BP Suspends Dividends, Sets Up Gulf Fund
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After four days of intense negotiations and a four-hour meeting at the White House, the president got a big financial commitment from BP. The oil giant agreed to put $20 billion in an escrow fund to pay the claims of gulf residents hurt by the continuing spill.
NPR's Mara Liasson reports.
President Obama has been open with Americans about his limited powers to stop the spill. I can't suck it up with a straw, he said last week. But yesterday, he showed he did have the power to do something else that might help. After his first face-to-face meeting with BP's chairman and top executives, the company, at the urging of the White House, agreed to create a $20 billion claim fund.
President BARACK OBAMA: This is not a cap. The people of the gulf have my commitment that BP will meet its obligations to them. BP has publicly pledged to make good on the claims that it owes to the people in the gulf, and so the agreement we reached sets up a financial and legal framework to do it.
LIASSON: BP will still be liable for all the damage it's caused, and it's still under investigation by the Justice Department. However, BP will not have to put all the money up at once. That will help the company maintain the confidence of its investors, which is a practical matter the president needs it to do.
Pres. OBAMA: BP is a strong and viable company, and it is in all of our interests that it remain so.�So what this is about is accountability. At the end of the day, that's what every American wants and expects.
LIASSON: The fund will be administered not by the government or by BP, but by an independent third party. Carol Browner, the top environmental official at the White House, said there's no limit to how often an individual or business can apply to the fund.
Ms. CAROL BROWNER (Director, White House Office of Energy and Climate Change Policy): Under this, we will - people will be able to apply over and over again, as is necessary. And if two months later you're still not working, you can come back and file another claim.
LIASSON: The president also pressed BP to make another financial commitment.
Pres. OBAMA: Additionally, BP voluntarily agreed to establish $100 million fund to compensate unemployed oil rig workers affected by the closure of the deepwater rigs.
LIASSON: This fund may help solve one of the president's political problems in the gulf. Ever since he put a six-month moratorium on new deepwater drilling, he's been trying to figure out how to mitigate the economic damage that's caused in the drilling-dependent gulf.
After he finished reading his remarks, Mr. Obama shared what he had told BP's chairman, Carl-Henric Svanberg, about the people he had met in the gulf.
Pres. OBAMA: I indicated to the chairman that throughout this process, as we work to make sure that the gulf is made whole once again, that the standard I'm going to be applying is whether or not those individuals I met with, their family members, those communities that are vulnerable, whether they are uppermost in the minds of all concerned. That's who we're doing this work for.
LIASSON: Minutes later, a contrite Chairman Svanberg was in the White House driveway.
Mr. CARL-HENRIC SVANBERG (Chairman, BP): We made it clear to the president that words are not enough. 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. Through our actions and commitments, we hope that over long term, that we will regain the trust that you have in us.
LIASSON: At times over the last two months, BP has served as a foil and a villain for the White House. But after yesterday's meeting, BP's chairman appeared to emerge as a partner as he conveyed a message the White House wants voters to hear about the president's commitment.
Mr. SVANBERG: I must say that he is - he comes across as a - he's frustrated because he care about the small people, and we care about the small people. I hear comments sometimes that large oil companies are greedy companies who don't care, but that is not the case in BP. We care about the small people.
(Soundbite of reporters)
LIASSON: To many in the U.S., those words sounded condescending. After a few hours of uproar on the Internet, the Swedish Svanberg issued another apology, this time for quote, speaking clumsily.
The big furor over small people almost obscured the other news of the day for BP. In addition to establishing the two escrow accounts, the BP board decided it will not issue any dividends for the rest of the year.
Mara Liasson, NPR News, the White House.
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