WASHINGTON — After intense pressure from the White House and lawmakers, BP has agreed to suspend its dividend payments and create a $20 billion escrow fund to cover cleanup costs and damages.
The announcement came after a four-hour meeting between senior BP leaders and White House officials, part of which President Obama attended.
“This $20 billion will provide substantial assurance that the claims people and businesses have will be honored,” Obama said following the meeting. “It’s also important to emphasize this is not a cap. The people of the Gulf have my commitment that BP will meet its obligations to them. BP has publicly pledged to make good on the claims that it owes to the people in the Gulf, and so the agreement we reached sets up a financial and legal framework to do it.”
The announcement also comes after repeated requests from members of Congress that BP do exactly what it eventually agreed to. Sen. Amy Klobuchar was among those requesting the escrow fund be immediately established, while Reps. Keith Ellison and Tim Walz signed a letter asking for the dividend to be suspended.
Those requests had caused some consternation across the Atlantic, where BP dividend payouts reportedly comprise one sixth of British pension payouts. British leaders had encouraged the firm to continue plans to pay the dividend in an effort to keep money flowing to pensioners in that country, but those claims ultimately weren’t as persuasive as the endless American pressure.
Outside the West Wing, however, it was yet another case of two steps forward one step back for BP’s public relations effort.
BP’s chairman, Carl-Henric Svanberg tried to appropriate the old U.S. maxim that he’s standing up for the “little guy,” but instead gaffed by saying that BP cares about the “small people.“