Obama wants BP to set up escrow account for claims

WASHINGTON (AP):

United States President Barack Obama will demand that British Petroleum (BP) create a special account with "substantial" reserves to pay Gulf oil claims and will take other steps aimed at aiding the region, his top political adviser said yesterday.

Obama, set to visit the Gulf Coast today 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 television's 'Meet the Press'.

BP's board was to meet today 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".

Highly profitable company

"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 brushed aside criticism that Obama has not yet met or spoken to BP CEO Tony Hayward, saying that Hayward knows what the administration's demands have been since the crisis began. He also would not say whether the administration trusts BP officials, but rejected the idea that the US and the petroleum giant are "partners" in dealing with the spill.

"I don't consider them a partner," Axelrod said. "I don't consider them, they're not social friends. I'm not looking to make judgments about their soul, I just want to make sure they do what they're required to do."

Asked if Obama would announce any kind of direct assistance for those affected by the spill, Axelrod said, "I think that the assistance is going to come from BP." The adviser did not specify what other steps Obama planned.

The president will make clear in his meeting Wednesday with BP's chairman, Carl-Henric Svanberg, and others about his expectation that BP meets its responsibility for caring for people affected by the spill, Axelrod said. He added that Obama believes BP has a legal and moral obligation.

Claim payments

In the meeting, Obama is set to follow the example of some Gulf states, which aim to put the squeeze on the oil 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 Alabama Governor Bob Riley.

"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'.