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Obama Scores $20 Billion for Oil Spill Claims and an Apology From BP

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As the five BP executives filed out of the West Wing of the White House following their meeting with President Obama on Wednesday, someone in the press corps began (softly) humming Darth Vader's Imperial Death March theme from "Star Wars." If BP CEO Tony Hayward -- in his first visit to 1600 Pennsylvania Ave.-- was Vader (BP Chairman Carl-Henric Svanberg was perhaps more an Emperor Palpatine?), then the hero of the hour -- the Skywalker of this Deepwater Horizon saga -- was clearly Barack Obama.

During a meeting that was scheduled to last only 20 minutes but ended up running nearly two hours, Obama managed to secure an agreement with BP to create a $20 billion escrow fund to pay out claims to individuals and businesses harmed by the spill. The White House further established that the fund would be overseen by an independent third party, Ken Feinberg -- who previously administered the 9-11 victims' fund -- and a secondary three-person panel, to ensure both timeliness and impartiality.

Obama and his advisers scored a second victory in persuading the oil company to create a $100 million fund to compensate oil rig employees put out of work by the disaster, though Obama noted in a statement later it would be "an important step towards making the people of the Gulf Coast whole again, but [it would not] turn things around overnight."

In a press conference Wednesday afternoon, White House Director of Energy and Climate Change Carol Browner explained that the $20 billion fund was neither "a floor or a ceiling but...this gives us assurances so that we can make sure that people...[who] have been impacted can get their claims in in a timely manner...We wanted to make sure there were adequate resources." White House Press Secretary Robert Gibbs was quick to add that, "This does not in any way limit or cap the economic damages that BP may be responsible for."

Obama drove home the notion that he was not yet done with BP. "This fund does not supersede either individuals' rights or states' rights to present claims in court. BP will also continue to be liable for the environmental disaster it has caused, and we're going to continue to work to make sure that they address it."

To establish the $20 billion dollar fund, BP will put aside $5 billion per year for four years, beginning in 2010. The White House announced that BP would provide assurance for these commitments by setting aside $20 billion in U.S. assets.

Svanberg, in his first post-spill address to the U.S. media, took a notably conciliatory tone -- a marked difference from CEO Hayward, who has come under fire for a seeming lack of sensitivity. "We made it clear to the president that words are not enough," said Svanberg, "We understand that we will and we should be judged by our actions...I would like to take this opportunity to apologize to the American people on behalf of all the employees in BP, many of whom are living on the Gulf Coast. And I do thank you for the patience that you have in this difficult time. Through our actions and commitments, we hope that over the long term that we will regain the trust that you have in us."

The icing on the cake was certainly the concession from BP -- which Svanberg announced following the meeting -- not to pay dividends to its shareholders for the rest of the year. BP had been under intense pressure from the president to freeze dividend payments until victims of the Gulf disaster had been reimbursed for their claims.

The timing on these announcements could not have come at a more opportune time for Obama. The president received poor marks from much of the news media for the first Oval Office address of his career, delivered Tuesday night, and questions remained Wednesday morning as to whether he would be able to secure the escrow funding from BP. Gibbs and Browner refused to detail the negotiations or describe any sticking points, describing the summit only as "a business meeting." Browner did say, however, that the BP executives "actually began the meeting... with an apology."

For his part, Obama maintained focus on the victims of the spill. Where the president could have taken the moment to champion White House efforts as successful, he ended his remarks by saying, "I emphasized to [BP chairman Svanberg]...to keep in mind those individuals [in the Gulf]; that they are desperate; that some of them, if they don't get relief quickly, may lose businesses that have been in their families for two or three generations... That's going to be the standard by which I measure BP's responsiveness. I think today was a good start."

Indeed, the meeting with the BP executives was a rare win for Obama, who has been plagued by a seemingly unending cascade of bad news since the explosion of the Deepwater Horizon oil rig on April 20th. Had the Jedi returned? On Wednesday, it would seem so.

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86 Comments

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vivralafrance

THANK YOU PRESIDENT OBAMA !

June 21 2010 at 1:32 PM Report abuse +1 rate up rate down Reply
1 reply to vivralafrance's comment
wlr523

for nothing

June 21 2010 at 2:36 PM Report abuse -1 rate up rate down Reply
danzillo4

The only thing we have to fear is politicians and their big donors as we have witnessed these past 57 days of terror at the hands of bribe takers and bribe givers!

June 20 2010 at 7:35 AM Report abuse rate up rate down Reply
Mrs T

It would have shown leadeership if Obama pulled together ALL parties involved in the spill to formulate a plan on day 1.
Why did it take Obama so long to get all the players together!

June 17 2010 at 7:52 PM Report abuse +2 rate up rate down Reply
jrb359

WHEN are they going to put ALL their efforts into stopping the leak?

June 17 2010 at 6:55 PM Report abuse +4 rate up rate down Reply
punnster

Tony Hayward had already said that BP would take care of all costs of spill. That will be much more than 20 billion. Why does Obama think he has scored big?

June 17 2010 at 5:07 PM Report abuse +3 rate up rate down Reply
2 replies to punnster's comment
nbk4real

Why dont you ask those still trying to seek their money from Exxon? Obama has done a great job further more when the democrats tried to raise the amount of money they were responsible for from 75 Million to 10 Billion a republican from Alaska stopped the bill. So why dont you aim your anger towards those causing the problems instead of the ones trying to fix it? ie de-regulation of off shore drilling, no acoustic switch, no secondary well, no safety plan and a corrupt MMS? Dont you see this for what it is? A multinational corporation gambling with our Gulf to make a profit and the very people that were suppposed to be watching them were in bed with them. That was NOT President Obama's doing. Anything else is spin and misinformation. Root Cause people, go to the root cause.

June 18 2010 at 1:05 PM Report abuse +3 rate up rate down Reply
Conni

yeah, and Hayward also said there was about 1000-5000 gals of oil spilling a day. Obama scored big because once he realized he'd been suckered with lies and Big Oil manipulation he acted, and quite substantially at that. Exxon didn't pay a drop in the bucket, not to mention not cleaning their mess up.

June 19 2010 at 11:32 AM Report abuse -1 rate up rate down Reply
Hoss

I love BP. They are a good oil company. They lost 11 good men on that rig but Democrats don't give a damn about that.

June 17 2010 at 2:50 PM Report abuse -5 rate up rate down Reply
1 reply to Hoss's comment
glers

BP lost 11 workers and their CEO is crying that he wants his life back, are you a fan of Union Carbide as well?

June 17 2010 at 3:45 PM Report abuse +5 rate up rate down Reply
wolfsonnydiane

Lets See Obama got 20 billion dollars[garranteed by the way by Bps assets] when Bp was on the hook far only 75 million.This 20 billion has no strings attached.Who in their right mind things that Mc kane or Bush would of manage that. Why heck one republican is already appologised to Bp for Obama for making them start to pay for the mess they created .Backman [Republican] advises Bp to lawer up. Bp is only one of many oil companys and all oil goes on world market I doubt theyll be able to shift their cost to others least of all us in america.

June 17 2010 at 2:36 PM Report abuse +5 rate up rate down Reply
1 reply to wolfsonnydiane's comment
glers

I agree and anyone who knows politics knows Obama scored big here!!!

June 17 2010 at 3:42 PM Report abuse +3 rate up rate down Reply
punnster

Hayward had already promised BP would foot the entire bill. How much bureaucracy will people have to wade through to be given any recompense?

June 17 2010 at 1:36 PM Report abuse -1 rate up rate down Reply
rsticks18

there are PLENTY of regulations-----------this is NOT about deregulation it is about NOT enforcing regulations INCLUDING THIS ADMINISTRATION who gave this rig a passsing grade 10 days before it blew up-----people whining about deregulation are parrots repeating what they are told without knowing anything

June 17 2010 at 1:14 PM Report abuse +1 rate up rate down Reply
idodeco2

Who gave BP permission to drill there to start out with?

June 17 2010 at 12:51 PM Report abuse +3 rate up rate down Reply
1 reply to idodeco2's comment
glers

the deregulating GOP have ruined the environment, banking, wall street, trucking, pharmaceuticals etc etc ,The GOP is practically a subsidiary of BP

June 17 2010 at 1:05 PM Report abuse +4 rate up rate down Reply

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