Dead and dying coral reefs in Gulf of Mexico blamed on April oil spill

News that large swaths of dying coral reefs have been found southwest of the wrecked oil rig responsible for the largest offshore spill in U.S. history should come as no surprise to anyone. Logic dictates that the effects of the colossal April 20 blowout and spill will be far-reaching and catastrophic, the protests of oil and fishing interests in the Gulf of Mexico notwithstanding. Scientists studying the spill's aftermath said the damage to the reefs was almost certainly due to exposure to toxic chemicals like oil, according to the New York Times. “I think that we have a smoking gun,” said Charles Fisher, a marine biologist from Pennsylvania State University heading a U.S. government-sponsored scientific mission to the Gulf. “The circumstantial evidence is very strong that it’s linked to the spill.” The damaged coral was found Tuesday by the government expedition, which launched a submersible robot to view the coral and obtain samples. Scientists expect to return to the Gulf floor in December using a Navy submersible that can carry three people to depths of 15,000 feet, the newspaper said. An estimated 5 million barrels of crude flowed into the Gulf for months after the Deepwater Horizon oil rig exploded in April, killing 11 workers.

U.S. officials say BP oil well in Gulf of Mexico has finally been plugged

Finally, there's some good news from the Gulf of Mexico. After a nearly five-month nightmare of uncertainty, the U.S. Interior Department has confirmed that the BP oil well that spewed millions of gallons of crude oil into coastal waters has been permanently plugged, according to the Cable News Network (CNN). The largest oil spill in U.S. history devastated one of the richest fishing and tourism regions in the United States, and years of even more uncertainty remain over whether Gulf wildlife and the area's fishing industry will ever recover. "We can finally announce that the Macondo 252 well is effectively dead," said former Coast Guard Adm. Thad Allen, who is overseeing the U.S. response to the disaster. The spill began April 20 with an explosion on the BP-leased oil rig Deepwater Horizon that killed 11 workers. BP, the international oil company formerly known as British Petroleum, has agreed to pay the costs of capping the well, cleaning up the environment and compensating the thousands of people and businesses whose livelihood depended on the Gulf. BP put up $20 billion to compensate individuals and companies in the region at the request of U.S. officials, but the final cost of the spill and resulting damage has been estimated at $32 billion. Of course, the economic cost of the disaster is not the only cost to the United States. The spill exposed gaping holes in U.S. regulation of offshore drilling, the effects of which will likely reverberate in the industry for decades. Investigations into the cause of the disaster and the federal government's response are ongoing by members of Congress and at least two U.S. agencies, and lawsuits seeking damages are likely to be in court for years.

New GM venture raises uncomfortable questions

Is anyone else uncomfortable about Friday's announcement by post-bankruptcy General Motors, still the largest U.S. automaker, that it would create new venture capital firm to invest in new technologies? The new GM, now 61 percent owned by the U.S. government, said it would put $100 million into a new company to help startup companies working on renewable fuels, advanced materials and other automobile-related ventures. The announcement, reported by the New York Times, came amid an almost unbelievable run of good fortune for the company, which was able to shed a list of troubled subsidiaries in its short trip to bankruptcy court. GM reported its first quarterly profit in three years while its chief rival, the usually unimpeachable Toyota Motor Co. -- is still preoccupied with the discovery of manufacturing defects that caused the recall of millions of cars worldwide and resulted in millions of dollars in fines, so far. “We are constantly looking for ways to deliver the best technology for our customers,” Stephen Girsky, a G.M. executive, said in a written statement. “Our goal is to nurture these innovative technologies to help bring them to market, and to ensure our customers have access to the best technology available.” Spokeswoman Sherrie Childers-Arb told the Times that the new subsidiary, General Motors Ventures, had already identified companies to invest in. But will it be the new, nimble, embarrassed and chastised GM that will be buying into startups with promising ideas, or the old GM that wants to buy new companies to block their products from gaining market share? That's what happened, we still can recall, to the early electric car and, even earlier, to transit systems across the country.

General Motors claims profit -- but only if discounts its expenses

Maybe it was naive to have assumed that General Motors, the top U.S. automaker, would have been required to stop playing games and be upfront about its finances as a condition of being saved from the junkyard by billions of dollars from U.S. taxpayers. Well, at least the naivete was short-lived. Today's release of its first detailed financial statement since emerging from bankruptcy protection shows that GM has not forgotten the sleight-of-hand that enabled it to pretend to be solvent for years despite epic mismanagement that caused what was then the world's largest automaker into bankruptcy. Focusing on what it called "positive cash flow of $1 billion since its bankruptcy," GM -- now known as General Motors Co., instead of General Motors Corp. -- said it wasn't counting the more than $4 billion it has to spend to settle with the United Auto Workers union to pay with retiree health benefits, according to the New York Times. If this is an example of what the company called its "fresh start" accounting principles since bankruptcy, it looks like there was nothing learned from its near-collapse as well as nothing to be learned from its official reports. Maybe what GM is doing is standard practice for bailed-out businesses, but it's no more reassuring -- especially since the company is now more than 60 percent owned by the U.S. government. “We don’t need to make that much improvement to get to profitability,” GM Chief Financial Officer Christopher Liddell told analysts and reports in a conference call, the Times said. “It’s getting close to break-even if you get rid of those one-off items that happened in the fourth quarter.” Well, any company would post a profit if it left losses off its balance sheet, right? But would that paint an accurate picture of its financial health? Still, many analysts said GM was considerably healthier than a year ago. “It would be a really impressive achievement if they were able to make a profit,” Rebecca Lindland of IHS Global Insight told the Times. “They’ve been able to do an awful lot, and all of those things should lead to a profitable picture.” GM said it would finish repaying $8.3 billion in loans from the U.S. and Canadian governments by June. The other U.S. automaker that took billions in bailout cash from the government, Chrysler Corp., is expected to release its first financial statement since its bankruptcy later this month, the Times said. Narayanan Jayaraman, a finance professor from Georgia Tech's College of Management, told the Times that he thought GM's prospects were better than Chrysler's. “Between G.M. and Chrysler, if I had to place a bet, I would place it heavily on G.M.,” Jayaraman said. “They seem to be doing the right things. They have some headwinds, so help from the economy would be good, but even in the absence of that they can do well.” He said the government could begin selling the millions of dollars in GM shares no earlier than 2011, after GM has "two or three quarters of profitability." GM's bankruptcy wiped out $83 billion in liabilities, the Times said.

New York State steps into Bank of America bailout as feds settle

At least somebody in government still thinks it's their job to look out for the beleaguered U.S. taxpayer. We're speaking, of course, of New York Attorney General Andrew Cuomo, who has sued Bank of America for securities fraud over its 2008 merger with Merrill Lynch on the same day that federal authorities who pumped billions of taxpayer dollars into the bank settled their complaints for insignificant amounts of cash. In a lawsuit filed Feb. 5, Cuomo accused the bank and its two top officers of securities fraud in connection with the merger, claiming they misrepresented the financial condition of Merrill Lynch to shareholders as they were voting on whether to approve the deal, according to the New York Times. In the suit, Cuomo said the bank failed to reveal $16 billion in losses to shareholders but told federal officials that the losses necessitated an additional $20 billion from the Troubled Asset Relief Program, set up by the U.S. government to help financial institutions weather the global financial crisis. “They understated the problems, the losses to the shareholders, they overstated their ability to terminate the arrangement to the federal government to secure $20 billion in TARP money, and that is just a fraud,” Cuomo told the Times. “The Bank of America and its officials defrauded the government and taxpayers at a very precarious time.” But the U.S. Securities and Exchange Commission allowed the bank to escape federal charges by paying $150 million in fines, despite Merrill Lynch payments of billions of dollars in bonuses to its executives just before the merger. Bank officials said the fact that the government chose to settle showed that Cuomo's fraud allegations against it and against Chief Executive Officer Kenneth Lewis and Chief Financial Officer Joe Price were not true. “The evidence demonstrates that Bank of America and its executives, including Ken Lewis and Joe Price, at all times acted in good faith and consistent with their legal and fiduciary obligations,” Bob Stickler said in an e-mail to the Times. “The SEC had access to the same evidence as the N.Y.A.G. and concluded that there was no basis to enter either a charge of fraud or to charge individuals." Lewis and Price have since left their posts, the Times said. The SEC settlement still must be approved by a federal judge who already turned down a proposed $33 million settlement of the case. But this time, the bank agreed to have an independent auditor review its disclosures and to give shareholders the right to vote on executive pay, the Times said.

What's going on with Google and China?

Is Google doing the bidding of the U.S. government by threatening to leave China, ostensibly in a dispute over Beijing's efforts to censor content on the Internet? It might as well be, since last week's surprise announcement by the Internet search giant suggests many of the responsibilities the United States expects China to voluntarily accept as a world superpower. Of course, the most important among them is to stop jailing political opponents and otherwise mistreating its citizenry. Good luck with that, right? But it does demonstrate to China the urgency and complexity of good world citizenship. Google's threat -- so far not implemented -- already has affected relations between China and the United States, and not in a good way, according to the Reuters international news service. Top officials in the Obama administration called Google's announcement "a big deal," Reuters said. China has not commented officially on Google's threat, which the company said was in reaction to censorship of its Web sites from Beijing and to a series of cyber attacks emanating from China. But Google and other U.S. companies have done Beijing's bidding for years, even allowing the Chinese government to use their servers to track down dissidents. And the U.S. government has seemingly gone along with it. But now, U.S. Commerce Secretary Gary Locke called Google's concerns about Internet security in China "troubling." "The administration encourages the government of China to work with Google and other U.S. companies to ensure a climate for secure commercial operations in the Chinese market," Locke said. Of course, the new U.S. focus could be due to the change of administrations in Washington, even though Obama government officials spent last year trying to make Beijing comfortable with lending $800 billion to Washington. Lately, however, the United States has angered China by agreeing to sell sophisticated weaponry to Taiwan, agreeing to meet with the Dalai Lama and putting tariffs on some of China's exports. Reporters Without Borders, a press freedom group that had criticized Google in the past for complying with Beijing's demands, applauded the Silicon Valley company for what it called "standing up to the Chinese authorities."

Justice can wait -- charges against Blackwater defendants dismissed

The longer the United States puts off a comprehensive review of George W. Bush's presidency, the more disgraces like these are going to happen. We're discussing, of course, Thursday's decision by a federal judge to dismiss murder and other charges against five private security guards involved in a 2007 shooting that killed 17 civilians in Iraq. In a 90-page ruling, U.S. Judge Ricardo M. Urbina of Federal District Court in Washington said government officials had misused statements made by the five defendants in such a "reckless violation of the defendants’ constitutional rights" that dismissal of the indictment was the appropriate sanction, according to the New York Times. That works out well for the five guards who worked for Blackwater Worldwide, the McLean, Vir., company that provided security for foreign diplomats in Baghdad following the U.S. invasion in 2003, and, perhaps, for the rest of us in the long run, because it discourages prosecutorial overzealousness by the government. But there is a price to be paid. The decision further delays the urgently needed reckoning - the conduct of the U.S. government during the Bush administration has put the philosophical basis of the country at risk. The U.S. government has put its own survival ahead of its founding principles -- that's why it feels justified in operating secret prisons in other countries, torturing suspects, kidnapping suspects in other countries and holding them for years without charge or access to attorneys, in spying on its own citizens. These were supposed to be the truths we held self-evident and, yet, our government has chosen to restrict them with the support of the citizenry. It is an outrage.