Commentary: Obama’s Speech Raises Question: Where Does He Get the Authority to ‘Inform’ a Private Company That It Must Surrender Its Money?

Terence P. Jeffrey | June 15, 2010 | 10:24pm EDT
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President Barack Obama sips an iced tea while talking to patrons at Tacky Jack's, a seafood restaurant in Orange Beach, Ala., during his tour of the Gulf Coast, June 14, 2010. (Official White House Photo by Pete Souza)

( - In his first-ever address from the Oval Office on Tuesday night, President Barack Obama said he was going to “inform” the chairman of BP that he must surrender the company’s money to an independent party that will distribute it to people and businesses determined to have been harmed by the oil spill in the Gulf of Mexico.

The president’s declaration raises a serious constitutional question about his authority: Where does the president get the lawful power to order any private-sector company—BP or any other—that it must surrender its money? Should not courts and normal legal proceedings determine who is responsible, who has been harmed, and who owes what to whom in regards to the Gulf oil spill?
Leaving aside BP's relative popularity or lack of it today, if President Obama, on his own initiative, can tell a corporation to surrender its money because he has determined its culpability in an oil spill, under what other circumstances can Obama or any future American president tell a corporation or a private citizen to surrender money? 

What rights do the stockholders in BP have to due process of law to protect their property? The Fifth Amendment to the Constitution says: "No person shall be … deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

Does Obama think he can “inform” persons and corporations to surrender or exchange their property without due process of law?

Will Congress, the legislative branch of the federal government, have a say before Obama takes uniliteral executive action in regard to how the government treats BP? Congress never did give him legislative authority to have the federal government take ownership of General Motors. 

“Tomorrow,” Obama said, “I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness.  And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent third party.”

Tomorrow there will also be serious and legitimate questions about Executive authority under the U.S.Constitution that the White House needs to answer and responsible members of Congress need to ask.
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