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Would federal intervention in oil disaster make U.S. liable?

By Ed Hornick, CNN
President Obama picks up balls of tar while touring the beach May 28 in Port Fourchon, Louisiana.
President Obama picks up balls of tar while touring the beach May 28 in Port Fourchon, Louisiana.
  • Increasing calls heard for federal government to take over oil cleanup in the Gulf
  • CNN analyst says administration may face a tough legal case against BP if it does so
  • An attorney suggests emergency situation would favor government in later legal action
  • Justice Department launches a criminal and civil investigation

President Obama goes one-on-one with Larry King to talk about the oil spill, economic turmoil and war. Don't miss the president on "Larry King Live," 9 p.m. ET tonight only on CNN.

Washington (CNN) -- Nearly seven weeks into the Gulf of Mexico oil disaster, the Obama administration is facing increasing calls to take over the cleanup operation from beleaguered oil giant BP.

While the government has the legal means of doing that, the consequences might ultimately hurt the government.

On Tuesday, Attorney General Eric Holder announced the Justice Department has launched a criminal and civil investigation into devastating spill and BP's actions. He said the investigation, which began weeks ago, would be comprehensive and aggressive. He also said federal officials will prosecute anyone who broke the law.

CNN legal analyst Jeffrey Toobin said an intervention into the cleanup would only hurt the government's litigation against BP.

"Undoubtedly, one of the defenses of the BP people here, both the corporation and the individuals involved, is going to be, 'Hey, the federal government was involved with this every step of the way. You knew what we were doing. You approved it. You approved all our actions. How can you turn around and prosecute us?' "

Toobin added that while BP's potential argument might be politically infuriating, it is actually a good legal argument in court, "which would make a case like this pretty difficult to prove."

President George H.W. Bush, during the Exxon Valdez tanker spill off the coast of Alaska in 1989, turned down a request by Alaska's governor to declare the incident a major disaster. That declaration, under the Stafford Disaster Relief and Emergency Assistance Act, would commit federal resources and control over the cleanup efforts.

According to the nonpartisan Congressional Research Service, the rationale for the turndowns was that a declaration by Bush "would hinder the government's litigation against Exxon that promised substantial compensation for the incident."

Video: Jindal: Do this or get out of the way
Video: Reich: Govt. should take over BP operations

The CRS report, which is prepared for members of Congress, said that such a declaration carries expectations that are difficult to manage, which "may be a consideration for the oil spill in the Gulf Coast."

Camilo Salas, an attorney specializing in environmental issues and based in New Orleans, Louisiana, said the law is on the government's side.

Federal statutes provide that a government takeover of the cleanup would not remove the well's operator of any responsibility, Salas said.

"So I don't think that if the government takes over then, BP can say 'Well, you took over, now our involvement is over and we have no liability or responsibility for anything that happens going forward,' " he said. "They still would be liable under the law."

The government has a number of legal paths it could pursue.

Holder said Justice Department lawyers are examining possible violations of the Clean Water Act and the Oil Pollution Act of 1990. He also said prosecutors are looking into potential violations of the Migratory Bird Treaty and Endangered Species Acts, which provide penalties for injury and death to wildlife.

Read more on the DOJ's investigation

Under the OPA, "offshore facilities are required to maintain evidence of financial responsibility of $150 million and vessels and deepwater ports must provide evidence of financial responsibility up to the maximum applicable liability amount. Claims for removal costs and damages may be asserted directly against the guarantor providing evidence of financial responsibility."

William Buzbee, a law professor at Emory University and director of the Emory Environmental and Natural Resources Law Program, said the case could set a precedent.

"If the government acts and then the blame game starts -- and people try to figure out who should pay -- what the government does or doesn't do will probably influence how future regulatory proceedings and litigation proceed."

Buzbee, a member of the regulatory think tank Center for Progressive Reform, added the idea that the government would be liable for something wrong is especially difficult if the government is acting in an emergency setting.

Meanwhile, calls for governmental action and new regulations are growing louder.

"The president should temporarily take over BP's Gulf operations," said Robert Reich, a former Labor Department secretary under President Clinton. "We have a national emergency on our hands. No president would allow a nuclear reactor owned by a private for-profit company to melt down in the United States while remaining under the direct control of that company. The meltdown in the Gulf is the environmental equivalent."

Reich, writing on his website, has called for BP to be put under temporary receivership, which he said gives the government authority to take over the operations in the Gulf until the spill is stopped.

"This is the only way the public will known what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP to use a different one if necessary and be sure the president is ultimately in charge," he wrote.

While Obama has the legal means to conduct a takeover, a big question is centered on whether it would help the situation. Administration officials, and outside experts, said the government lacks the technology to effectively clean up the spill. BP, they said, has the financial and technological means.

Even the president's critics recognize the limits to what the government can accomplish.

"They can fire BP and take it over," Sen. Lamar Alexander, R-Tennessee, said Sunday on the CBS program "Face the Nation." "But the truth is, the federal government probably doesn't have the capacity to do that."

Obama indicated Tuesday the laws may change or be created as a result of the disaster, especially when it comes to regulation.

Obama, who recently created an oil spill commission through an executive order, noted that the panel is authorized to hold public hearings and "request information from government, from not-for-profit organizations, and from experts in the oil and gas industry ... as well as from relevant companies, including BP, Transocean, Halliburton and others."

Christopher Mann, an environmental expert at the nonpartisan Pew Environment Group, said the commission will likely call for stricter regulation and new operating procedures.

Because of deregulation in past presidencies, "we're paying the piper. ... Sooner or later, stuff happens. It's just a shame it had to happen in such a huge way," he said.

"If any good can come from this, it could be the push for more balanced regulation that doesn't tip so blindingly for production -- but one that considers the real environmental risks and plans for worst-case scenarios," he added. "In light of an accident this horrendous, you have to really wonder if it's worth the risk."

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