Obama: BP should set up spill IOU

The White House voices want for a third party escrow to handle those with "legitimate" oil damages claims

Published June 13, 2010 3:50PM (EDT)

President Barack Obama will demand that BP create a special account with "substantial" reserves to pay Gulf oil claims and is readying aid packages for the region, his top political adviser said Sunday.

Obama, set to visit the Gulf Coast on Monday and Tuesday, also plans an Oval Office address Tuesday night after his return to Washington. He meets at the White House with BP executives, including the oil company's chairman, on Wednesday.

"This is an ongoing crisis, much like an epidemic," David Axelrod told NBC's "Meet the Press."

BP's board was to meet on Monday to discuss deferring its second-quarter dividend and putting the money into escrow until the company's liabilities from the spill are known.

"Our mission is to hold them accountable in every appropriate way," Axelrod said.

The White House wants an independent, third party to administer the escrow account and compensate those with "legitimate" claims for damages, he said. The amount of money set aside will be part of the White House discussions, but Axelrod said it should be "substantial."

"We're not interested in undermining the integrity of their company, but this disaster is having an impact on their company," he said. "We believe that BP has the resources to meet the claims, and we're going to make sure that they do. They're a highly profitable company. They've got lots of assets. They have the prospect of continuing, but they have to meet their obligations here."

Axelrod declined to say how much money Obama would seek for the escrow account. "That will be the discussion between us and BP, but it has to be substantial enough to meet the claims that we expect to come," he said.

In addition, the Obama administration will announce several aid packages and the president will make clear in his meeting Wednesday with BP's chairman, Carl-Henric Svanberg, and others about his expectation of BP's responsibility for caring for people affected by the spill.

"They're responsible for it and want to make sure that they meet that responsibility," Axelrod said, adding that Obama believes BP has a legal and moral obligation.

In the meeting, Obama is set to follow the example of some Gulf states, which aim to put the squeeze on the company amid talk of the possibility that BP eventually may file for bankruptcy.

The attorney general in Florida and the state treasurer in Louisiana already have said they want BP to put billions in escrow accounts for claim payments.

"I really don't care how they do it, whether they set up an escrow account or not," said Gov. Bob Riley, R-Ala.

"But we have to do something. If you look at what's going on with the economy and the state of Alabama and Mississippi, Louisiana, and now Florida, we're going to have to have some level of compensation, because our tourist season here is essentially from Memorial Day to Labor Day. And with the beaches the way they are this morning, it's going to be very, very difficult to sustain the economic balance that we've had in the past," he told CNN's "State of the Union."

Asked who might receive compensation -- oil workers unable to work because there's no deepwater drilling, stores without shoppers, hotels without guests, fishermen without clean water to fish, states without expected revenue -- Riley replied, "Everyone of them. ... I don't think there is a dividing line. I don't think you can say that one group is going to get it and another one doesn't."

The administration's point man for the oil spill said federal officials may appoint an organization outside BP to administer the escrow fund.

Coast Guard Adm. Thad Allen told CBS' "Face The Nation" that discussions will focus on an outside contractor to run the account and ensure that claims are handled more quickly than they are now.

"We've been very concerned about the claims process," he said. "This is not a core function of an oil producing company."

Allen said he is not concerned that BP will go bankrupt and be unable to pay the damage claims.

"They're a company that has got a lot of wealth inside it," he said. "I don't think that's a consideration."

Obama is touring three Gulf states he hasn't visited since the spill -- Alabama, Mississippi and Florida -- before his national address.

"He wants to lay out the steps we're going to take from here to get through this crisis," Axelrod said. "We have some clarity now about the oil that's escaping and about how we're going to approach it and about what this means to those communities. And we want to talk about that."

By Associated Press

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Barack Obama David Axelrod David Vitter Economics Environment Gulf Oil Spill Mary Landrieu