Top U.S.official 'frustrated' by failure of oil spill cleanup

Nice to see that U.S. regulators are "frustrated" by the failure of oil giant BP to stop the oil gushing into the Gulf of Mexico from one of its wells, but it's nothing short of astounding that the people who were supposed to be overseeing production by the oil companies operating in this country apparently weren't doing so. Why else would the massive U.S. regulatory apparatus been caught so unprepared? Yes, the oil spill was an accident and is a tragedy of probably incalculable proportions. And yes, a gusher at such a depth -- nearly a mile under the ocean -- is unprecedented. But no one in the industry or at the regulatory agencies should be permitted to pretend that it should not have been anticipated. The oil industry -- in this case, BP, formerly known as British Petroleum -- had to apply to the government for permission to operate in the Gulf of Mexico, they had to offer production estimates and pay taxes and they had submit plans for the drilling and for how they were going to take care of any emergencies that were sure to result. What were those plans? Where are those plans? If they didn't include what to do in the event of an explosion on a drilling platform, as occurred in April on the BP-leased Deepwater Horizon platform, what did they include? What about other companies operating in the Gulf of Mexico or elsewhere? Do they have such plans? Why not, if their plans included drilling at such depths? And, if not, will they be required to have them now? What we're discussing, of course, is Sunday's statement by Interior Secretary Ken Salazar that he no longer has confidence that BP officials "know exactly what they're doing," according to Cable News Network (CNN). Add to that comments by Marcia McNutt, the director of the U.S. Geological Survey, that BP's plans for stopping the gusher were probably infeasible. "I think everyone has to understand that the kinds of operations they're doing in the deep sea have never been done before," McNutt told CNN. But the problem is not that "everyone" has to understand that -- the problem is the regulators seem not to have understood it. Why even regulate oil production at all if obvious risks are not being planned for? Why have the regulators been doing all this time if we have to ask these questions now, when oil has begun washing up on some of the country's most beautiful beaches and contaminating some of the country's richest fishing and wildlife areas? If U.S. President Barack Obama's plans to revamp the federal government do not include better regulation of some of the country's biggest and most vital industries, he had better start explaining why not.

Toyota agrees to pay $16 million fine to U.S. regulators

So, what's up with Toyota? News that the Japanese automaker had agreed to pay a $16.4 million fine to U.S. regulators over sticky gas pedals in millions of its cars is Toyota Motor Corp. appears almost outrageously integral and honest, but that only makes things even weirder. Can anyone remember another time when a large, multinational corporation did the selfless thing in favor of its customers? Then again, can anyone remember another high-profile industrial company that so quickly ruined a sterling reputation it had earned over the years with high-quality products? Maybe Toyota's decision to pay the fine and focus instead on fixing millions of its cars and compensating victims really is an act of corporate contrition, and not a calculated attempt to limit future liability like we've all come to expect from U.S. companies. Then again, Toyota's present liabilities are bad enough. Legal experts say Toyota already could be facing $10 billion in damage claims, according to the New York Times. The U.S. fine was imposed to punish Toyota for failing to inform federal safety regulators for months about the sticky accelerator problem, even though it already had enough reports about the problem from car owners in Europe and Canada to have started fixing vehicles there, the Times said. "We did not try to hide the defect to avoid dealing with a safety problem," Toyota said in a written statement, even though that appears to be exactly what happened. Toyota said it had made a "good faith" effort to fix the problems but agreed to pay the penalty anyway to avoid a long legal fight. U.S. Transportation Secretary Ray LaHood said Toyota had put consumers at risk by failing to report the defective accelerator pedal problem and that U.S. officials would continue with their investigation, the Times said.

Bank seizures belie news about improving economy

Today's news that U.S. regulators had seized nine Western banks is a sure sign that the world's largest economy is still in crisis, even while federal officials and traders on the New York Stock Exchange behave as if the nation's financial system has already recovered. The nine failed banks owned by FBOP Corp., an Illinois-based bank holding company, and their scores of branches were acquired by U.S. Bancorp of Minneapolis, which owns 770 U.S. Bank branches in Illinois, Arizona and California. The largest of the nine banks, California National Bank of Los Angeles, had 68 branches in Southern California. The nine bank seizures were the most in a single day since the financial crisis began, according to the Reuters international news service. "We're getting ready to turn everything over to U.S. Bank," said Roberta Valdez, a spokeswoman for the Federal Deposit Insurance Corp, which is helping to supervise the transfer. "[The banks] will continue to operate as normal in the interim." Today's takeovers bring to 115 the number of bank failures in 2009, the most since 1992, and more are yet to come, Reuters said, as depressed commercial real estate prices make billions of dollars in loans uncollectable. Small banks are expected to be the hardest hit because they are not as diversified as larger banks, Reuters said. Other banks expecting to report big losses this year include Zions Bancorp of Salt Lake City, Columbus, Georgia's Synovus Financial Corp of Columbus, Georgia, and Comerica Inc. of Dallas. U.S. Bancorp has been helping to pick up the slumping industry in the West by buying Downey Savings of Newport Beach and PFF Bank & Trust of Pomona last November and, in October, buying 20 branches from BB&T Corp. in Nevada.