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BP’s $20 Billion Escrow Fund Formalized, But Will It Work?

BP’s $20 Billion Escrow Fund Formalized, But Will It Work?

On Monday, Sen. Mark Begich, D-Alaska made it official: $20 billion of BP’s dollars would be set aside in an escrow account to compensate victims of the Gulf oil spill. Part of the legislation also ensures that future violators must also set up similar accounts.

Although the ruling has been passed on to Alaska’s notorious Republican, Senator Lisa Murkowski for review, she’s made no move to sign it yet. Instead, she’s working on her own bit of legislation, which would prevent the creation of a formal process for compensation of oil spill victims. Murkowski prefers that the administration set liability on offshore oil and gas projects on a case-by-case basis.

“People need some sort of assurance that if this happens again, they’ll be compensated, too,” Begich told the Anchorage Daily News. Begich also backed fellow Democrats who are calling for BP to pay money into the escrow fund before they pay a shareholder dividend; the company has since suspended its dividend payments.

The people’s trust in due process has been damaged throughout the Gulf oil spill catastrophe, and the fact that some politicians in Washington D.C. say that $20 billion has been set aside to pay businesses and individuals for their losses isn’t all that reassuring to those who have endured one misleading statement after another.

Kenneth R. Feinburg, the Washington super-lawyer who previously handled the massive relief payouts made to families of those who died in the Sept. 11, 2001, attacks and the Virginia Tech shootings, agrees that regaining this trust is the key to a successful dispursment of BP’s escrow funds.

“This program cannot be run from Washington, D.C.,” Feinberg said in a news conference Friday after a two-hour meeting in Jackson, Miss., with Gov. Haley Barbour (R). “You have to come down here to the states affected by this spill and hear firsthand what’s being done, what needs to be done, to provide prompt, fair, impartial compensation for people with a legitimate claim.”

Feinburg’s team has already begun arranging town hall meetings across the region, setting up 800-numbers and readied a Web site. They will continue by hiring local lawyers, accountants, environmental experts and database engineers to assist the effort in community offices across five states (Washington Post).

Despite the fact that BP “volunteerd” to set up the escrow fund for victim compensation, there are those who feel the company should be criminally prosecuted for the environmental devastation caused by its negligence.

To that end, the Center for Biological Diversity has filed a lawsuit against BP in New Orleans, seeking $19 Billion in Clean Water Act penalties.

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Image Credit: REUTERS/Jason Reed

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39 comments

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4:18PM PDT on Jul 28, 2010

just makes my heart sad

2:10AM PDT on Jul 4, 2010

Thanks.

7:38AM PDT on Jun 26, 2010

Roxane and Charmaine, you hit the crucial point. The animals cannot push their claims, so we humans have to do that for them. And, please, administration: Don't leave the environment protection groups alone with this mission!!!

6:01AM PDT on Jun 25, 2010

Oh weeell...that's alright then, companies are going to get compensated. The fact that the gulf is knackered and will be for generations to come and millions of animals will have lost their lives isn't all that important, is it? Ordinary men and woman will carry the brunt of this disaster and they won't see a penny in compensation. We are the only shortsighted animal that lives on this planet...every other species manages it's environment and resources without destruction...until we come along and then....WHAM!

6:24AM PDT on Jun 24, 2010

Financial compensation is one thing, the environment the other. Both are equally important, but in the long term, the damage done to the environment might have more significance. In the short term, the people got to get their incomes from the one that's caused the mess, and that is BP - and with them those politicians who profit from the oil industry. This and the next generation are suffering from the oil spill right now, several after them will suffer from it in times to come.

5:56AM PDT on Jun 24, 2010

What about the animals that have lost their homes,their young,and their lives?What about the endangered sea turtle that could become extinct because of this? What compensation will they get?

6:20PM PDT on Jun 23, 2010

Sorry, I don't have much trust in the honesty of humans where money is concerned!

5:30PM PDT on Jun 23, 2010

people will come out of the wood work to sue BP. It is like hitting the lottery.

4:06PM PDT on Jun 23, 2010

They need to keep on dealing w/ the spill BUT they people who have been affected by this need to be compensated w/o having to go thru immense paper bullshit or the "hold" on the phone game. I think BP is jerking the people around and they need to get off their asses and get cracking to help the people of the coast and the environment...........NOW, not down the road, not "hold" on the phone, get them some money NOW. Is this going to turn into another Katrina clusterfuck?

3:16PM PDT on Jun 23, 2010

Why are we talking about how much money will BP pay, while the oil is still gushing and will continue for another 2 or more months?
Who cares about the environmental damage as long as we get financially compensated, right?

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