July 8, 2015 by  
Filed under Blogs, Hot Button / Lynn Ashby

           THE SHOW ROOM – As expected, I found you here, checking out the 2016 Lamborghinis. I am thinking the same, or maybe a round-the-world cruise. The kids can pay off their own student loans. I am discussing, of course, the very large fortune that is coming our way – our share of the $18.7 billion that BP is going to pay out for its big oil dump in the Gulf off the Louisiana coast. Of that pile of cash, Texas is going to receive $788 million. There are currently about 27 million Texans, so that breaks down to, uh, 29 or 30 something for each of us. Maybe it’s $30,000 or $29,000. Or perhaps $29,

Before you pick the color of your Aventador (at $548,800 a steal), let’s discuss a few points. First, it is not really $788 million in cash BP is shoving across the table. The money is to be distributed over the next 15 to 18 years. Eighteen years ago was — don’t rush me — 1997, or maybe 23,000. Can anyone remember any politician’s or businessman’s promise from then? Of course not, nor or we supposed to. By 2028 the Deepwater Horizon disaster will be only an oil slime covering some forgotten pelicans. Like the Texas Lotto that promises a winning pot of $1 million, you have to take the payout over 20 years, otherwise it’s much less, then deduct the taxes, etc. and that million isn’t anywhere near a million. Also, some of this BP money has already been spent. And BP being a British company and formerly British Petroleum, we’ll probably be paid in euros or pounds or quid. Don’t forget the lawyers’ fees, because they certainly won’t.

However, congratulations to our Texas lawyers for getting all that loot considering our Gulf shores didn’t really suffer that much harm from oil scum. We had a few tar balls wash up close to Louisiana, some fishermen were inconvenienced, maybe even hurt financially, but in no way did Texas suffer $788 million in damages. Still, grab the money and run. Then there is the aspect of where to spend the money. Some of it has already been earmarked: $70 million for conservation, more for campsites, boardwalks and showers, plus research projects at Texas A&M-Corpus Christi and UH. Almost half of these particular funds, $34.5 million, are being spent to buy a ranch. It’s the 17,351-acres Powderhorn Ranch along the coast between Port O’Connor and Port Lavaca, and far from the oil spill. I think the idea is that within five years the land will become 17,351 acres of great bird hunting for state officials. Just how one rationalizes spending money for oil spill damages on classrooms and showers eludes me. Maybe the showers are for oil-soaked dolphins. The rest of that $788 million is up for grabs, and we can bet that the grabbers are already getting in line, hiring lobbyists and dolling out campaign donations.

Fortunately, in this feeding frenzy we have a precedent, which we can learn from: The Big Tobacco Windfall of 1998. Under the agreement between the tobacco industry and most of the states, they would receive more than $206 billion over the next 25 years. Texas’s share was $15.3 billion (later increased to $17.3 billion), only behind California and New York. The money to the states was to be spent on health issues, anti-smoking messages mostly for teenagers, and associated causes.

Instead, the states have used the windfall for all sorts of unrelated projects, In Alaska, $3.5 million in settlement money was spent on shipping docks. In Niagara County, N.Y., $700,000 went for a public golf course’s sprinkler system, and $24 million for a county jail and an office building. Colorado has spent tens of millions of its share to support a literacy program, while Kentucky has invested half of its money in agricultural programs. And in North Carolina, in the ultimate irony, $42 million of the settlement funds actually went to tobacco farmers for modernization and marketing. Here in Texas, the state says it is spending the tobacco money as it is supposed to, but I haven’t seen any anti-tobacco ads, maybe because I’m not a smoking teenager. Anyway, keep your eye out for new golf course’s sprinkler systems.

According to the Austin Chronicle, the American Cancer Society (ACS) believes that tobacco control should be the first priority of tobacco settlement dollars. “Texas has earmarked $10 million a year to tobacco prevention programs, in the form of a $200 million endowment with only the interest being spent on the programs. The ACS believes that a fully-funded effective program would require about $60 million a year in a state the size of Texas (approximately $3 per capita.)”

Now let’s talk legal fees. When it comes to crafty lawyers, Texas is Numero Uno. With the tobacco settlement finally done, the lawyers descended, demanding fees which in some cases were ridiculous, others were only outrageous. By judge-shopping, attorneys received such generous payouts that some states sued to reduce them. Atlantic Monthly noted that the Massachusetts lawyers in that state’s tobacco case had already been awarded $775 million, an average of more than $7,700 an hour, and a key firm was suing for its share of an additional $1.3 billion. Texas scored the highest per capita legal fees award with $3.3 billion being divided among five lawyers plus two out-of-state attorneys, but at the end Texas lawyers were suing one another for a bigger chunk of the pie. So much for our anti-smoking campaign.

Then there is Katrina, and I say “is” rather than “was” because we shall be hearing about that disaster for years, mainly concern[ng lawsuits. My application for $5 million in yacht repairs was turned down because the judge said my rowboat had been deemed “unfit even for dry land” by the Coast Guard. Like they know anything about boats. So don’t order that Lamborghini just yet. You probably need the advice of a good lawyer.


Ashby’s share is at







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