Rep. Steve Cohen on 'Your World'

This is a rush transcript from "Your World With Neil Cavuto," June 15, 2010. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: Well, BP’s getting the chill. In four hours, it officially gets the bill.

Welcome, everybody. I’m Neil Cavuto.

And the president today saying that he’s going to make sure that BP pays. What BP still does not know is how much. Try $37 billion to start. That’s how much some House Democrats figure all this Gulf mess is costing just so far, 32 of them today dashing off a letter to BP’s CEO, saying focus on those getting hit and not shareholders getting whacked. They say the president is on board and will in fact say so tonight.

Tennessee Congressmen Steve Cohen, one of the Democrats who signed that letter, with me right now.

Good to have you, sir. Thanks for coming.

REP. STEVE COHEN D-TENN.: Neil, nice to be with you.

CAVUTO: These figures are all over the map, Congressman. One has it just set up a $20 billion contingency fund, but if your cost estimate is right that this is really closer to $37 billion, $38 billion in damage-related costs, obviously, that’s an open credit line, right?

COHEN: Well, it’s a tremendous amount of money.

BP lied to us about how much oil was escaping. We now know it’s closer to 25,000 barrels a day. And if you take $3,000 a barrel as their penalty for gross negligence, it’s a tremendous amount of money, not even considering what the states are going to lose in sales tax revenue, what businesses lose. And the 11 lives, what are they worth?

The damages to Louisiana, Mississippi, Alabama and Florida are phenomenal. And the American public needs to be protected.

CAVUTO: All right, but where do you cap that protection? Is it $20 billion? Is it $37 billion? Where?

COHEN: I don’t think it should be capped at all. I think it was wrong to have the $75 million cap. We’re trying to change that to have it be really an unlimited cap.

Only unlimited caps will give the oil companies the incentive to drill where they cannot have unlimited damages. They drilled in places where no company had ever drilled before. They did all their research in how to drill, but nothing on how to contain a possible problem. They thought they were failsafe.

Now they have wreaked havoc all over the Gulf of Mexico and the Southern United States. And it’s partly because they knew their damages were limited. Now, they say they will pay everything, they will pay legitimate claims. But I’m a lawyer, and I know legitimate is a lawyer- like adjective for, we will get around to it. We will fiddle with you in court, we will negotiate, and we will be like Exxon and pay less than we should.

It’s also a pejorative for you, right? I mean, you can decide someone hundreds of miles away is a legitimate case, and has a legitimate money gripe.

But — but that could just be throwing added burden on top of added burden, and you push too much, BP, with all that money, might go away. It’s happened before, hasn’t it?

COHEN: Oh, they certainly could go away. That’s why I think we should even have a receivership and take BP USA and put them into receivership. I don’t trust them one iota.

And I don’t think the American public does either. They have lied to us about this spill from day one. They have been more interested in capturing oil than stopping the leak.


CAVUTO: No offense, sir, but you don’t have the power or the constitutional right to do that.

COHEN: I don’t know that we don’t. If the American public and the American interests are at stake, I think we can go into court and show that the likelihood of being reimbursed for debts that are going to be owed the people and the governments, that you can ask that a court put that company into receivership to protect American assets and American people. I think we can do that.

CAVUTO: Yes, but I’m sure you are aware that you push a company so far — and I’m, believe me, no apologist for BP — but there’s a limit even to a wealthy company that could lose potentially tens of billions on this.

And you might assume it has just an endless reservoir of money available. But as we have seen in prior cases where corporations have been targeted, sometimes by very frivolous lawsuits, having nothing to do with the serious ones that I’m sure you want addressed, sir, it pushes the company right over the edge, the company, whether in receivership or not, can only pays pennies on the dollar, taxpayers foot the rest, victims get nothing.

COHEN: Well, that could happen in come cases, Neil.

But, in this case, if we put them into receivership, we have got their assets. If we take the — the president believes he has the power to require them to put certain moneys and then we can follow up on it in an escrow. Either way, we protect the consumers, because we take that money.

They have got cash on hand. They have got enough money, they think, to pay $2.5 billion this quarter in dividends, $10 billion in a year. That’s not their shareholders’ money. It’s the money that should be going first and primarily to the people whose lives they have ruined.


CAVUTO: But that is their shareholders` money. They would be nothing without the shareholders` money. Now, I know you don’t like shareholders. And I know you don’t like...

COHEN: I love shareholders. I am a shareholder. And I love...


CAVUTO: Congressman, since you have been going after their dividend, for whatever reasons, whether you find them justified or not, and chasing the company either to get rid of it or curtail it, a number of investors have simply been bailing out. This stock has been cut in half.

Now, that’s $90 billion worth of capitalization that is just frittered away. Now, you might not care, but that’s the — that’s the means by which BP is going to address these financial concerns. And with the best of intentions, are you concerned you’re sucking them dry, so that they can’t do that?

COHEN: In no way. And, in fact, I have seen opinions from scholarly attorneys and experts on this subject that they can’t bankrupt their debts, that their assets will also be responsible...


COHEN: ...receivership.

CAVUTO: How do you know? How do you know?


CAVUTO: What scholar is an expert on this, assuming by constantly going after a company’s finances, and then, in your case, trying to marshal the resources to put it under protectorship or receivership, something that the Constitution says is a no-no, by the way, what gives you or these scholars the right to say, we can keep pushing, and they can keep paying? Eventually, it’s like knocking blood out of a stone.

COHEN: I don’t know that that’s the case. And BP has said they want to pay all legitimate claims. We will see what they do. I don’t believe them.


CAVUTO: Yes, but we did this with Manville. Remember, a couple of decades ago? Push, push, push, until Manville went bankrupt. We did it with Texaco for a while. Push, push, push, until they fell into the arms of an acquirer.

Believe me, I understand your rage and your concern, Congressman. I’m just saying, be careful what you wish for. You might have a dead company.

COHEN: Well, I think — I suspect we’re going to have a dead company anyway. I think that BP’s going to do all they can not to pay their debts, to abscond, to find a way to merge with another company.


CAVUTO: What have they done to indicate they’re not about going to pay their debts?

COHEN: They haven’t been honest about anything to do with this from day one. They have — for years, they have had bad safety workers. They haven’t worried about the research they should have done on how to contain such a leak.

CAVUTO: Actually, in the Gulf, they have one of the better safety records.

Again, I’m not — I’m not saying they’re saints, but I’m saying let’s say there are plenty of co-sinners. And I’m just wondering, by you jumping all over them, again, with justifiable rage, you have got to be careful because the backup to BP is us.

COHEN: I understand what you’re saying, Neil, and I understand that.

But I do think they have got assets that, if we can get control of them, we can guarantee that those moneys will go to make restitution or compensation for the people that deserve it. That is a catastrophe unknown in the world. We don’t know the end result of it.

And Memphis, my hometown, is not far from the Gulf Coast. That’s our Riviera. And we don’t want to see it destroyed. And we don’t want to see BP get away with the profits.


CAVUTO: All right.

Congressman, always admire your coming on. Steve Cohen, Democrat of Tennessee, thank you, sir.


COHEN: You’re welcome, Neil.

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