Saturday, May 6, 2017

Strange is strange

Image result for Luther Strange


I have issues with Luther Strange. Strange is Alabama’s recent Attorney General who was appointed by our disgraced governor to replace Jeff Sessions in the US Senate.
Our new, grandmotherly governor (who I suspect is tough as nails) has decided it all looked a little fishy and has scheduled a special election rather than letting Strange solidify his position for the next 2 years. As you will see, I am not enthusiastic about Mr. Strange.

The first issue is the well documented strange relationship between Strange and the deposed governor. The state house of representatives was hot to impeach now ex-governor Bentley. But Strange, as AG, told them to hold off there might be an investigation going on. A year later, there was still no action from the AG and the AG was mum on his maybe, maybe not, investigation.  Mean time Senator Jeff had moved on to be the US Attorney General and Alabama needed a senator. Lots of qualified people “applied” but isn’t it strange that Bentley, under fire, selected Luther Strange? Almost immediately after Strange moves on to the senate, the AG’s office provides evidence against Bentley.

The second issue is the strange settlement with BP in the oil spill law suit. AG Strange was instrumental in those negotiations. I should point out that many environmentalists were relatively happy with the settlement. They were happy to “get what we could’ rather than risk the uncertainty of continuing with the trial. Here are some facts and opinions that suggest AG Strange traded the environment for the Alabama general fund

The state of Alabama was involved in two law suits with BP. One was  the well-publicized Clean Water penalties being pursued by all the affected states. In the other suit Alabama was suing for lost tax revenues. These loses were almost exclusively from the 2 coastal counties (Alabama has 65 non-coastal counties). 
Alabama’s claim was $167 million.

Under the separate Clean Water lawsuit, Alabama’s share could have been as much as $1.6 billion if the judge imposed the maximum fine available.  No one could be sure, but the judge seemed to be leaning towards a high settlement rather than a low settlement.

Now the fun begins. Under AG Strange, Alabama accepts BP’s offer in the lost tax revenue case for $1 billion or about 6 times what Alabama claims. Seem strange doesn’t it? Why would BP do that? Easy. In return, Alabama (along with other states) agrees to accept a settlement in the Clean Water suit. Alabama’s share turns out to be $599 million not the potential $1.6 billion. Why would Alabama do that? It’s simple. If Alabama got $1.6 billion from the Clean Water suit then it would have been mostly spent on environmental projects in the two coastal counties and the spending would be overseen by a committee structure not controlled by the Alabama legislature. Under the settlement, as accepted, $1 billion goes to the general fund where the legislature controls every penny and the other 65 counties get some of the action. And in fact the two coastal counties have had a hard time getting much of the $1 billion despite being the center of the damage.

Why does BP care since the total to Alabama is about the same in either case?  It’s all about tax deductions. BP cannot deduct penalties paid for Clean Water violations but can deduct payments to states.


Isn’t it Strange how these things work out?  

6 comments:

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