My firm - The Delasol Group - has been intimately involved with the fallout from the 2010 BP oil spill. An NYC investment firm retained my services to provide economic literacy to the communities of color filing natural resource claims against the $20 billion BP fund. These are primarily Native American parishes whose economy depends on the vitality of the water itself. They are the cooks, the fishermen and the shrimp boat captains who keep Louisiana's vibrant seafood industry in high demand.
I've been monitoring the (lack of) progress to make whole the fishing communities I encountered in the months after the incident. An immediate problem was verifying who should receive compensation. The most significant hurdle to the tribes was their practice of bartering their catch, rather than inducing the paper trail of bank transactions and receipts. How could BP prove they were victims?
Despite efforts to validate the claims by the infamous Gulf Coast Claims facility, fraud ran rampant. So BP cried "wolf" and this week has requested to freeze all claims to the BP fund until the Department of Justice can shakedown the Fund's lawyers, suspected of principal-agent fallacies.
In economies, a principal-agent problem arises when you (the principal) hire an agent to make decisions on your behalf, either because you can't or just won't. An agent might be the President of a country or your financial adviser or your babysitter. A problem arises when your agent doesn't do what you're paying them to do.
And therein lies the rub: we need the lawyers to defend the victims, but we can't trust the lawyers to do what we hire them to do.
The Delasol Group is concerned with the people who live on the water, at ground zero, who are struggling to make ends meet. If they can't earn income from what they pull from the Gulf, then how are they surviving? What other obstacles have arisen as a result of the loss in fishing revenues? Structural unemployment? Changes in consumption and diet? Higher retirement age? All of these have a well-defined economic impetus and consequence. If BP can't (or won't) help, can I?
dls
And therein lies the rub: we need the lawyers to defend the victims, but we can't trust the lawyers to do what we hire them to do.
The Delasol Group is concerned with the people who live on the water, at ground zero, who are struggling to make ends meet. If they can't earn income from what they pull from the Gulf, then how are they surviving? What other obstacles have arisen as a result of the loss in fishing revenues? Structural unemployment? Changes in consumption and diet? Higher retirement age? All of these have a well-defined economic impetus and consequence. If BP can't (or won't) help, can I?
dls
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