BP AGREES TO $20 BILLION FUND…. In his Oval Office address last night, President Obama explained that he would meet today with the chairman of BP at the White House. The president said he would “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.”
It was an interesting choice of words. Obama didn’t intend to “ask,” he would “inform.” The president wasn’t planning to offer a request; he would offer instructions.
The follow-up question was obvious: what if BP simply refused? Fortunately, it appears Obama was persuasive — just a few hours after sitting down in the Roosevelt Room, a deal came together.
The White House and BP tentatively agreed on Wednesday that the oil giant would create a $20 billion fund to pay claims for the worst oil spill in American history. The fund will be independently run by Kenneth Feinberg, the mediator who oversaw the 9/11 victims compensation fund, according to two people familiar with the deliberations.
The agreement was not final and was still being negotiated when President Obama and his top advisers met Wednesday morning with BP’s top executives and lawyers. The preliminary terms would give BP several years to deposit the full amount into the fund so it could better manage cash flow, maintain its financial viability and not scare off investors.
Remarks from participants in the Rose Garden, announcing the final agreement, are supposed to begin any minute now.
This is, clearly, good news, since the escrow account will make it less likely American taxpayers will be asked to pick up the tab for BP’s disaster. It’s not a substitute for an effective response to the crisis — BP still has an incredible amount of work to do — but it’s a big step in the right direction.