White House confident it can force BP to set up escrow account

Jon Ward Contributor
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The Obama administration is confident that it has legal authority to force BP to set up an escrow account that would be turned over to an independent third-party organization to process claims from those affected by the Gulf oil spill.

White House deputy press secretary Bill Burton told reporters on Air Force One Monday that the administration is sure it can instruct BP to enter the arrangement.

“We’re confident that we have the legal authority to compel BP to make sure that the folks that they have affected here are made whole. And we’re also confident that we’re going to be able to move forward on that,” Burton said.

“The signs from BP aren’t that there is going to be a protracted legal battle over this or anything like that,” he said.

“Considering BP has been — has seemed willing to move forward with an escrow account, right now we’re just working out the particulars of — amounts, administration things like that.”

Later in the day, President Obama was less clear about where things stood when asked what would be discussed at a meeting he has scheduled with BP chairman of the board Carl-Henric Svanberg and other executives on Wednesday.

“So far, we’ve had a constructive conversation and my hope is that by the time the chairman and I meet on Wednesday, that we’ve made sufficient progress that we can start actually seeing a structure that would be in place,” Obama said, speaking to reporters in Theodore, Alabama.

The fund is reported to be targeted at $20 billion, though Burton declined to confirm that amount.

Obama is spending Monday and Tuesday in the Gulf to monitor recovery efforts and will deliver a public address on the spill Tuesday evening from the Oval Office.

Burton said that the oil spill is “a catastrophe the likes of which our country has never seen before.”

Burton confirmed that BP has promised the administration that by the end of June it would be capturing up to 53,000 barrels of oil from the leaking gusher on the ocean floor. BP’s chief operating officer, Doug Suttles, gave the estimate to the administration in a letter sent Sunday evening.

“We’re going to continue to hold BP and any other responsible parties accountable for the disaster that they created,” Obama said during his remarks in Theodore.

Burton said he expected the session with BP executives at the White House Wednesday to be “very frank.”

Some economists questioned the wisdom of the administration’s full court press for an escrow account. Peter Morici of the University of Maryland said such a move “only distracts BP from doing what it has already pledged to do — clean up the mess and leave whole those who have been harmed.”

“By feeding public distemper, the president risks encouraging boycotts of BP by consumers and bond investors, out-sized tort claims and the specter of excessive punitive awards,” Morici wrote Monday. “Together, those could destroy BP’s ability to raise cash and leave small businesses and ordinary citizens without the compensation they are due. The lawyers might get rich but the victims would be shortchanged.”

Democratic advocacy organizations, meanwhile, are using the issue to drive support for an energy bill. Organizing for America, the organization that came out of Obama’s presidential campaign and is housed at the Democratic National Committee, sent an e-mail in the president’s name on Monday asking people to add their name to a petition supporting an energy bill.

“Our continued dependence on fossil fuels will jeopardize our national security. It will smother our planet. And it will continue to put our economy and our environment at risk. We cannot delay any longer, and that is why I am asking for your help,” Obama wrote in the e-mail to those on OFA’s e-mail list.

“Please stand with me today in backing clean energy. Adding your name will help Organizing for America create a powerful, public display of support for making this change happen,” Obama wrote.

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