This is a good start which yes, will help the “small people” as BP’s Chairman Carl-Henric Svanberg likes to refer to those who aren’t working the boardrooms of Fortune 500 companies. (Where does BP find their leaders?) This is one of the recommendations that was discussed weeks ago so it’s good to see the administration came around on this important point. It would be interesting to see how the families of the oil rig workers who died are being compensated. There had been some debate over this issue.
What will be important is that there is no final settlement. When costs arise, BP pays, whether it’s after the $20 billion has been paid or 5, 10, 30 years down the line. Costs will continue to emerge as we’ve seen with the Exxon Valdez for many years. At some point BP will want to cut a deal as investors will want to see an end to any “unexpected” costs. In all likelihood the government will also want to take up such an offer to get cash faster due to budget issues or perhaps a Republican administration that’s soft on Big Oil.
Four days of intense negotiations between the White House and BP lawyers allowed President Obama to announce Wednesday that the oil giant would create a $20 billion fund to pay damage claims to thousands of fishermen and others along the Gulf Coast.
The fund will be administered by Kenneth R. Feinberg, the lawyer and mediator who ran the fund for victims of the Sept. 11 attacks and has emerged as a troubleshooter on issues like executive compensation and resolving claims for asbestos and Agent Orange victims.
While acknowledging that oil is likely to continue spewing from the well for perhaps months to come, Mr. Obama was able to throw something of a lifeline to desperate coastal residents worried about meeting payrolls, mortgages and shrimp boat payments.
Even James Carville is pleased with this move.