Obama Plans to Force BP’s Hand on Oil Spill Fund

 

By JACKIE CALMES/NYTimes

WASHINGTON — President Obama for the first time will address the nation about the ongoing oil disaster in the Gulf of Mexico on Tuesday night and outline his plans to legally force BP executives to create an escrow account reserving billions of dollars to compensate businesses and individuals if the company does not do so on its own, a senior administration official said on Sunday.

 

“The president will use his legal authority to compel them,” said Robert Gibbs, the White House spokesman.  Mr. Gibbs did not elaborate on the legal basis for such a move but said that White House lawyers have been researching the matter for days. The president is seizing the initiative after reports on Friday from London that BP would voluntarily establish an escrow account — either for compensating victims or for delaying a planned dividend for BP shareholders — turned out to be less certain than the White House initially thought.

The escrow account that the White House envisions would be roughly modeled after the fund established for victims of the terrorist attacks on Sept. 11, 2001, and it would be administered by a third party to provide greater independence and transparency and to guard against the company too narrowly defining who is entitled to payments and how much. 

“We want to make sure that money is escrowed for the legitimate claims that are going to be, and are being made, by businesses down in the Gulf — people who’ve been damaged by this,” said David Axelrod, Mr. Obama’s senior White House strategist, on NBC’s “Meet the Press” television news program on Sunday. “And we want to make sure that that money is independently administered so that [they] won’t be slow-walked on these claims.” 

The plans for a prime-time speech and Mr. Obama’s ultimatum on an escrow account escalate Mr. Obama’s personal engagement in the eight-week-old environmental and economic crisis. And they set the tone for a week of events that will have the oil giant publicly on the defensive more than at any time in the nearly two months since the explosion aboard the Deepwater Horizon drilling rig a mile below the Gulf’s surface. 

The BP board is to hold an emergency meeting on Monday at which it is expected to discuss both the escrow issue and other issues company officials will address in a meeting at the White House on Wednesday that Mr. Obama has summoned them to. 

Mr. Obama on Monday and Tuesday will make his fourth trip to the Gulf coast since the disaster struck on April 20. It will be his first overnight visit and, after three trips to Louisiana, his first to the states to its east — Mississippi, Alabama and Florida — which are in the direction of the spewing oil’s drift. 

The president will return to Washington in time to report to the nation on Tuesday night, and on Wednesday will meet with the chairman of BP’s board, Carl-Henric Svanberg, accompanied by the company’s chief executive, Tony Hayward, who has been criticized for statements that many people considered insensitive and self-serving. And Mr. Hayward will be in the hot seat on Thursday, testifying before one of several Congressional committees investigating the calamity. 

Administration officials say that Mr. Obama, in his speech from the White House on Tuesday, will not only discuss the issue of claims against BP but also update the nation on efforts to capture and contain the oil, and on his proposals to reorganize the federal system for regulating offshore oil drilling. 

Amid some grumbling from Britain that the Obama administration and the country are unfairly bashing BP, the president on Saturday discussed the oil spill and the London-based company in a phone call with the new British prime minister, David Cameron. A White House statement afterward described a wide-ranging conversation that covered the countries’ alliance in Afghanistan, sanctions against Iran, the global economy and the upcoming G of 20 summit meeting of developed nations, and the day’s World Cup soccer game between England and the United States, which later ended in a tie. 

But the statement also noted, “The President and the Prime Minister discussed the impact of the tragic oil spill in the Gulf of Mexico, reiterating that BP must do all it can to respond effectively to the situation.” 

Coast Guard Admiral Thad W. Allen, who is heading the federal response to the disaster, said on CBS’s “Face the Nation” that he expected an answer later on Sunday to his request to BP late last week asking its officials for “a faster plan” to siphon off and collect the gushing oil, one with “greater redundancy and reliability.” 

He also acknowledged the recent determination from government scientists that the volume of spewing oil could be higher than estimated — up to 40,000 barrels a day. But Adm. Allen tempered his estimate by saying that the “mid-30,000 range is what we’re looking at.” 

Meanwhile, the governors of three of the affected Gulf Coast states continued to complain that the news media were harmfully exaggerating the impact of the oil on their beaches and coastal waters, with Mississippi’s Haley Barbour calling the coverage “very sensational.” Mr. Barbour said that so far his state has had a “a couple of incursions” of oil on its barrier islands, but as a result of the coverage on cable television and other news outlets, “we’ve lost the first third of our tourist season.” 

“They have been clobbered because of the misperception that our whole coast is knee-deep in oil,” he said of his state’s tourist businesses. 

Gov. Bob Riley of Alabama and Gov. Charlie Crist of Florida echoed his criticism, with Mr. Crist calling his beaches “clean and pristine” and Mr. Riley urging Americans to “come down and rent a condo, stay in a hotel, play golf.” 

Joseph Berger contributed reporting from New York. 

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