Monday, May 24, 2010

Oregon Senator Ron Wyden leads the (clueless) charge against Transocean (RIG)

I'm really not quite sure what's going on here, because I'd like to believe that US Senators are not this ignorant.

Senator Wyden has drafted a letter to Attorney General Holder, asking him to investigate Transocean "Money Transfers," which he makes sound like a shady attempt to shield the company's cash from potential lawsuits related to the Deepwater Horizon incident.  In actuality, the "transfer" is a long-awaited cash dividend to stockholders, a perfectly acceptable corporate action.

I've previously outlined RIG's insurance situation, in which nearly all their spill-related liabilities are shifted to BP, per day-rate drilling contract rules.  On top of this, the Oil Spill Liability Trust Fund is explicitly designed to cover expenses in a spill such as the current one.

Wyden either doesn't understand the insurance coverage, doesn't understand what a one-time stock dividend is, or is simply a populist moron with little respect for private industry or the Constitution.  We'll see.

The letter:

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