Louisiana State Treasurer on 'Your World'

This is a rush transcript from "Your World With Neil Cavuto," June 16, 2010. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: Again, the focus here for us is on the money and making sure it gets to the people who need it, not necessarily those who in the meantime, take advantage of it. And that’s why we watch this money very, very closely.

So, again, guys, it’s not a right or left issue. It’s not a red or blue issue. It’s a green issue, and a lot of money here, and you know how you can go through it very, very quickly here.

My next guest is worried that BP might not survive the spill financially. That could be a big uh-oh for everyone else, who expects BP to pay for everything. Now, he’s hoping for the best, but, right now, he’s planning for the worst.

I’m talking about Louisiana State Treasurer John Kennedy joining me.

Treasurer, very good to have you.


CAVUTO: You know, with of all these doors, financial doors, being closed on BP, some very deservedly so, others maybe worrisomely so, you have to wonder whether the revenue streams that BP could count on, it might no longer be able to count on, and then the monies we expect from BP as a result, we might not be able to count on either.

KENNEDY: Well, I am concerned. It’s my job to be concerned.

BP is an $81 billion company. Those are its net tangible assets. But we don’t know what the damages from this spill are going to be. The Gulf region, the Gulf states contribute 16 percent of the nation’s employment and 17 percent of its gross domestic product. The damages could be $40 billion, $50 billion, $70 billion.

I’m not saying BP will take bankruptcy. I hope it doesn’t. I think it would be unconscionable if it did. But, at the end of the day, BP will do what is best for BP, and the people of Louisiana need to be prepared in the event that that happens.

CAVUTO: Yes. In fact, you have told your governor, Bobby Jindal, much the same, that we have to have a fallback or contingency plan here. What would that be?

KENNEDY: Well, my immediate concern is the war, the cleanup. I don’t know who is in charge of it. The president says he is. And BP says it is. They’re both, of course, playing a role, regardless of who is in charge.

And the fact that we don’t know is part of problem. If BP chooses to seek protection of the federal bankruptcy laws, and everything ceases, it’s not longer part of the cleanup, we need to be ready to go. By we, I mean the state of Louisiana and the federal government, if they will join us, so that we don’t miss a beat, because we don’t have days, weeks, hours to stumble around.

CAVUTO: Well, where will the money come from in — again, you call it the worst-case scenario? BP either goes belly up, it’s taken over, files for outright bankruptcy or even Chapter 7. Then what? What do you want to see happen?

KENNEDY: Well, that’s one of the things we need to talk about. We need to have a budget, which means we need to know what BP has been doing. We need to talk about where the money’s going to come from.

Does the state borrow it under Article 7, Section 6A? Do we seek a line of credit?

CAVUTO: Well, what has the governor told you, Treasurer? What has he said? He’s a pretty smart guy.


KENNEDY: The governor has said — the governor has said he’s working on a plan. And I take him at his word.

CAVUTO: Well, he better work fast. He better work fast. These are hyper conditions.


KENNEDY: My only point — my only point is, we need to be ready. Look, the same principle applies to the Gulf and hurricanes. We’re in hurricane season. I hope a hurricane doesn’t come near Louisiana or anybody this season.

But, if it does, whether you think it’s a probability or a possibility, we need to be ready. We also need to have a contingency plan against BP going into bankruptcy. And I know BP has said it will not, but this not about trust. It’s about verification. An American president once said, I trust everybody, but I always cut the cards. This is about cutting the cards.

CAVUTO: Trust, but verify. Very good point.

Treasurer, thank you very much.

KENNEDY: Thank you.

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