By John E. Calfee Thursday, June 3, 2010
Filed under: Government & Politics, Boardroom, Economic Policy, Public Square, Science & Technology
In his daily briefing Tuesday afternoon, White House Press Secretary Robert Gibbs explained clearly and forcefully that BP and the Obama administration faced essentially the same incentives to stop the disastrous oil leak from BP’s Deepwater Horizon drilling platform and well. Both parties wanted desperately to stop the leak, both were drawing on every plausible source of expertise, and both were eager to try whatever was most likely to work. But then within an hour or two, the president announced that he had disastrously unaligned those incentives. He endorsed Attorney General Eric Holder’s already high-profile criminal investigation into the behavior of BP in the run-up to the drilling platform explosion and the consequent massive leak from 5,000 feet below.
It is hard to imagine a more counterproductive strategy. In two other areas where human error can have disastrous consequences—medical practice and airline operations—it has become clear that in the essential task of finding out what happened and how to prevent it, a crucial tool is the absence of an immediate criminal or civil penalties investigation. The reason is simple. In diagnosing and fixing errors, information is at a premium, and the faster it is found and used, the better. Because that information is typically embedded in a mass of details that can only be untangled by experts—often the same experts who could be implicated in civil or criminal litigation—it is counterproductive to have those experts thinking about how to avoid severe penalties while also trying to uncover the best that science offers.
The National Transportation Safety Board investigates airline crashes, and possesses neither the power to regulate nor to punish. As the NTSB itself emphasizes, “To ensure that Safety Board investigations focus only on improving transportation safety, the Board's analysis of factual information and its determination of probable cause cannot be entered as evidence in a court of law.” Bolstered immeasurably by the airlines’ innate desire to avoid accidents, domestic airline fatality rates have steadily declined nearly to the vanishing point.
In medicine, the NTSB model has been widely praised. In fact, the trade-off has been explicated numerous times in the legal and medical literature. A 2006 New England Journal of Medicine article put it nicely:
The current tort system does not promote open communication to improve patient safety. On the contrary, it jeopardizes patient safety by creating an intimidating liability environment. Studies consistently show that health care providers are understandably reticent about discussing errors, because they believe that they have no appropriate assurance of legal protection. This reticence, in turn, impedes systemic and programmatic efforts to prevent medical errors.
The authors were not physicians, but an astute pair of lawyer-politicians: Hillary Rodham Clinton and Barack Obama. Of course, the future secretary of State and the future president were only referring to the tort liability system and other civil actions. Add the threat of criminal prosecution, and the problem becomes deeper.
But the situation with the Gulf oil spill is even worse. That’s partly because so many laws are involved, including sweeping environmental statutes. But the gut problem is the situation in which Obama has made his move. In medical and airline disasters, prosecutors (if any) start their work after the problem itself has been resolved to the best of everyone’s ability. But imagine being a hospital physician who discovers he is under criminal investigation for causing a situation—hard-to-control hemorrhaging or sepsis, perhaps—in which he is still desperately trying to save the patient. Suddenly, every decision—whether in treatment, testing, or diagnosis—would be haunted by possibly increasing the likelihood of going to prison after the episode is over.
That is essentially the situation in which Obama and Holder have put everyone who was involved in the final drilling stage that led to disaster, in the desperate attempt to head off catastrophe in the immediate aftermath, or in the horrendously complicated and thus-far failed attempts to limit or end the torrent of oil surging up from the ocean floor. The problem is that Department of Justice (DOJ) scrutiny will involve more than decisions yet to be made. As anyone who has studied the tort liability system knows, decisions made today or tomorrow can reveal something about decisions made much earlier. Changing an automobile brake part can be adduced as proof that an earlier version was negligently or criminally manufactured. For BP engineers with an eye on DOJ prosecutors, the pursuit of leak fix—or even a quick review of a possible fix—may be interpreted as revealing that a previous decision was criminally culpable no matter how reasonable that decision seemed at the time. This is how a criminal investigation distorts incentives to pursue the best actions going forward.
The Obama move also raises the stakes on second-guessing. It is bad enough that federal scientists and engineers, including brilliant ones whose expertise unfortunately does not include deep-water petroleum drilling, are now second-guessing every decision BP makes in a charged environment. That already risks doing more harm than good. But it is another and far worse thing for DOJ lawyers to track every BP move with the goal of using criminal prosecution to second-guess those decisions, again, after the crisis is over. With DOJ lawyers understandably eager to launch a career-making case in connection with the signature environmental disaster of our time, the pressure for BP engineers to shape decisions to avoid prosecution is even stronger than usual.
Thus has the Obama administration worsened BP’s problem, and in so doing has worsened the problems faced not only by the administration but also by the unfortunate residents of the Gulf of Mexico and no doubt many others. Does this mean that criminal behavior, if it occurred, should simply be ignored? Not at all, even though appearances so far suggest that this episode is a matter of accidents combined with misjudgments. But the time to settle that question is after the leak has been fixed and a careful and wide-ranging investigation has assessed both cause and future prevention. Let us hope that the president figures out how to undo his error so things can proceed as well as possible.
John E. Calfee is a resident scholar at the American Enterprise Institute.
Image by Rob Green/Bergman Group.
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