Obama Urged To Use Spill Fines To Restore Gulf

President Barack Obama's point person on the Gulf coast's restoration will recommend paying for it with some of the billions of dollars in civil penalties that could be collected from companies responsible for the oil spill.

That recommendation by Navy Secretary Ray Mabus will be in a report released Tuesday in New Orleans, a portion of which was obtained by The Associated Press.

"In order to help address the damage inflicted upon the region, dedicated recovery funds are absolutely essential," the report reads.

A senior administration official, speaking on condition of anonymity because the announcement was not yet made, said the White House has already endorsed the proposal and President Barack Obama will ask Congress to dedicate "a significant amount" to the region's recovery.

"This is the dedicated money that kickstarts this thing," the official said.

Dedicating fines levied against BP PLC and other companies involved in the April 20 accident to restoration and directly to Gulf states, which the report also calls for, will require a change in law. Currently, Clean Water Act fines go into a trust fund to pay for oil spill cleanups.

But if successful, it would go a long way to solving what has been a critical problem in past efforts to restore the coast - money.

The report intentionally doesn't say how much of the penalties should be used, leaving it to Congress.

Sen. Mary Landrieu, D-La., and other Louisiana lawmakers are pushing legislation that would require at least 80 percent of the civil and criminal penalties charged to BP, and possibly other companies, to be returned to the Gulf Coast.

That could end up being tens of billions of dollars. Maximum penalties under the Clean Water Act could be up to $1,100 per barrel of oil spilled. If BP is found to have committed gross negligence, those fines could rise to $4,300 per barrel. That means BP, along with other companies found responsible, could face total penalties of $5.4 billion to $21.1 billion under the law.

"I certainly welcome the administration asking Congress to dedicate the lion's share of BP fines to Gulf Coast recovery," Sen. David Vitter, R-La., said in a statement issued Monday after he met with Mabus. But Vitter said he would work to direct the bulk of the money to Louisiana, which he said suffered most from the spill.

The report also urges the president to ask Congress to set up a Gulf Coast Recovery Council to manage the money set aside for restoration. In addition, it asks the president to appoint a single federal lead for restoration and create a task force to manage the government's transition from response to recovery.

Before the announcement in New Orleans, the oil spill commission appointed by Obama will hear Tuesday from state officials on what they think is needed to restore the coast.