|Published:||Jun 16, 2010 7:21 PM EDT|
|Updated:||Jun 16, 2010 4:22 PM EDT|
WASHINGTON (AP) - BP will set aside $20 billion to pay the
victims of the massive oil spill in the Gulf, senior administration
officials said Wednesday, as President Barack Obama met with the
oil giant's top executives. BP is acting under heavy White House
pressure in dealing with the worst environmental disaster in U.S.
The independent fund will be directed by lawyer Kenneth
Feinberg, who oversaw payments to families of victims of the Sept.
11, 2001, terrorist attacks. At present, Feinberg is known as
Obama's "pay czar," setting salary limits for companies getting
the most aid from a $700 billion government bailout fund.
The $20 billion is not a cap - if legitimate claims outstrip
that amount, then BP will required to pay more, one administration
official told The Associated Press.
Obama was to announce the deal later Wednesday after wrapping up
his meeting with BP officials. Many details were still forming. The
president darted in and out of the negotiating session in the
Roosevelt Room as the session ran overtime, delaying the
president's public announcement by more than an hour.
Officials familiar with the deal spoke to the AP on condition of
anonymity before the announcement.
The eight-week disaster in the Gulf, with tens of thousands of
gallons of oil still pouring from the broken well daily, is
jeopardizing the environment as well as the livelihoods of tens of
thousands of people across the coastal areas of Louisiana,
Mississippi, Alabama and Florida. Those affected range from
fishermen to restaurateurs to oil rig workers idled by Obama's
temporary halt to new deep-sea oil drilling.
BP spokesman Toby Odone declined to comment on the fund.
Several big questions remain unanswered, including when BP would
start processing claims and paying people from the fund, who and
what would exactly be covered, how the White House and BP came up
with the dollar figure and whether other involved companies would
be required to chip in.
At $20 billion, the size of the fund is the same that was
recommended by congressional Democrats.
BP has taken the brunt of criticism about the oil spill because
it was the operator of the Deepwater Horizon rig that sunk. It also
is a majority owner of the undersea well that has been spewing oil
since the explosion, which killed 11 workers.
But when the day of reckoning finally comes, BP may not be the
only one having to pay up. That's because Swiss-based Transocean
Ltd. owned a majority interest in the rig. Anadarko Petroleum,
based in The Woodlands, Texas, has a 25 percent non-operating
interest in the well.
Feinberg ran the unprecedented $7 billion government
compensation program after the 2001 terrorist attacks. It was a job
that lasted nearly three years as he decided how much families
should get, largely based on how much income victims would have
earned in a lifetime.
As pay czar, Feinberg has capped cash salaries at $500,000 this
year for the vast majority of the top executives at the five major
companies that received bailout funding: American International
Group, GMAC Financial Services, Chrysler Financial, Chrysler and
Word of the fund was well received on the Gulf Coast. Applause
broke out during a community meeting in Orange Beach, Ala., when
Mayor Tony Kennon briefed participants on the White House meeting.
"We asked for that two weeks ago and they laughed at us,"
Kennon said. "Thank you, President Obama, for taking a bunch of
rednecks' suggestion and making it happen." Obama visited Orange
Beach on Monday.
The president met at midday with the top BP leaders to press the
London-based oil giant to pay giant claims.
Company Chairman Carl-Henric Svanberg, CEO Tony Hayward and
other officials walked as a group from the Southwest Gate of the
White House, climbing the steps leading to the West Wing.
Joining the president in the room were Vice President Joe Biden,
Attorney General Eric Holder, White House chief of staff Rahm
Emanuel and the secretaries of energy, interior, commerce, homeland
security and labor.
The meeting came the morning after Obama vowed in a TV address
that "we will make BP pay for the damage their company has
In his speech, Obama backed creation of a fund administered by
an independent trustee to pay damages and clean-up costs associated
with the spill.
For the president, Wednesday's meeting with a few company
officials behind closed doors was a bookend to his attempt to reach
millions at once. Using a delivery in which even the harshest words
were uttered in subdued tones, Obama did not offer much in the way
of new ideas or details in his Tuesday night speech. He recapped
the government's efforts, insisted once again that BP would be held
to account and tried to tap the resilience of a nation in promising
that "something better awaits."
Obama's forceful tone about BP's behavior shows how far matters
have deteriorated. The White House once described BP as an
essential partner in plugging the crude oil spewing from the broken
well beneath nearly a mile of water. Now Obama says BP has
threatened to destroy a coastal way of life.
An Associated Press-GfK poll released Tuesday showed 52 percent
now disapprove of Obama's handling of the oil spill, up
significantly from last month and about the same as President
George W. Bush's rating after Hurricane Katrina. Most people - 56
percent - think the government's actions in response to the oil
disaster really haven't had any impact on the situation.