Obama: BP agrees to $20B fund for spill victims - MSNewsNow.com - Jackson, MS

Obama: BP agrees to $20B fund for spill victims

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WASHINGTON (AP) - After meeting with top BP officials, President Barack Obama announced on Wednesday that the oil giant has agreed to set aside an initial $20 billion to pay the victims of the oil spill in the Gulf of Mexico, calling it "an important step toward making the people of the Gulf Coast whole again."

Obama, speaking alone in the State Dining Room of the White House, also announced that BP had voluntarily agreed to establish a $100 million fund to compensate laid-off oil right workers affected by his six-month drilling moratorium.

Obama said the independent fund will be directed by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks. There will be a three-member panel to adjudicate claims that are turned down.

"This is about accountability. At the end of the day, that's what every American wants and expects," Obama said after a meeting that stretched more than four hours, with Obama darting in and out of the room.

Obama and top advisers met with a group of BP officials, including board chairman Carl-Henric Svanberg and CEO Tony Hayward.

Svanberg, speaking with reporters later, announced the company would suspend its dividend for the rest of the year. He expressed sorrow for victims of the spill.

"This tragic accident ... should have never happened," he said, and he also used the occasion to "apologize to the American people."

Obama said the $20 billion fund was "not a cap."

"The people of the Gulf have my commitment that BP will meet its obligations to them," Obama said. "This $20 billion amount will provide substantial assurance that the claims people and businesses have will be honored."

The claims system sets up a formal process to be run by a specialist with a proven record. Instead of vague promises by BP, there will be a White House-blessed structure with substantial money and the pledge that more will be provided if needed.

The news was applauded in the Gulf - a rare positive development in a region that has been hurt so badly.

"Every effort will be made to expedite claims," Obama said.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

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