federal law pre-empts all state law is the same preemption question. all national companies would like to have one national standard and never answer to any state law, any -- be subject to any liability for any -- from any attorney generals' lawsuit, state attorney general's lawsuit. but you're going to get an opportunity in other context to address the same issue and i hope we'll remember this gentleman, mr. hood's telstimon,

when we get there. i yield back, mr. chairman. darrell issa. >> thank you, mr. chairman. obviously the loss of employees' life are covered by more than just the legislation, or, sorry, the cap that's we're dealing with here today. i'm not asking you to tell us about the settlements, per se, but in overall terms, what is the company's anticipated dealing with the loss of lives and is any part of it affected by the ledge -- or by the $75 llion cap that we're discussing here today? >> yes, representative. no, the $75 million cap that has been referenced applies only to opa, which are environmental claims. that cap has nothing to do with our responsibilit for our employees. they are, however, subject to the liability action filed in texas federalcourt. how we address that depends on how those claims play out.

what i can commit to you and to the families involved is that from our ceo down we have testified and will proactively resolve those claims fairly and we are to the very outset that ve process now. but it is one of our top priorities. >> and the business of drilling rigs, whether on land or at sea, it's pretty dangerous business, isn't it? >> i would say no more dangerous than many industrial workplaces that are obviously a lot of risk factors in offshore drilling. it also has been historically remarkably safe industry, our rig in particular involved here has not had a single incident for more than seven years of even minor injuries on board. >> isn't it true that on the very day that this disaster occurred your people were receiving a safety award for the operation of that rig? >> yes, sir, as ironic as that sounds now, the operation had been conducted so well and with so little safety or other concern that there was being an

award given and executives were on board the rig that dafor that purpose. >> and i'm going to continue on with you, if you don't mind, because there's too many to spread it around. isn't it true that you'd concluded your basic drilling, what, two days before? >> yes, sir. the transocean was brought in to drill the rig by bp as a subcontractor and that drillin had been completed on april the 17th, three days before the deephorizon incident. ironically we were in the process of completing our work, and were in the very short future going to remove the blowt preventer and the riser package and depart the well site -- >> sgoing through that line of questioning, isn't it true that the subcontractor for the concrete portion, halliburton, was on-site? >> yes, sir. halliburton as well as miswayko were doing the drilling. >> british petroleum owns the lease, they have some oversite.

at least three on contractors, you're in a transition phase. is it a particular dangerous time historically, this transition? >> that's a good question, and i would say generally, not being a drilling engineer myself, it is actually considered one of the more safe times. and one of the thing that is so astoundingly unusual about this incident is that it happened after a well had been cemented and cases. normally you would anticipate that during the drilling ocess, as you're actually reaching different geologic depths, you would see greater risk from hydrocarbons emanating from the structure. here the well had been cemented, cased and concluded. so it is extraordinary. i've heard that from everyone in the industry that there would be such a catastrophic failure. >> so going through that line of questioning, for our edification, one, you're going to take care of your people based on laws unrelated to our hearing here today. two, your work h been completed, but more importantly, there were multiple different

folks, companies represented there. there is a whole series of logs, not of all of which you probably have, that will have to be reviewed. the failing device may or may not have been the one that was inspected days before, the blowout preventer. the concrete is a factor of why and how it failed to perform. so summarizing it, we don't know whether there was any failure that could have been anticipated. we don't know and we're not representing here, mineral management service who has a primary responsibility to ensure that, and yet we're talking about removing a cap that may or may not apply,ased onhether there was or wasn't wrongdoing by any of the companies represented here. would you say that synopsizes what we're doing here today? >> i agree with many of the states you just mad t is incredibly difficult to prejudge liability or responsive action

that should be taken. i'm tlifled to hear that perhaps the well leak has been stopped. that will allow more to be dedicated to the investigation. i wholly agree it is inappropriate to assign blame or liability until investigation is complete. what is important today is claims are being paid and persons europed are being taken care of and that is our commitment. >> i for one will be looking at how the companies handle their obligations and obviously would like to have further research once there are more facts as to whether this was an inevitable event oromething that could have been prevented by complian. mr. chairman, i thank you for your diligence in this a

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[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] to make certain of the security of the diplomats, this costs money. he have to fortify the places where they work, and where they live, and allow the fund has been made about the embassy in baghdad. but during my time, the sky rocket fire about one dozen times. and so, in order for us to meet the obligations that have been asked of the civilian personnel costs money and we cannot, in good faith, send people into harm's way without the physical security being taken into account.

and we would also argue that we save money. even as we increase the civilian presence, we will save the government $15 billion, because it is a lot more expensive to keep the soldiers in iraq than it is to keep the civilians and transportation. and i believe that you can look at this from trading off the budget, and the savings with that perspective. and you have to put this in the greater context. one mistake that the military believes was made is that we militarized the presence in these difficult, conflict areas. and there are many reasons why this had to be done. but we cannot have a military

model of diplomacy and development and expect to be successful in making the case on these other issues. i believe that if you look at all of these aspects that go into the budget requests, i was very pleased that they wrote very strong letters to the leadership of the house and the senate, to make the case that we have to start looking at national security budget. we cannot look at the defense budget for the state department budget. without the overwhelming combined efforts of the others, and without falling back into the stove pipe that is no longer relevant for those challenges of today.

we want to begin to talk about the national security budget. and you can see the trade-offs and the savings. there is resistance in the government, and there is resistance in the larger communities that care about diplomacy and foreign relations, and they are afraid of the idea that we're going to be better-integrated. this is incredibly shortsighted. this is because these are tough budget years and have to make the case that members of congress believe that the highest duty is the security of the united states. in order to do that, you have to have better coordination. some of you know the man that i was fortunate to bring in with resources and management.

and i knew that when he worked in the clinton administration, they would come in with their budget, and this was the easiest thing in the world to get money out of this account. they would come in, and say, these are diplomats and development. take this summer else. we are trying to avoid this with a unified approach that will gauge the credibility of the government and the congress and the people, to present a united front, for the development and diplomacy. and this is just a smarter way to get the resources that we desperately need. >> he is the director of the global economy and development program. >> with the strategic approach that you have given us today, one of the things that people

are expecting, and they were enthusiastic about the election of obama, is more stress -- from unemployment and on fighting poverty. in this balance, i am the director of treasury in my own country. with attention to the employment and poverty reduction, unemployment is close to 10%. in southern europe, there is a social problem that is emerging. in the first eight years of the century, the income gain went to 1% of the population. in terms of the united states being strong and worldwide, how do you think that we can manage the balance between fiscal responsibility, which is necessary, and attention to the

most poor sections of the world population, and the need to strengthen the recovery with the key issue. >> this is very important and complex, and i will answer that in this way. this is the choice that obama and other leaders have had to be making every day. how much restraint, how much spending, how much to directly stimulate imports -- employment, and the kinds of job-creation entities, with high-speed rail. getting this right is not easy, and the fact that bernanke, the leader of the federal reserve, specialize in this came in very handy.

and you can see how to get the balance wrong with the deficit. i will make a few comments. i feel that this is very important for a country to be focused on stimulating the long- term, sustainable employment. and in the recovery act, there are some major investments in clean-energy technology, high- speed rail. these will not be bearing fruit for a long time but they are necessary. if the united states does not once again become the leading nation of innovation, it is unclear where we will find the jobs that we have to produce for people. and if we do this wrong, or we

do this in an artificial way, as some countries are doing, this will lead to protectionism. we had a conversation with the friends in china and in beijing. they have tens of millions of people they're trying to get out of poverty. they want to have an agenda that would capture that would require companies -- this is going to be the fun center, and you put your finger -- i am not talking about the administration.

the rich are not paying their fair share. you have the individual, the corporate, whatever. brazil has the highest tax rate in the western hemisphere. and this is growing like crazy. the rich are getting richer but they're pulling people that poverty. there is uncertain feeling that is said that was working for us until we abandon this, to my regret. you have to get -- many countries to increase this and make the investments -- that will make them richer in the long run. you have to work on the innovation and the new technology agenda to try to create job performance, and you have to strike the right balance, which is not easy.

and many countries require different approaches, would stimulus and restraint. and even during the crisis, you have to work at these projects in order to employ people. it is difficult to do that in the advanced countries because some of the jobs that they will produce are not jobs people are willing to take. and one thing that benefited the united states, dramatically, in the 1990's and the first decade of this century was emigration. we had a lot of jobs that were really feeling the economy, as the population was getting older. immigration will have to be in the mix. this is becoming increasingly volatile, not just here, but everywhere. and there is no single, perfect formula. we know the necessary elements,

and trying to get the right balance is very challenging. and i think that we have to work on changing attitudes. we have to have a robust market economy, that is truly as free as possible, everywhere, but with appropriate and effective regulation, everywhere. and we have to have rich people, everywhere, to understand that many of them benefited greatly by the investments of the prior generations and their own families. and that they will have to be part of helping to keep that growth rate and that economic progress going for the future generations. and we have to change the attitudes for the individuals. there was a column that was written last week, talking about

how poor people across the world have money but they do not spend this on educating children. he spoke about one family, in a poor african village that had enough money to pay their cellular phone bill, for the husband and wife, but not enough to keep their son in school. we have to have leaders in countries and companies to focus on the needs of the children. this is because educating children and keeping them healthy, family planning, these are part of dealing with the long-term economic imbalance. and obviously, there are specific issues, but on a broad stroke, i think that the leaders are trying to balance all of these considerations. and i think that the country is pulling out but they are still going to face a large

unemployment figure for a very long time. and what we are doing now is willing this down for the future. >> before we adjourn the meeting, on behalf of the gender-challenge people here who -- here who were not rolling their eyes, were leaving you alone to raise the issue, i would like to raise this with you and i are friends out here. she was recanting a conversation with her granddaughter, who basically said, what is the big deal about you having been secretary of state. i thought that women always were secretary of state. please join me in thanking secretary hillary clinton. [applause]

>> this morning on washington journal, we will hear about the latest from the gulf of mexico oil spill. and fred thompson will join us, to talk about his memoir. this is live on c-span, every day, at 7:30 eastern. >> of the coast guard and minerals management service are conducting an investigation into this bill in the gulf of mexico. this begins with the destruction of the deep water horizon drilling rig. this will continue near new orleans. investigators will hear about

the position and the qualifications and emergency preparedness. live coverage begins at 9:00 eastern. president obama says that the federal government is in charge of dealing with the oil spill in the gulf of mexico. he spoke with reporters about the offshore drilling regulations for a little bit more than one hour. >> good afternoon, everyone. before i take your questions, i want to update the american people on the status of the oil spill. this is causing tremendous

hardships in the gulf coast, damaging the precious ecosystem. and it led to the death of many workers who died in the explosion. we have the approval to move forward with the procedure to try to stop this. and we will try to prevent any more oil from escaping. given the complexity of this procedure, there is no guarantee of success. we will employ any regional strident -- any reasonable strategy to help until the relief will well as finished. the american people should know that from the moment that this disaster began, the federal government has been in charge of the response effort. bp is responsible for this and we will hold them accountable on behalf of the united states and

the people victimized by this tragedy. they will repay all the money that they know, and the painful losses that they have caused. we will continue to take advantage of the expertise that they have to stop this. and make no mistake, they are operating at our direction. every action that they take must be improved by -- approved by us in advance. if he orders bp to do something to respond to the disaster, they are legally obligated to do this. when they said that they would drill one of oil well, we demanded them to have another. and they are in the process of making another. as we devise a strategy to stop this, we're also dealing with

the most advanced technology in the world. we have a team of scientists and engineers from our own laboratories and many other nations, led by our energy secretary, steven chu. he has dealt with oil spills from across the globe and he is ready for this challenge. trying to clean up the damage from the spill. in this case, the federal, state, and local government has the expertise to play a more direct role in the response effort. and i will be discussing this further tomorrow in louisiana. we have about 20,000 people in the region working to contain and clean up this oil. we have activated -- activated 1400 members of the national guard with the coast guard on site.

they are assisting in the clean- up effort. and this will stop the oil from coming on shore. 1,000 feet of this is being given to the parishes, and we will continue to do whatever is necessary to protect and restore the gulf coast. we have just announced that we are moving forward with the island proposal, that could help to stop the oil from coming ashore km who this will be in the area that is most at risk. and the area where this will be most-quickly completed. this will help the men and women whose lives have been disrupted and even destroyed by the oil spill. from the fisherman to the restaurant and hotel owners. many small businesses have been allowed to defer on the loan payments. and there is the lower-paying

economic injury claims. the victims of this disaster are going to get what they are owed. we are going to help them. cover and we will help them to rebuild. and americans can help them by going to the beaches of the gulf coast. they want for me to remind everyone that all of the beaches of the gulf are open and safe, and they are clean. and as we continue the response, we are moving quickly to make certain that this catastrophe will never happen again. i have said before that producing oil in america is an essential part of the energy strategy, but this must be safe. we have spoken about the dangers of too much -- i have heard people talk about the

dangers of too much government regulation. and we can all say that there have been times when the government has overreached. but there is a corrupt relationship with government regulators with little or no regulation at all. when secretary salazar took over, he found that they had been dealing with corruption for years. they have been enforcing laws about oil drilling. and the corruption was underscored by the secretary general's report covering the activities before 2007. and this report can only be described as appalling. he immediately went to clean up that corruption. it became clear that more reforms were needed. there has been a very close relationship between the oil companies and the agency's that

regulate them. we decided to try to regulate the safety of the drilling. and there are no new programs for oil drilling until another safety review has been completed. this has now been completed and they will have new operating standards, for the offshore energy companies. additionally, after reading the recommendation, with the secretary and other members of the administration, we will order the following actions. we will suspend two locations off the coast of alaska. we will cancel the sale in the gulf of mexico, and the proposed sale of the court -- the coast of virginia. and we will suspend the issuance of the new permits to drill in

the next six months. and we will suspend the wells currently being drilled in the gulf of mexico. it has been made clear that the oil and gas industry has leveraged such power that they have been allowed to regulate themselves. at one example, under the current law, the interior department has 30 days to review the plans submitted by oil companies, and there is no time for the appropriate review. this is just one example of the law that was made by the industry to serve the needs. congress needs to address these issues as soon as possible and we will work with them. still, preventing this catastrophe in the future will require further study. i have also signed an order --

on the deep water to rise in oil spill. the purpose of this commission is to consider what caused this disaster, and offer options on what safety and environmental precautions are necessary. if the law is inadequate, or if we did not enforce the law, i want to know what was working and what was not working, in the response to the disaster. and with the oversight rubdown. more than anything else in this tragedy, this underscores the need to develop renewable sources of energy. this will reduce the threats to the environment, and this will create a home-grown industry

that will create new businesses and new jobs. we have spoken about doing this for decades. and we have made strides when it comes to renewable energy and energy efficiency. the house of representatives has had a bill that would lead to the clean-energy economy. and are currently plans in the senate, with ideas from democrats and republicans to achieve the same goal. this should serve as a wake-up call, and say that this is time to move forward on the legislation, and to accelerate the competition with countries like china and it is time to seize the future ourselves. i call on democrats and republicans to answer this challenge once and for all. this oil spill is unprecedented as a disaster.

and the fact that the source of the leak -- this is at a place where no human being can go and this is very difficult to stop we are relying on every expert and every bit of technology how to stop this piroplasmosis we will take ideas from anywhere but we are going to stop this. her who i know that this does not lower the feeling navajo outrage -- and every day the i see this continue, i am angry and frustrated. this entire response effort is going to come through the prism of politics. that is not what i care about right now. i care about the containment of this disaster. for as long as this takes, i will use the full force of the federal government's to protect

the citizens and the places where they live. i am going to take some questions. >> thank you. is this on? you have just said that the federal government is in charge. you have said this, repeatedly. how the explain that we are more than five weeks into this crisis. and if i may add -- there are many people in the gulf to feel somewhat abandoned. how you feel about your personal involvement, has this been as much as it should be, privately or publicly? >> i will take the second question, first. the day that this collapsed and

fell to the bottom of the ocean, i had a team in the oval office that first day. the people who believe that we were either slow on the response were lacking urgency, they do not know the truth. this has been the highest priority ever since the crisis occurred. and i am personally briefed every day. and i have probably had more meetings on this issue than how many other issues since the review km and we understood from the first day about this crisis. and we did the reporting on it. when it comes to the moment that this crisis took place, moving forward, the entire white house, has been singularly focused on how we stopped this, and how we prevent and mitigate the damage to the coastlines.

the challenge that we have is that we -- we have not seen something like this before. and so, people will be frustrated until this is over. i understand that. if you are living on the coasts, and you see this coming your way, you are going to be upset, and from your perspective, the response is going to be inadequate until this actual nihon stops. and this is entirely understandable. but from the national incident coordinator, to the most junior member of the coast guard, or the secretary -- or any of these agencies under my charge, they understand that this is the most important thing to get right.

and with respect to the relationship between the government and british petroleum, the united states government has always been in charge of making certain that the response is appropriate. british petroleum, under the act of 1990 is considered the responsible party, which means that they have to pay for everything that is done, to stop the loyally can mitigate the damage. and they do this under our supervision, and any major decisions that they may have to be done under the approval of allen, the national incident coordinator. and the notion that the federal government is on the sidelines, and that we have just been letting them make a whole bunch of decisions, this is simply not

true. what is true is that when it comes to stopping the oil leak, down below, where federal government does not prevent superior technology to british petroleum. this is something, going back to my involvement, two were three days after this happens. i was asking bob gates and mike mullen, what do we have that could potentially help that the other oil companies across the world do not have. we do not have this when it comes to dealing with this particular crisis. one problem is whether the federal government should have this is part of the role of the mission, to take a look at this and say, can we make certain that the oil companies pay for the specific technologies to

deal with this incident when it takes place? and should the response team be under the direct charge of the united states government, were a private entity? but for right now, they have better technology along with the oil companies when it comes to capping the oil well. and when it comes to the surface, we have been much more involved in the skimming, and those have been happening under the direction and we feel comfortable about many steps that have been taken. and there are areas with disagreements. i will give you a couple of examples. originally, there were questions in terms of how effective that this would be, and also, the risks involved. we are 1 mile underwater .

ad hoc-freezing temperatures, and the reaction of the different compounds, and the different approaches had to be calibrated very carefully. and this is when i send the secretary of energy and he brought together braintrust of the smartest people that we had , in academia. and it would essentially serve as the oversight for the engineers and scientists. and they were making calculations about how fast you could do this, without risking the whole thing. in this situation, you have the federal government directly overseeing what they are doing, and allen is giving authorizations and finally, with gold -- we feel comfortable about this, and this is

sufficiently reduced. i also mentioned the second thing, which is that they wanted to drill one relief well well, and the experience is that when you do one of these, you continue to miss the mark. you have to have two to maximize the effectiveness of the relief well. and right now, he is down there because it is his view, that some of the allocations, of the other efforts to cover the shorelines are not as nimble as they need to be. and so, he will be making certain that the resources of the shorelines are there, a media elite. there has never been a time during this crisis in which this administration, up and down the

line, and all of these agencies has not understood the top priority, high mitigating damage, or understanding that if british petroleum was not covering the best options, we would instruct for them to do something different. and so, if you take a look at what has transpired over the last few weeks, there may be areas with disagreements, and these are complicated issues. but overall, the decisions have included the best opinions that we have, and they have been weighing various risks and options to allocate the resources in a way that we will be able who to get the solution as quickly as possible. >> thank you, mr. president.

you say that everything that could be done is getting done, but there are those in the region, and the experts who say that this is not true. jindal was asking for a barrier, and he says that if they had this, that would have stopped this already. and there are industry experts to also say that the tankers have not been used out there, out by saudi arabia. and then, there is the fact that there are 17 countries who have offered to help, and we have only taken this from two countries. so how can you say that everything that can be done is being done, with all of these experts saying that this is not true? >> let me distinguish between,

if the question is, are we doing everything perfectly, the answer is, absolutely not. we can always do better. if the question is, every time that there is an idea, and we are of value winning this, if this is the best option that we have right now, who based on how quickly we manhood stock this region the answer is yes when i met with him, i said, who will make certain that the team will review this, and we will see that they carhop looking at the feasibility of this and if they tell me that this is the best approach for dealing with this problem, we are going to move quickly, to execute.

and if they have a disagreement, as to whether this would be effective or cost- effective, giving the other things that need to be done. we will try to sit down and figure this out. and this is what has happened. we saw the announcement, where there were some areas where this may work. and there are some areas where this would be counter- productive and not agree use of resources. on each of these things that you have mentioned, the job of the response team is to say that the 17 countries have offered equipment, we will of eluate what they have offered, how fast that this can get here, and if this is going to be redundant or if it will lead to the overall effort. this may not actually be better. and the decisions that have been made, based on the best

information available, they may say that this is what we need right now. this may be one week from now war two weeks from now. these options may be more effectively utilized. it is going to be possible, in this operation, that the mistakes have been made, and judgments will prove to be wrong. and people will say in retrospect, if we had done that, this may have turned out differently. even though this may just be speculation. and the thing that i was directing from jennifer, is that this administration maintains a constant sense of urgency about this, and we are examining every recommendation about this, making the best judgment into whether this is the right place to take this. based on the experts that we know about. and on that answer, the answer

will be, yes. >> i want to follow up on the questions about the government and british petroleum. it seems that you have made the case on the technical issue, but on shore, the admiral admitted in the white house briefing that they needed to be pushed harder. they say that this is not who clear, when government should be home in charge. ad hoc why not ask for them to be involved why not ask for them to be hot -- how to step aside. and can you respond to the comparisons to hurricane katrina? >> i will take this question, first. i will leave this to you to make those comparisons. and make judgments on this, pete us go so thinking about how we

solve the problem. when we look back, we see the assessment and people can make a historical judgment. obviously confident that people will believe that they were on top of the unprecedented crisis. and in terms of the shoreline, the way that this has been set up, under the oil spill at the of 1990, this is that british petroleum has contracts with a bunch of different contractors, and this is on file, in the event that there is an oil spill. and as soon as the oil well wind down, but their job is to activate those. and a large number of the people down there are being paid by british petroleum.

the job of the coast guard is to approve, and authorize whenever bp is doing. and what the admiral has said the dead -- said today, is that if the contractors are not moving as effectively as they need to be, then this is already the power of the federal government's to redirect those resources. the coast guard and the military are potentially already in charge, as long as we have good information and we are making the right decisions. and we have the ability to correct these decisions. we do not have to read-configure this, and we have to make certain that for each and every one of these decisions about what will happen, how is this

going to have an impact on the ecology of the area, over the long-term. we have to get this right in every decision. >> part of the purpose of this press conference is about down in the gulf. ultimately, this is the focus, down there, if they are not satisfied, they have to let us know and we will start to question them, about why this is happening. the people who are out there, who were collecting the oil, they can be moved and redirected. and, understandably, people are frustrated.

this is a big problem and even if we have a perfect organization, the spots will be missed. and the oil will go to places where this could have been prevented from going. there will be heartbreaking damage to see. the livelihood of people -- this is going to be affected. the best thing for us to do is to make certain that every decision about how we are allocating the resources has been made based on the best expert advice that is available. i will take one last answer at this. i do not want them going around, doing whatever that they want and no one is minding the store. something that is this big, there will be places where things are falling short. but i want for everyone to

understand, that, we are authorized to direct them in the same way that they can direct them if they were technically being paid by the federal government. we have the authority that we need. steve? >> thank you, sir. on april 23, the government started dispatching this, and he said he recognized the enormity of the situation. we're still having to rush more equipment, and this is unprotected. if you really have to from day one, from the worst-case scenario -- >> part of the problem, when we

look at this example, the plants that have been developed, this is what has been explained. deploying this would have been the right thing to do. making certain that this is happening at the different spots where you see the oil spill of this size. they would be right there and ready to grab. unfortunately, this was not always the case. -- this -- when you come to the response of this crisis, i am confident that the federal government has acted consistently with the feeling of urgency. and when it comes to the time before this accident happened, there was the worst-case scenario of what this could be.

part of this problem was in the way that the agency was structured. they are making decisions in terms of where the drilling could take place. the inspector general's report that came out, this is part of the problem. can salazar -- salazar cleaned up much of this. but much more needs to be done. you have the permitting function and the functions that involve enforcing the difference safety regulations. but i think on many different fronts, you have the complacency when it comes to what happened

with the worst-case scenario. and i will give you another example. this is something that many of you have written about. the question about, how was this that the oil companies continued to get environmental waivers, in getting their permits? it seemed that the way that the process was working, there is the environmental review for this portion of the gulf, and whether there should be a lease on this, or not. this is the ongoing environmental evaluation. and this is broken up into different sections. when it comes to a specific company with exploration plans in this area, they are going to drill right here, in this spot. congress has mandate ad hoc had only 30 days could be allocated

tajo who before the answer was given. and this was by law. their hands were tied. this became a habit, that was predating my administration. you gave the environmental waiver. he could not complete this in 30 days. what you have -- you have a lot of different aspects about how the oversight was exercised -- and this was very problematic. the mission is moving forward, and this examines why this happened, and how this was perceived in a safe and effective manner. what is happening with the worst-case scenario to prevent something like this from happening.

the production of domestic oil -- we do not have this to prevent the crisis from happening again. this is going to take some time, for the experts to make those determinations and this is important to keep in place. and we will talk about the moratorium of the other issues. >> elizabeth resigned today. was she forced out? and if so, why did this happen, and will other heads roll as we continue on? and with regards to the management service, the secretary basically was blaming the bloodshed and destruction for the relationship that was there. you said, for one decade, most

of those for the bush administration, there has been the relationship that prevents them to drill -- that allows them to drill. you knew about this cozy relationship, but you continued to give permits under questionable circumstances. is this fair to blame the bush administration? >> salazar came in, and he began to clean house. but the culture was not fully change, and absolutely take responsibility. there was sufficient urgency, in terms of how those changes needed to take place. and there is no evidence of some of the corrupt practices -- that this took place under the current administration. but the culture in which the oil companies were allowed to get

what they wanted without oversight regulation, this was a major problem. some of this was the strength of the law. and should have adopted some of those constraints. now, with respect to her -- i found out about the resignation today. salazar has had the testimony throughout the day. i do not know the circumstances. i'll tell you what i have said to salazar. we have to make certain, if we are going forward, that the federal agencies in charge with overseeing safety and security is operating at the highest level. i want to have people in there who are operating at the highest level, and not making excuses when things break down. and i have confidence that he

can do this. >> thank you, mr. president. we are learning that the oil has been gushing as much as five times the initial estimates. what does this tell you and the american people about the extent that they can be trusted on any of the information that they have provided, for the oil spill and any of this information? >> their interest -- these interests are aligned with the interest of the public to the extent that they want to stop this. this is bad for business and the bottom line. and they will continue to pay a lot of damage. and so, it is fair to say that they wanted this covered as

badly as anybody. and they are wanting to minimize the damage as much as possible. i think that this is a legitimate concern, to question whether if their interest is aligned with the public interest. i mean, their interests may be to minimize the damage to the extend that they have better information than anyone else. and so, i believe we should verify whenever they have to say about the damage. i believe this is where we fell short. i am not contradicting what i said before. people were working as hard as they could, and doing the best that they could. i believe that when the initial estimates came that there were

5,000 barrels going into the ocean every day. this was based upon satellite imagery and satellite data, that would give a rough calculation. and they already have the camera that was down there. this was not fully forthcoming, in terms of what they look like and if you set this up with time-lapse photography. and they could make a more accurate determination. the administration was pushing them but they should have done this sooner. and i believe that this took too long to stand up with tracking this group, that has now made the more accurate ranges of calculation. keep in mind that this did not

change the response. and as i have said from the start, we understood that this could be really bad. we were hoping for the best, but preparing for the worst. these are not the steps that we would have taken, in terms of trying to cap the oil well, or preparing to make certain that we could minimize the damage. all of the steps would have been the same that the well was coming out faster. eventually, we would have done better information because, by law, the federal government would be charging them for the damage that they have caused. but there was a delay of several weeks that i believe -- i believe that this should not have happened.

helen thomas? >> when are you going to get out of afghanistan? what is the real excuse? and did not tell us that they will all come here. >> the reason that we originally went to afghanistan was because this was the basis of where the attacks were launched that killed 3000 people. i will get to your question. i just want to remind people, we went there because the taliban were harboring al qaeda. al qaeda escape capture, and they are in the border regions between pakistan and afghanistan. they have affiliate's. they provide safe harbor, and

they are increasingly willing to conduct their own terrorist operations. increasingly, this is directed against the western targets. it is absolutely critical that we dismantle that net worth of extremists, that are willing to attack us, and they are absolutely- they're a thread. i would not be deploying young men and women into harm's -- into harm's way if they were not a threat to us. the strategy from gen. mccrystal is that we will clear out the strongholds of the taliban, and we will strengthen the capacity of the afghan military. and we will get them in a way that will allow us to start

drawing down the soldiers but continue to provide support for afghanistan to create a stable government. so that they are more effective partners in dealing with the extremists. this is a messy process, but we're making this in part because the young men and women under the supervision of gen. mccrystal and the coalition partners are making enormous sacrifices and we're starting to make progress in building the capacity that will allow for us to draw down. jackie collins, new york times. >> thank you very much, mr. president. i want to follow up on the i want to follow up on the exchange that